Industrial Relations Commission of New South Wales in Court Session CITATION : H v First State Super FSS Trustee Corporation [2003] NSWIRComm 293 revised - 23/04/2012 APPELLANT H PARTIES : RESPONDENT First State Super FSS Trustee Corporation FILE NUMBER: IRC5864 of 2002 CORAM: Peterson J CATCHWORDS : Superannuation - Superannuation appeal - Whether employment ceased on ground of permanent incapacity or invalidity - No requirement that incapacity derived from work - Back injury at work exacerbating pre-existing depressive state - Medical and other direct evidence considered - Appeal upheld. Superannuation Administration Act 1996 LEGISLATION CITED : First State Superannuation Act 1992 Industrial Relations Act 1996 CASES CITED : Riley v The National Mutual Life Association of Australia Limited (1986) 4 ANZ Insurance Cases pars. 60-684 Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Insurance Cases pars. 61-175 HEARING DATES: 06/10/2003; 06/11/2003; 06/13/2003 DATE OF JUDGMENT: 09/16/2003 APPELLANT Mr J J Young of counsel SOLICITOR Higgins & Higgins LITHGOW. LEGAL REPRESENTATIVES: RESPONDENT Mr L J Ellison of counsel SOLICITOR SAS Trustee Corporation. JUDGMENT: - 26 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: PETERSON J DATE: 16 SEPTEMBER 2003 Matter No. IRC5864 of 2002 H v FIRST STATE SUPER FSS TRUSTEE CORPORATION Application by H to appeal against the decision of the First State Super FSS Trustee Corporation given on 28 May 2002. JUDGMENT 1 On 28 May 2002 the FSS Trustee Corporation as the trustee for First State Super ('FSS') indicated finally to the appellant, Ms H, that her claim, for the payment of an invalidity benefit in relation to her alleged permanent incapacity for any form of relevant employment, was refused. The appellant has appealed from that decision. 2 The decision from which the appeal is brought was one made pursuant to s22 of the Superannuation Administration Act 1996. By s40 of that Act a person aggrieved by a determination under s22 is granted the right to appeal against the determination to the Industrial Relations Commission in Court Session. Section 153(1)(h) of the Industrial Relations Act 1996 responds by limiting the function of dealing with proceedings on a superannuation appeal of that kind to the Commission in Court Session. 3 The First State Superannuation Act 1992 ('the Act') makes provision for superannuation benefits for employees of the Crown and other governmental or related employees. It is unnecessary to deal in this judgment with the details of the statutory scheme. It is accepted that Ms H is a person to whom the Act applied as a result of her employment, on a part-time basis of approximately ten hours per week, as an usher at the Sydney Opera House. The question for determination hinges upon the combined operation of ss37(1) and 38 of the Act in the light of the appellant's circumstances. Those sections are in the following terms: When is a death or invalidity benefit payable under this Act? 37(1) The basic death or invalidity benefit payable under this Act is payable to or in respect of a full member if the member dies or ceases to be employed and the Board is satisfied that the cessation of employment is on the ground of permanent incapacity or permanent invalidity (not caused by any act or default of the member intended to produce that incapacity). 37(2) . . . . 37(3) . . . . Retirement on the ground of permanent incapacity etc. 38. In order to be satisfied that the cessation of employment of a member is on the ground of permanent incapacity or permanent invalidity, the Board must be satisfied that the member is permanently unable, because of that incapacity, to be engaged, or to be employed, in any remunerative occupation in which, in the opinion of the Board, it would otherwise be reasonable to expect the member to engage. 4 "Board" is defined in the dictionary to the Act as the "State Authorities Superannuation Board". 5 Sections 40(3) and (4) of the Superannuation Administration Act provide as follows: 40 Appeals (3) In dealing with the appeal, the Commission may exercise any function that could have been exercised by FTC in making the determination the subject of the appeal. (4) In dealing with the appeal, the Commission is to have regard to this Act and any other relevant provisions regulating the superannuation scheme concerned and such other matters as it considers to be relevant. 6 In addition to the question whether the appellant is entitled to an invalidity benefit, a further issue concerns the level of benefit payable if, contrary to the decision appealed from, she is found to qualify for a benefit. The position of the respondent is that the cover applicable to her would provide a sum of $29,000.00; Ms H claims payment at the level of $63,750.00. This difference arises from a 1998 statement sent by the respondent to the appellant which identified her death or invalidity insurance cover as follows: Your cover at 30 June 1998 was $29,000.00. Your cover at 1 July 1998 is $63,750.00, subject to acceptance by the insurer. 7 The respondent's contention is that the cover at the higher level has never been accepted by the insurer in respect of Ms H, because no work was performed by her after December 1997. 8 The appellant was born on 4 April 1960. During her employment at the Opera House she had been struck in the back by a drinks tray carried by a waiter at a function at which she was working on 7 December 1997. 9 The appellant's academic history is of relevance. In 1994 she was awarded a Graduate Diploma in Visual Arts by the University of Sydney. Between 1997 and 1999 the appellant undertook, at the University of Sydney, a Graduate Diploma in Educational Studies and then a Bachelor of Teaching degree which culminated with qualification for the award of the degree in 1999, but the appellant elected to progress to achieve a Master of Teaching degree which was ultimately conferred on her on 26 October 2001. In the course of pursuing the teaching qualification the appellant undertook practical teaching. The respondent sought to rely upon this activity, which was undertaken over a period where the appellant was claiming invalidity, as going to her credit and the substance of her claim. 10 From 1989 to 1991 the appellant undertook a Bachelor of Arts in Visual and Performing Arts with the University of Western Sydney. She interrupted that course to undertake a Graduate Diploma in Visual Arts in 1992 and 1993. She was becoming hypersensitive to chemical exposure at the University of Western Sydney. However, in 1994 and 1995 she returned to that University to complete her degree which was awarded in 1996. 11 The appellant contended in her evidence that as a result of her chemical sensitivity she cannot work in an environment involving fumes, toxic materials and even deodorants and perfumes and the like result in migraine type headaches. While she is qualified to seek employment as a teacher of visual arts, she deposed that "I do not have the emotional capacity to manage a classroom or the self-confidence and ability to concentrate to be able to teach. In any event I cannot be exposed to the paints and solvents involved in visual arts". As in just about every respect in this case, there is a seeming conflict raised in the report given in relation to her practical teaching while undertaking the Master of Teaching Degree. 12 On 20 August 1998 she made application to the respondent for payment of a benefit identifying the employer who paid FSS contributions for her as the Sydney Opera House Trust and her date of cessation of employment as 7 December 1997. The basis of the application was identified as "I have retired on the grounds of total and permanent incapacity". 13 The application was supported by an incapacity certificate effected by Dr Andrew Hollo who certified on 21 August 1998 that the appellant had for about 10 months since November 1997 suffered from "a medical condition which, in my opinion, is likely to result in that person being unable ever to be employed in a capacity for which the person is reasonably qualified because of education, training or experience". That certificate was expressed to be not intended to be used for the purpose of assessing the appellant's entitlement to a particular class of benefit under the rules of the superannuation scheme but for the purposes of the eligibility of the person for the treatment of a superannuation benefit as an invalidity benefit for the purposes of the Income Tax Assessment Act or payment of a superannuation benefit that is otherwise subject to compulsory preservation in accordance with the standards prescribed under the Superannuation Industry (Supervision) Act (Cth). 14 On 26 August 1998 the appellant was informed that a second incapacity certificate was necessary to enable the payment of her superannuation guarantee charge. On 12 November 1998 Dr K J Lennane issued a further incapacity certificate of the type issued by Dr Hollo. 15 Subsequently, the payment of an invalidity benefit became the issue. On 7 May 1999 the respondent gave the appellant 28 days notice to show cause why her application should not be refused and to submit further medical information in support of her claim. At that time the respondent had a medical opinion of Dr Ian J Bryan, an orthopaedic surgeon who, after stating the history and features on examination expressed the following conclusion: This patient could have some pain but she has widespread complaint of pain over a long period of time for which there is really no adequate explanation on physical examination. There are no significant changes in the x-rays. I felt there were large emotional and psychological problems, which have persisted for some time, and I believe so complicate the issue of any physical disability that assessment of physical disability becomes almost impossible at this stage. I would not be able to comment on her fitness for work at the time she ceased employment but I can see reasons why she ceased employment and why she has remained off work since that time. The reasons I believe would only partially involve some physical disability but there is obviously evidence of other abnormalities that would keep her away from work now and has probably kept her away from work for some time in the past. I do not believe that any accurate diagnosis could be made as to a continuing physical disability but while her present symptoms persist I believe that her "incapacity" is likely to persist indefinitely. I believe that she requires further treatment but not on the basis of any major and continuing physical disability. As she presents she is not fit to continue with her former employment and I believe may be unfit to go back to that type of work in the future. As she presents I felt that she was not fit for any type of work and likely to remain unfit unless some further treatment is successful. I believe that she has been permanently unable to do the type of work that she was doing and I believe her inability to do this is the reason which has caused her retirement. The outlook I believe is uncertain and could not be assessed as being due to significant physical disability but there are other causes about which separate information would be required which could seriously interfere with her ability to return to work now and in the future. 16 On 7 May 1999 the appellant was issued an invitation to submit further medical information in support of her claim, the letter making reference to Dr Bryan's opinion in the following way: "In assessing your application the delegate noted that Dr Bryan, orthopaedic consultant, was of the opinion that while you had widespread complaint of pain over a long period of time he was unable to provide any adequate explanation on physical examination. Further he believed emotional and psychological problems made assessment of physical disability almost impossible at this stage. In view of Dr Bryan's advice, it is hard to see that the delegate would have a sufficient basis to be satisfied that your condition permanently precludes you from performing any remunerative occupation." 17 While that letter seems not to accurately reflect Dr Bryan's overall opinion, on 16 June 1999, the respondent wrote indicating that, as there had been no response to the letter of 7 May 1999, the application was unsuccessful. The appellant was advised she could dispute the decision under s22 of the Superannuation Administration Act 1996. 18 On 4 April 2001 Higgins & Higgins, solicitors of Lithgow, acting on behalf of the appellant wrote to FSS suggesting upon the basis of Dr Bryan's opinion; a further opinion of Dr Lennane dated 14 January 1999 and a number of other medical opinions to which I will come that the appellant was entitled to payment of her claim. Subsequently, further correspondence was entered into regarding the quantification of the claim but that will be referred to in the context of the secondary issue. 19 On 28 May 2002 the respondent finally advised that there was no ground to grant the application for an invalidity benefit. That advice relied on conflicting medical opinion and the observation that the appellant had been able to study and obtain degrees in Arts and Teaching since cessation of her employment with the Sydney Opera House. It adverted to the requirement that she had to "undertake periods of prac teaching on a full-time basis in the classroom". 20 The primary question before the Commission in Court Session is not concerned so much with whether the process and/or decision arrived at by the respondent was correct at the time but rather whether the appellant has been able in these proceedings to establish a relevant level of incapacity such as to qualify her for the payment of an invalidity benefit by the respondent. It is necessary, therefore, to take into account all of the evidence placed before the Commission in the present context, including the oral evidence given by the appellant. That material contains a relative wealth of medical opinion concerning the appellant's condition and level of incapacity and its degree of permanence. I now review the medical evidence. It is timely to reiterate that any incapacity is not required to be work related (or caused) - it must simply be such as to incapacitate for work "in any remunerative occupation in which . . . it would otherwise be reasonable to expect the member to engage" (s38). 21 On 14 January 1999 Dr Lennane had expressed the opinion that the appellant was "completely and permanently incapacitated for any kind of work". This was said to be the result of the severe impact of the back injury suffered at the Opera House which "could probably have been alleviated if she had been provided with appropriate rehabilitation at an early stage. However, this was not done, & the injury has progressed to a point where she is now completely and permanently incapacitated for that type of work." 22 That opinion was entirely, so far as I can tell, related to the physical condition relating to a back injury. On 17 March 2000 Dr Lennane expressed a further opinion which contained the observation that she had being seeing Ms H "on and off since 1992, mainly for counselling regarding personal and relationship problems and also at times for treatment of a depressive illness. I did not ever take a specific history regarding her back injury, since it is not in my field of expertise, but have noted it as a problem since late November 1997, becoming worse throughout 1998." 23 Dr Lennane, a well-known psychiatrist, then noted that the depression from which the appellant had been suffering had become constant subsequent to the suffering of the back injury and: ". . . in my opinion her back injury was a significant contributing factor to her depression from that time. Prior to late 1997 her depression, when present, had not incapacitated her for work; after late 1997, it did. Ms H's fitness for work depends on her back. Pain and incapacity from her back injury have caused her increased depression and if the latter could be fixed, then the former would resolve. If she remains incapacitated physically and in continuing pain, then she is likely to remain depressed, at least for the next 5-10 years, after which she might attain some degree of psychological adjustment to her continuing disability." 24 On 21 February 2002 Dr Mary Tapsall of Wodonga certified the appellant was suffering from "multiple medical conditions. She will be unable to teach long-term or foreseeable future." On 26 April 2002 Dr Tapsall provided to solicitors for the appellant the following opinion: It is my opinion that Ms H is permanently unable because of her incapacity to be engaged or to be employed in any remunerative occupation in which it would otherwise be reasonable to expect her to engage. I consider her to be totally and permanently disabled from engaging in employment for which she is reasonably fit by reason of her age, experience and qualifications. 25 On 16 October 2002 Dr Tapsall again provided an opinion to Higgins & Higgins. It contained the following: I believe the back injury significantly aggravated her depression and that she is totally and permanently disabled due to the back injury and its consequent aggravation of her depression. Ms H is highly intelligent, and it is to her great credit that she was able to complete a Bachelor of Arts and Masters in Teaching degrees since her back injury. Studying allowed her to work at her own pace and her intelligence enabled her to 'catch up' on missed course work due to illness. Although I have only cared for Ms H since toward the end of her studies, I can state that many certificates were required for me to support the special considerations required due to her conditions. Intelligence and persistence alone are not enough to be able to remain well enough to work on a regular basis. Her back pain and depression are constantly present and she suffers from unpredictable but severe and sometimes prolonged, exacerbations of both conditions, frequently and for extended periods. . . . She simply is not well enough for enough hours in the week to manage this kind of output. 26 On 5 March 2002 Dr Ian S Collins provided a lengthy medical report which expressed the opinion that there was "very little evidence of orthopaedic problems at present. I feel that most of the patient's problems are due to depression and that this has led to increased somatic symptoms, over breathing attacks, and various anxieties associated with physical factors. I feel that she has had musculo ligamentous strain in the back and also in the feet, associated with her occupation, but that this has settled down". The report also stated: As conditions are at present, the patient's overwhelming problem is depression. The depression was pre-existing, but I believe that it has been significantly aggravated by various personal events and also by the physical injuries which she sustained when she was working as an usher at the Sydney Opera House Theatre Trust. I would assess two thirds of her psychological disability as being due to a pre-existing condition and non work factors and one third due to psychological trauma which she experienced while working for her employers. STABILISATION OF CONDITION: The patient's condition in my opinion has stabilised. The back condition does not appear to be causing much trouble at the present time. She has a great deal of pain which I think at the moment is psychologically based. I believe that she is chronically disabled from the psychological point of view. FITNESS FOR WORK: In my opinion she is not fit for any form of work at the present time. 27 On 26 March 2002 in response to a further letter from Higgins & Higgins, Dr Collins stated: "It is my opinion that this lady is permanently unable because of her incapacity to be engaged or to be employed in any remunerative occupation in which it would otherwise be reasonable to expect her to engage. I consider her to be totally and permanently disabled from engaging in employment for which she is reasonably fit by reason of her age, experience and qualifications." 28 On 3 September 2002 Dr Lennane responded to a further enquiry from Higgins & Higgins concerning the appellant's medical history, particularly in relation to chemical sensitivity. That response records that issue as having arisen since the appellant's exposure to chemical during her Fine Arts course at Nepean in 1989, with recurring references to that problem periodically; Dr Lennane then stated: "As the chemical sensitivity, like her back problem and RSI are outside my area of expertise, it is not a major issue in my notes. However, it is another addition to her long list of problems: depression, eating disorder, chronic fatigue syndrome, unresolved grief, and possible psychosis in her late teens. She remains, in my opinion, totally and permanently incapacitated for work." 29 On 20 December 2001 Dr Susette Sowden, a psychologist and the Director of Psychology with Nexus Consulting Services Pty Ltd, provided a psychological report in relation to the appellant. Dr Sowden's clinical findings upon examination were as follows: Diagnosis Ms H appears to be suffering from a Somatoform Disorder, namely, Pain Disorder Associated With Both Psychological Factors and a General Medical Condition. Her Pain Disorder is both chronic and very severe. The Pain Disorder and severe depression appears to have resulted in a degree of personality disintegration. The criteria for Pain Disorder include: A. Pain in one or more anatomical sites is the predominant focus of the clinical presentation and is of sufficient severity to warrant clinical attention. B. The pain causes clinically significant distress or impairment in social, occupational, or other important areas of functioning. C. Psychological factors are judged to have an important role in the onset, severity, exacerbation, or maintenance of the pain. D. The symptom or deficit is not intentionally produced or feigned. E. The pain is not better accounted for by a Mood, Anxiety, or Psychotic Disorder and does not meet criteria for Dyspareunia. Ms H is suffering severe depression which is significantly maintaining her experience of pain. She is also suffering elevated anxiety manifesting in paranoid thoughts and a strong sense of helplessness. The pain she experiences however is serving to cause her depression which she has found very difficult to treat. Her major depression is characterised by the following symptoms: depressed mood most of the day; markedly diminished interest or pleasure in all, or almost all, activities most of the day; insomnia; psychomotor retardation nearly every day; fatigue or loss of energy nearly every day; feelings of worthlessness and helplessness; diminished ability to think or concentrate; and recurrent thoughts of death. Her Pain Disorder and depression have also caused a degree of personality disintegration including feeling she is losing her mind, experiencing bizarre sensory experiences and defective inhibition, and having lack of ego mastery, both cognitive and conative. ………. Ms H's loss of capacity for work is directly related to her Pain Disorder and her severe depression which have been significantly caused by her physical injuries sustained while employed as an usher with the Sydney (Opera - sic) House Theatre Trust. While Ms H appeared to suffer adverse psychological symptoms during her childhood, these symptoms appear to have made her more vulnerable to the development of her current condition which has arisen as a result of her physical injuries. In relation to the extent of incapacity, it is my opinion that Ms H suffers from total permanent impairment. Her current total permanent impairment, as noted above, has arisen from her physical injuries she sustained as a result of her employment as an usher. 30 On 28 February 2003 Dr Sowden wrote in response to Higgins & Higgins the following: Regrettably I have no doubt in my own mind that Ms H has no prospect of being employed ever again. I understand that Dr Christie for the insurer states "Dr Sowden, a psychologist, who is aware has a different diagnosis of Somatoform Disorder with Severe Depression. According to Dr Swift and Dr Sowden the Masters Degree required teaching experience which apparently Ms H has undertaken over that period. The major problem is agreed to be psychiatric…Dr Sowden's psychologist's report is inconsistent with the psychiatric reports on file." There is no doubt in my mind that Ms H is suffering from a major psychiatric decompensation and is totally incapacitated from a psychological viewpoint. Her physical disabilities are a matter for others more qualified to comment. I am aware she attempted some practical experience in an attempt to obtain her Masters Degree, but I understood she had difficulties in obtaining certification for such practical experience. I understood this to be the case because her performance was unsatisfactory. At the time we were supporting her in her attempts to complete course requirements. 31 On 1 May 2000 Dr Peter R Burgess, Orthopaedic Surgeon, supplied a medical report to the appellant's solicitors which expressed the following opinion and prognosis: "The persistent stresses of her job at the Opera House by her description, seem to have gradually brought on the syndrome of low lumbar back pain which appears to be due to lumbar disc injury, particularly at L4/5. Her current condition is one of intolerance of specific back stresses and she treats her problem by carefully avoiding these stresses and undertaking a routine of belly and back muscle exercises and a fitness programme generally. She would benefit I feel from counselling and involvement in an organised rehabilitation programme which should include retraining for a more appropriate job. Given time and this routine, her back condition should settle to a satisfactory degree but she will remain susceptible to further back injury and the likelihood of her problem progressing to more pronounced lumbar spondylosis with more intrusive lumbar spondylitis and symptoms of nerve root compression and she may even at some time require surgery for nerve root decompression. I feel that her problem represents a 20% permanent impairment of her back and a 10% permanent loss of efficient use of both her legs at or above the knees due to the symptoms which she describes. For the lack of any other cause and given her history and the veracity of her complaint, I feel that her problem is due to her work stresses without other significant contributions. She has consequently undergone a complete change in her comfort and lifestyle and faces some worrisome prospects for her future." 32 On 3 April 2000 Dr Julian Parmegiani, a General and Forensic Psychiatrist, provided a medico-legal report to Higgins & Higgins which contained the following summary and opinion: Summary and Opinion Ms H is a 39 year old woman who presented with an Adjustment Disorder with Mixed Anxiety and Depressed Mood. I have enclosed the criteria required for this diagnosis, in accordance with the Diagnosed and Statistical Manual of Mental Disorders, published by the American Psychiatric Association (IV Edition). Ms H's psychiatric symptoms were precipitated by chronic and debilitating back pain. She made a significant emotional investment in her career, which came to a halt in 1997. Ms H looked after her terminally ill mother until September 1999, and it is likely that during this period she did not have an opportunity to focus on herself. Over the past three months Ms H's anxiety and depression increased in severity, due to a combination of symptoms. Ms H felt lonely, isolated and no longer in control of her life. She was single, on a disability support pension and in chronic pain. The duration of her physical symptoms suggested they were chronic in nature, and Ms H found it difficult to adjust. It is likely that her increased anxiety exacerbated her physical symptoms. She could benefit from psychiatric treatment, and another trial of antidepressants. Allowance should be made for 8 to 12 sessions with a psychiatrist, at a cost of $150 - $210 (AMA fee) per session. Ms H's psychiatric symptoms are mostly due to her work related injuries. The loss of her relationship and her mother's death exacerbated her anxiety, but the effect of these two events is unlikely to extend over six to twelve months. Chronic pain on the other hand will continue to act as a stress. 33 A number of other medical reports were obtained at the behest of the respondent. On 30 May 2001 Dr Gordon Slater, a consultant orthopaedic surgeon, provided a medico-legal assessment of the appellant at the request of the respondent. The particular answers provided by Dr Slater in relation to the questions asked of him were as follows: Q1 Your diagnosis: A Discogenic lumbar spine pain however there is a strong functional overlay. Q2 Is the incapacity likely to be permanent? A This lady's symptoms not consistent with the diagnosis. She has a far greater pain expression than one would expect with this type of injury. Q3 If the answer to question 2 is Yes: (i) Was this incapacity directly or indirectly the cause of her cessation of employment in 1997? A This incapacity is unrelated to employment in 1997. I would not see that injury that she described or prolonged sitting as being the cause of chronic discogenic lower back pain. Q3(ii) Would the incapacity prevent her from resuming her former duties as an usher? A The incapacity should not prevent her from resuming her former duties as an usher. In fact they are the sort of duties that would be recommended that she continue in, in order to prevent any further problems with the lower back. Q4. If you consider it is relevant in the light of your earlier responses and considering the nature and the extent of the incapacity at the time she ceased employment: (i) what other kinds of work do you consider she then could reasonably have been expected to have undertaken, if any? A She would be suitably for her pre-injury duties. She should avoid any activities which are heavy in nature, involve repetitive twisting or working in confined spaces. Q4(ii) if she was unable to undertake other reasonable employment, is this likely to be permanently the case? (Without limiting the meaning of "reasonable" in the circumstances of this case, the FTC has considered reasonable work to include work for which the person is reasonably qualified by education, training or experience.) A Not relevant. This lady is suitable for reasonable work with her qualifications as an usher or hostessing type work. With discogenic lower back pain I would recommend that she does not engage in heavy activities or one which involve repetitive bending or working in confined spaces. 34 On 10 June 1999 Dr James G Bodel, orthopaedic surgeon, expressed this opinion in his assessment of the appellant. Opinion This patient has had a long history of intermittent mechanical backache which dates back to about 1991. On the balance of probabilities her work has caused a minor disc injury at L4/5. I suspect that this occurred in the early 1990s and that the event on 7.12.1997 merely temporarily aggravated what already existed. The reason for this assumption is that there was well established degenerative change in the facet joints in the x rays films that I have seen and it appears that this has been of long standing. The patient has no objective sign of nerve root involvement in the lower limbs and therefore surgery is not required. Further understanding of the patient's pathology would be gained from an MRI scan and the patient may need to have some sedation to have this done because of her claustrophobia. The findings on that MRI scan however are unlikely to alter medical management. The mainstay of treatment is exercise to strengthen the low back and abdominal muscles in orders to optimise long term outcome. The patient should be able to tolerate light to moderate manual tasks. She should be allowed to change position frequently from standing or sitting or walking in order to optimise her ability to work. Long term the patient has a reasonable prognosis with continued conservative care. 35 On 23 February 1998 Dr I Smith, Assistant Medical Director of Medical Services with GIO Australia expressed this "impression" of the appellant and, perhaps more particularly, the liability of the GIO: Impression The GIO has no liability for the claimant's chronic lower back problems which appear to be due to constitutionally determined degeneration. Sitting on stairs and inadequately cushioned seats is not a cause of disc problems or degeneration. She did have a temporary increase in symptoms in her lower back and some temporary left leg symptoms after she returned to work, but nominally this settled within a very short period of time, nominally 2 weeks. At the present time the claimants problems reflect her pre-existing degenerative disc disease and have absolutely nothing to do with the GIO. The claim should be declined as not being medically consistent. 36 On 1 May 2002 Dr Jeffrey D Swift, consultant psychiatrist, expressed his opinion of the appellant's situation and, in particular, answered the specific questions (being the same questions as those put to Dr Slater) as follows: 1. Your diagnosis. The diagnosis is that of Major Depressive Disorder, Recurrent (melancholic, of mild to moderate severity, incomplete resolution) (DSM IV, 296.3). 2. Is the incapacity likely to be permanent? Ms H's depression is likely to fluctuate in severity, but it seems likely that there will be incomplete resolution. In that sense, her incapacity is likely to be permanent. 3. If the answer to Question 2 is "Yes": (i) was this incapacity directly or indirectly the cause of her cessation of employment in 1997? Her depression contributed to her cessation of employment, but her chronic low back pain was also strongly contributory, on a 50%/50% basis. (ii) would the incapacity prevent her from resuming her former duties as an usher? The incapacity prevents Ms H from resuming her former duties as an usher. 4. If you consider it is relevant in the light of your earlier responses and considering the nature and extent of the incapacity at the time she ceased employment: (i) what other kinds of work do you consider she then could reasonably have been expected to have undertaken, if any? Unfortunately, Ms H's other work experience is principally in the area of data entry and she suffers from intermittent RSI. It would be, therefore, undesirable for her to undertake this form of employment. She has experience in graphics and visual arts and may be able to undertake some home-based work in the graphics or visual arts field. It would be desirable, in the interests of her health and finances, for her to be able to work part-time. (ii) If she was unable to undertake other reasonable employment, is this likely to be permanently the case? As previously stated, I consider there to be some scope for employability and it may actually be therapeutic for Ms H to undertake some form of part-time work or re-training towards part-time work. 37 It is notable that Dr Swift's assessment makes no reference to the contemporaneous undertaking of the Master of Teaching degree course. On 27 May 2002 in response to an enquiry from the senior policy officer of the respondent, Dr Swift advised: In response to my questions, Ms H did not volunteer that she was or is doing a Master of Education on either a part-time or full-time basis. 38 On 1 June 1998 Dr Jeremy D P Hopkins, consultant orthopaedic surgeon, expressed these opinions: "I consider this woman is perfectly fit to continue on in her previous occupation as an usher." "In my opinion, she is capable of undertaking her normal duties currently." "I do not consider that she has any permanent impairment of function which is work-related." "However, as far as I can ascertain I cannot see any reason why her employment would be the cause of this situation. However, this may well be an indication for psychological assessment to determine any relationship between her work practice and her claimed depression. Overall, I do not consider she has sustained any injury to her back or her feet in association with her employment and her conditions in those areas are due to pre-existing degenerative disease in the lumbar spine and adolescent bunions in the feet." 39 On 27 April 2001 Dr Anthony Christie, an occupational physician and medico-legal consultant, provided his opinion based solely upon the medical opinions otherwise provided in relation to the appellant and without undertaking any personal assessment of the appellant. I admitted those opinions into evidence on the basis that they had been placed before the Disputes Committee. However, upon consideration of them, it seems to me to be more appropriate that the opinions to which Dr Christie was referred and which I have summarised above, ought be assessed by the court independently of, and without reference to, his secondary opinion. 40 As I have said, the appellant gave oral evidence. It is necessary to say that her conduct was, in some respects, quite bizarre. On a lower level, she did not present in court while her case was opened or argued. She attended the courtroom solely for the purpose of giving her evidence. During the course of her evidence however she exhibited what I would describe as irrational behaviour. She did not merely give the indications one expects of a person reluctant to be in a courtroom. She was argumentative in the extreme and repeatedly resisted giving answers in cross-examination. She, after stating "I find the system sucks", went so far as to express the desire "to be a terrorist (the transcript incorrectly records 'barrister') and pull a bomb out of my handbag". She was aggressive towards counsel for the respondent during the course of her cross-examination. She showed short temper and periodically claimed a need to stand rather than sit although when under pressure I noticed that tendency receded. Although, I found it necessary to consider whether the appellant was merely performing a role or rather exhibiting unavoidably the features of the psycho-medical condition to which much of the evidence referred. I came to the view that her conduct was not an act but gave a reasonably true indication of a form of instability which is relevant to her ability to undertake employment for which she is qualified or suited. 41 Another aspect of her evidence is particularly relevant. Mr Ellison, of counsel, for the respondent, in the course of cross-examination and with the obvious intention of preparing the ground for the presentation of a videotape, asked the witness what was the most active physical thing she had done in the last seven days; the appellant's answer was "Had sex". That answer was of interest in a context where the videotape was then exhibited to the appellant and was accepted by her as depicting her activities on the previous Friday when she spent quite some time carrying furniture from the house in which she was then residing to her car, loading the car and then later returning some of the furniture to the house. While the appellant's response to counsel would tend to suggest the exertion involved in loading the car was de minimus, I accept from the video that she was undertaking an activity requiring a reasonable level of exertion and did so without any apparent physical difficulty. 42 Another troubling aspect of the appellant's evidence concerns her undertaking of a two-year post graduate degree in teaching during the period when her medical opinions were repeatedly expressing the opinion that she was unfit for any work. That teacher training involved not only the undertaking of academic work and examinations, with the associated burden, but also practical teaching in a classroom context where she was able to achieve, on her supervising teacher's statement, a satisfactory, indeed commendable, level of performance. While she tried to minimise the significance of this opinion in her oral evidence, it seems to me to be impossible to accept that she did other than perform satisfactorily in that context. I recognise that Dr Tapsall adverts in her opinions that it was necessary to render medical support to the appellant while she was undertaking the practical teaching component. 43 These features in the evidence raise a serious question about the veracity of the proposition that the appellant is incapable of undertaking any work for which she is qualified. It is to be remembered that the relevant test for an entitlement to be paid an incapacity payment is a cessation of employment on the ground of an incapacity for work arising from any reason, not only an incapacity resulting from a work injury. That question is to be determined on the balance of probabilities. 44 In addressing me in that context Mr Young of counsel for the appellant submitted that one approach might be that I should consider whether or not I would be prepared to employ the appellant given her history and, perhaps, her behaviour. That is not a relevant question. Her capacity to work cannot be determined by my preferences or inclinations but rather by my assessment of her capacity on a wider and more general basis. 45 The primary indicators in that respect are the medical opinions. It is necessary to observe that no doctor was called to be cross-examined upon any opinion. Accordingly, they must be accepted at face value but in the light of such other evidence as might bear upon them. For example, I have already set out the summary and opinion of Dr Parmegiani (see par [32]) which records that the appellant looked after her terminally ill mother until September 1999. In fact, the appellant's mother died in September 1998 but little turns on the incorrect date. In recording the appellant's history, Dr Parmegiani included the following paragraph: Ms H's psychiatric symptoms are mostly due to her work related injuries. The loss of her relationship and her mother's death exacerbated her anxiety, but the effect of these two events is unlikely to extend over six to twelve months. Chronic pain on the other hand will continue to act as a stress. 46 In cross-examination, the appellant's evidence was very different. The transcript records (at p.47) the following: ELLISON Q: I don't want to unnecessarily delve into the circumstance surrounding the illness and death of your mother, but was it a matter which, during 1998, caused you to visit your mother a lot more than you had in previous years? A. No. Q. You said she was in a home of some sort before she died? A. At a certain period, yes, that's right. Q. Well, was she in a home in the year 1998 before she died? A. She lived in a retirement complex as I mentioned earlier and that as her disease progressed she then went to a palliative care unit. Q. How often would you visit her in 1998 before she died? A. In the palliative care unit, or in the retirement unit? Q. First of all, in the retirement unit? A I would go and visit her on the weekends when possible. Q. Would that mean one weekend every month, or three weekends? A. It would depend because I didn't have transport and I had problems getting around with buses and trains. Q. Would there be some months in 1998 when you saw her three times in a month? A. Possibly. Q. And there were other months when you saw her less? A. Possibly. Q. When she moved into palliative care, how often would you visit her? A. How often did I visit her? I didn't see her for several months when she went to Wahroonga Palliative Care. I didn't see her for a major part of the time in that hospital. Q. Wahroonga being Wahroonga in Sydney? A. That's correct. I had trouble getting there by bus, so I didn't see her for quite a substantial period of her hospitalisation there. 47 Despite having held serious reservations about the matter, I have been persuaded by the firm medical opinions, particularly of Dr Tapsall and Dr Lennane (see also Dr Collins and Dr Swift) that the appellant is incapacitated in a real sense from undertaking any employment for which she is qualified. I have given serious consideration, in the light of her having undertaken academic and practical training in teaching whether the position she presently adopts is manufactured for the purpose of obtaining the benefit of an incapacity payment. Not only the fact of the training but what appears to me to have been a suppression of that fact from the medical officers examining her at the behest of the respondent are relevant to that question. Despite these concerns, I have come to the view that the appellant's unfitness is able to be discerned from both the medical evidence and her evidence and demeanour. 48 I have concluded that the appellant's behaviour in the course of her evidence is illustrative of a person who is severely troubled and, while she remains in that state, has little prospect of employment and is unable to be employed in any occupation in which it would otherwise be reasonable to expect her to engage. That condition I find derives from the aggravation of her depression by the work injury suffered to her back. Section 38 requires that inability to be permanent. Some of the medical opinion claims her condition is permanent and, in my view, there is no proper basis for concluding that the position is otherwise. 49 I was referred to the judgment of Cosgrove J in Riley v The National Mutual Life Association of Australasia Limited & Anor (1986) 4 ANZ Insurance Cases ¶60-684. In that matter the plaintiff was employed as a station officer grade 2 by the state fire brigade. He suffered a myocardial infarction in the anterior region of his heart on 18 October 1981 and had not returned to work at the date of judgment, 4 November 1985. He claimed a benefit, relying on the definition of "totally and permanently disabled", which was defined as being "incapacitated to such an extent as to render the member unlikely ever to engage in or work for reward in any occupational work for which he is reasonably qualified by education, training or experience . . .". 50 The insurer rejected the plaintiff's claim in circumstances where the medical opinions advanced expressed a total and permanent incapacity to be employed in any active physical work. Cosgrove J held that it had not been demonstrated the opinion formed by the insurer was an unreasonable one. He held that the plaintiff had not made out a claim for payment of the benefit. His Honour said: "The evidence made available to me does not compel the conclusion that his incapacity is such that it is unlikely that he will ever again engage in or work for reward in any occupational work, etc. " 51 I consider that case is distinguishable on the basis of the different definition involved. Here the matter is more akin to that in Chammas v Harwood Nominees Pty Ltd (1993) 7 ANZ Insurance Cases ¶61-175 (see par. [56]) where the element of incapacity for further employment was held to carry with it a requirement that the incapacity be permanent or substantially permanent. 52 In Workers' Compensation Law and Practice in New South Wales (Marks and McLean) CCH Limited at ¶1705 the learned authors suggest that the concept of permanent incapacity involves a condition which is "static or so stabilised it is unlikely to conclude". Dr Sowden's opinion was that the appellant's condition has stabilised and in the absence of one to two years therapy was at risk of degeneration. While I consider the appellant may possibly improve in the future, there is on the material before me no real indication that such an improvement is likely. I therefore find that the appellant qualifies for an invalidity payment under the provisions of ss37 and 38 of the Act. 53 It becomes necessary to determine the level of payment to which the appellant is entitled. There is no basis for concluding that the entitlement is other than to a sum of $29,000.00. While the appellant contended that she received the 1998's statement from FSS which identified her cover at 1 July 1998 as $63,750.00, in 1997 at around the time she remained employed at the Opera House, I find that cannot have been so. The document identifies itself twice as relating to the position as at 30 June 1998, as one would expect the 1998 Statement of a Benefit Account to do. In the Account Summary it shows an opening balance in a money amount applicable as at 1 July 1997 and a closing balance as at June 1998 - "the vested benefit". It is impossible to accept that this was identified at some time in 1997. 54 The respondent wrote to the legal representatives of the appellant on 4 November 2002 explaining its position with respect to the level of cover applicable to the appellant. That letter included the following: Members of FSS who commenced employment before 1 July 1998 were covered for invalidity under a self-insurance arrangement. On 1 July 1998 FTC entered into a group insurance policy with Colonial Mutual for provision of invalidity and death benefits. The cover provided under that policy applied to existing members only if they were actively at work on or after 1 July 1998. In September 1998 scheme booklets entitled 'Your Member Guide' were issued to all FSS members together with their member statements. Enclosed is a copy of the covering letter dated September 1998 to members. Also enclosed is a copy of the cover and pages 10 and 11 of 'Your Member Guide'. The table on page 10 sets out the cover under the self-insurance arrangement and the cover offered by Colonial. According to the table on page 10 of 'Your Member Guide', at age 39 (your client's age at the date her employment was terminated) the amount of self-insured cover was $26,000. Page 11 sets out the conditions under which pre 1 July 1998 members were entitled to the cover offered under the Colonial policy, including the requirement of being actively at work after 30 June 1998. Although it did not become clear until later to the administrator of FTC, Pillar Administration, that your client's circumstances did not satisfy this requirement of active employment after 30 June 1998, it would have been evident to your client from the information in the 'Your Member Guide' that she did not qualify for the Colonial cover. 55 Mr Young submitted that the final paragraph demonstrates that the trustee were unable to enlighten the appellant about her true rights when he was under a duty of good faith to do so. It is unconscionable and in breach of that duty for the appellant now to be told, when the point was never taken before, that the appellant should be bringing an application against Colonial Mutual. 56 Mr Young cited the judgment of Hodgson J in Chammas. There a primary issue was whether the trustees of a retirement fund had made proper enquiry and given consideration to the appropriate question in relation to a claim by the plaintiff for a disablement benefit under the fund. The court found for the plaintiff and in respect of the insurer's failure to act fairly and reasonably in forming its opinion, the court proceeded to consider for itself the question of whether the plaintiff was incapacitated for further employment. Hodgson J observed: However, I do think that employment must be given a reasonable construction; and I think employment should be limited to full-time employment, and to employment which is reasonably open to the member. That is, I think, the employment must be employment which the member is capable of undertaking, having regard to his education, experience and training, or at least employment which he could become capable of undertaking with further training which it would be reasonable for him to undertake. The requirement that the incapacity be for further employment, carries with it, I think the requirement that the incapacity be permanent or substantially permanent. Mere temporary incapacity would clearly be insufficient. Although, contrary to what I said in my oral reasons, the reference is to incapacity "for" further employment, not "from" employment, I think the actual availability of employment and the question of the likelihood of obtaining employment is relevant. Turning to the question as stated on the back of the claim, I do not think that is, in any material respect, different from the question arising from the words as I have interpreted them. The test stated there is that the member should be rendered unlikely ever to engage or work for reward in any occupation or work for which he is reasonably qualified by education, training or experience; and I think those words sufficiently indicate that the relevant employment is full-time employment, and that the question is not merely incapacity to engage in some theoretical employment, but actual likelihood of obtaining employment. And the reference to reasonable qualification, I think, appropriately encompasses the requirement that the employment should be something that the member is capable of undertaking. 57 In the present matter the language in ss37 and 38 is different and does not suggest to me that the concept of full-time employment is necessarily applicable. Section 38 refers to "any remunerative occupation in which … it would otherwise be reasonable to expect the member to engage". Where the member, in this case the appellant, was a 10 hours per week part-time employee, I can see no reason why the remunerative occupation to which s37 refers would not encompass the possibility of employment of that type. 58 The appellant has been unable to demonstrate any error in the position adopted by the respondent, that cover at 1 July 1998 has not been accepted by the insurer. I conclude in that respect that the appellant was not the subject of either work or any relevant payments so as to cause that acceptance on or after July 1998. It must follow then that the cover applicable is that identified at 30 June 1998 as $29,000.00. There is no basis for ordering the payment of any other sum. 59 The notice of appeal seeks an order in the following terms: The appellant is totally and permanently incapacitated pursuant to s38(1) of the First State Superannuation Act 1992. 60 Whilst counsel did not address the particular form of any order, I would be willing to make an order in those terms or in such terms, consistent with the application, as reflect my conclusions. The appellant is directed to file and serve within 21 days the draft form of order it seeks to give effect to its success in the appeal. I grant liberty to apply. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.