Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Pacific National Pty Ltd v Baldacchino [2018] NSWCA 281 Hearing dates: 31 October 2018 Decision date: 23 November 2018 Before: Macfarlan JA at [1]; Payne JA at [44]; Simpson AJA at [45] Decision: Appeal and application for leave to appeal dismissed with costs. Catchwords: WORKERS COMPENSATION – appeal against decision of Workers Compensation Commission – whether Deputy President of WCC erred in finding that a total knee replacement is an "artificial aid" within the meaning of s 59A(6)(a) of Workers Compensation Act 1987 (NSW) – Thomas v Ferguson Transformers Pty Ltd [1979] 1 NSWLR 216 discussed – appeal dismissed WORDS AND PHRASES – "artificial aid" – Workers Compensation Act 1987 (NSW), s 59A(6)(a) Legislation Cited: Supreme Court Act 1970 (NSW), s 75A Workers Compensation Act 1926 (NSW), s 10 Workers Compensation Act 1987 (NSW), ss 59, 59A Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 353 Cases Cited: ADCO Constructions Pty Ltd v Goudappel (2014) 254 CLR 1; [2014] HCA 18 Akins v National Australia Bank (1994) 34 NSWLR 155 Ex parte Campbell, In Re Cathcart [1870] LR 5 Ch App 703 Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47; [1956] HCA 21 Public Service Association and Professional Officers Association Amalgamated Union (NSW) v Industrial Relations Secretary [2015] NSWCA 386 Thomas v Ferguson Transformers Pty Ltd [1979] 1 NSWLR 216 Vetter v Lake Macquarie City Council (2001) 202 CLR 439; [2001] HCA 12 Category: Principal judgment Parties: Pacific National Pty Ltd (Appellant) Saviour (Sam) Baldacchino (First Respondent) State Insurance Regulatory Authority (Second Respondent) Representation: Counsel: L King SC / S Flett (Appellant) P Morris SC / C Tanner (First Respondent) Submitting Appearance (Second Respondent) Solicitors: Hall & Wilcox (Appellant) Carroll & O'Dea (First Respondent) Crown Solicitor's Office (Second Respondent) File Number(s): CA 2018/122484 Decision under appeal Court or tribunal: Workers Compensation Commission Citation: [2018] NSWWCCPD 12 Date of Decision: 28 March 2018 Before: Deputy President Michael Snell File Number(s): WCC A1-2148/17 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment] The Workers Compensation Commission held that a total knee replacement that the respondent reasonably needed as a result of a workplace injury was not subject to the time limits on compensation provided for in s 59A(1) and (2) of the Workers Compensation Act 1987 (NSW) as it involved the provision of an "artificial aid" within the meaning of s 59A(6)(a) of that Act ([2018] NSWWCCPD 12). The appellant, Pacific National Pty Ltd, appealed from that decision. Its principal argument on appeal was that "on no proper interpretation of an expression like 'artificial aid' could two or three pieces of plastic surgically inserted in a knee to replace lengths of human bone that were excised [that is, a total knee replacement] come within" s 59A(6)(a) of the Workers Compensation Act. In oral submissions, the appellant contended that an "artificial aid" was "an article or object, complete in itself, which serves a purpose". In contrast, a total knee replacement was said to involve "interference with part of a human body and the insertion of objects which come together as part of an overall [or unified] operation". The appellant also submitted that the Deputy President of the Workers Compensation Commission found against the appellant because he followed Thomas v Ferguson Transformers Pty Ltd [1979] 1 NSWLR 216 when, in the appellant's submission, that case had been rendered of no assistance by subsequent changes in the relevant law. The appellant's fallback argument on appeal was that, if compensation was payable to the respondent in respect of the cost of the materials to be used in the knee replacement operation, the cost of the surgery was nevertheless not covered. The Court held, dismissing the appeal with costs Macfarlan JA, Payne JA and Simpson AJA agreeing (1) The primary decision maker did not err in finding that the respondent's total knee replacement was an "artificial aid" within the meaning of s 59A(6)(a) of the Workers Compensation Act: [27]-[31], [37]-[41], [44], [45]. (2) Deputy President Snell of the Workers Compensation Commission did not err in having regard to Thomas: first, the Deputy President did not rely solely on Thomas, rather he stated that Thomas was in his view consistent with the words of the statute; secondly, Thomas remains a relevant authority, notwithstanding that the present legislation is, to some extent, in a different form to that considered in that case; and, thirdly, even if, as the appellant contended, Thomas does not support the decision below, it is clear that it does not contradict it: [32]-[36], [44], [45]. Thomas v Ferguson Transformers Pty Ltd [1979] 1 NSWLR 216 discussed. (3) The appellant's fallback argument was rejected. The "provision of" the artificial aid in the form of a total knee replacement requires surgery. That surgery is therefore within s 59A(6)(a). This Court stated that it was not to be regarded as adopting a general rule that the cost of surgery is always a cost of "[t]he provision of … artificial aids", rather each case must be decided on its own facts: [42], [44], [45]. Judgment 1. MACFARLAN JA: This is an application for leave to appeal against a decision of Deputy President Snell of the Workers Compensation Commission holding that a total knee replacement is an "artificial aid" within the meaning of s 59A(6)(a) of the Workers Compensation Act 1987 (NSW) ([2018] NSWWCCPD 12). The effect of the decision is that a total left knee replacement that the respondent reasonably needs as a result of a workplace injury is not subject to the time limits on compensation provided for in s 59A(1) and (2). 2. Subject to the specification in s 353(4) of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) of a requirement for leave to appeal in respect of appeals from certain types of decisions, s 353 confers a right of appeal to this Court upon a party aggrieved by a decision of a Presidential member of the Workers Compensation Commission "in point of law". Subsection (4) is inapplicable in the present case, in particular because the parties accepted below that the cost of the knee replacement, and therefore the amount in issue on the appeal, exceeds $20,000. That less than $20,000 is in issue on the appellant's fallback argument (namely, that only the items to be inserted in the knee, and not the cost of the operation, fall within the expression "artificial aids") does not deprive the appellant of its right of appeal on its principal case. A grant of leave to appeal would only be necessary if that case failed and the Court saw merit in the fallback argument. 3. The parties agreed before the first instance arbitrator, Mr J Harris, and before the Deputy President that a total knee replacement: "replaces the ends of the femur (thighbone) and tibia (shinbone) with plastic inserted between them and usually the patella (kneecap)" (Deputy President's Judgment [14]). 1. The parties adhered to this agreement in this Court but the respondent applied for leave to supplement the agreement with expert evidence. For reasons that appear below, that application should be rejected. 2. Since 2015, and therefore at the time material to the present case, s 59A of the 1987 Act has relevantly been in the following terms: "59A Limit on payment of compensation (1) Compensation is not payable to an injured worker under this Division in respect of any treatment, service or assistance given or provided after the expiry of the compensation period in respect of the injured worker. (2) The compensation period in respect of an injured worker is: … (6) This section does not apply to compensation in respect of any of the following kinds of medical or related treatment: (a) the provision of crutches, artificial members, eyes or teeth and other artificial aids or spectacles (including hearing aids and hearing aid batteries), (b) the modification of a worker's home or vehicle, (c) secondary surgery. (7) Surgery is secondary surgery if: (a) the surgery is directly consequential on earlier surgery and affects a part of the body affected by the earlier surgery, and (b) the surgery is approved by the insurer within 2 years after the earlier surgery was approved (or is approved later than that pursuant to the determination of a dispute that arose within that 2 years). ... " The legislative history 1. Section 10(1) of the Workers Compensation Act 1926 (NSW), on enactment, provided for compensation payable in respect of workplace injuries to include "the cost of such medical, surgical and hospital treatment as may in the opinion of the commission reasonably be required to relieve the worker from the effects of the injury". Subsection (2) stated that the "treatment" was to include "nursing, medicines, medical and surgical supplies, crutches, artificial members and other curative apparatus …" 2. Section 10(2) was amended in 1951 to provide (in (b)) that "Medical treatment" included: "the provision of skiagrams [that is, x-rays], crutches, and artificial members, eyes or teeth and other artificial aids and spectacle glasses". 1. Section 59 of the 1987 Act, on enactment, provided that "medical or related treatment" for which compensation was payable included: "(d) the provision of crutches, artificial members, eyes or teeth and other artificial aids or spectacles, … (g) the modification of a worker's home or vehicle directed by a medical practitioner having regard to the nature of the worker's incapacity." 1. This Act was amended in 2012 to include s 59A which limited the period of time for which compensation was recoverable for work injuries. Section 59A was amended in 2015 to introduce qualifications to that limitation. Those that are presently relevant are quoted in [5] above. 2. Neither the Second Reading Speech nor the Explanatory Memorandum relating to the 2015 amendment provides any assistance on the issue presently before this Court. The decision in Thomas v Ferguson Transformers Pty Ltd 1. It is appropriate to refer next to this Court's decision in Thomas v Ferguson Transformers Pty Ltd [1979] 1 NSWLR 216 as it achieved some prominence in the decisions below as well as in submissions in this Court. 2. In that case, the Court was concerned with the form of s 10 of the 1926 Act as it stood after the 1951 amendments (see [7] above). The Court held that the cost of the modification of a motor vehicle to enable it to be driven by the applicant, who was disabled by a workplace injury, and the cost of special driving lessons for the applicant were costs of the provision of "artificial aids" within s 10(2)(b). Mahoney JA dissented in respect of the latter finding. 3. Hutley JA (with whom Hope JA agreed) said at 220-221: "An artificial aid, in my opinion, is anything which has been specially constructed to enable the effects of the disability (the result of injury) to be overcome. The other articles in the subclause, crutches, artificial members, eyes or teeth, are illustrations of this. Because of [the applicant's] injury, she has lost all capacity for natural progression. The modifications to the car have given her some capacity to transport herself. It was suggested that, on this basis, the car was an artificial aid, and every person whose capacity to walk was diminished could have a car supplied at the expense of the insurer. It is not necessary to decide whether this conclusion follows. The essential quality of an artificial aid is that it is an aid specially tailored to the needs of a person, which flowed from the injury. The artificial aid is specific to an injured person. These modifications have this quality. As an artificial aid is useless unless the person for whom it is provided can use it, the provision of an artificial aid includes the provision of instruction in its use" (emphasis added). 1. Mahoney JA referred to a description in the evidence of the modifications as the "installation of hand controls". His Honour accepted that instruction on how to use the modifications could constitute part of the costs of "the provision of such an aid", but considered that the evidence in the case before him was open to the inference that the lessons were to teach the applicant how to drive the motor vehicle, rather than specifically to use the modifications to it (at 222). The Arbitrator's determination 1. The Arbitrator in the present case concluded as follows at [78]: "The provision of a total knee replacement is designed to alleviate the applicant's worsening knee pain associated with the applicant's severe medial compartment arthritis and restore function in the lower limb. The nature of a total knee replacement clearly is an artificial aid as defined by Hutley JA in Thomas, in that it is specifically designed for this applicant to overcome the effects of his disability. In these circumstances I am satisfied that the provision of a total knee replacement falls within the meaning of 'other artificial aids' in s 59A(6) of the 1987 Act." The appeal determination of Deputy President Snell 1. In rejecting the appeal from the Arbitrator's determination, Deputy President Snell stated at [47]: "… The plain words, in those parts of the statutory definitions which deal with 'artificial aids', have changed very little since the decision in Thomas, and not in a way which would suggest the meaning of 'artificial aids' has altered. No developed submission is made by the appellant, that the insertion of cl (g) into the relevant definition in s 59 of the 1987 Act (and the corresponding inclusion of s 59A(6)(b) in the 1987 Act), requires that the term 'artificial aids' be read more restrictively than it was in Thomas. Other than the insertion of cl (g), the appellant has not sought to identify any specific change in the words, which would warrant an interpretation different to that in Thomas. I accept the submission by the respondent and the intervener, that the interpretation in Thomas is consistent with the words of the text. The Arbitrator's reliance on the decision in Thomas is supported by the application of Ex parte Campbell, further discussed below." 1. The Deputy President's reference to Ex parte Campbell was to the statement of James LJ in Ex parte Campbell, In Re Cathcart [1870] LR 5 Ch App 703 at 706 that: "Where once certain words in an Act of Parliament have received a judicial construction in one of the Superior Courts, and the Legislature has repeated them without any alteration in a subsequent statute, I conceive that the Legislature must be taken to have used them according to the meaning which a Court of competent jurisdiction has given to them." 1. The Deputy President also referred to recent statements of this principle in cases such as Public Service Association and Professional Officers Association Amalgamated Union (NSW) v Industrial Relations Secretary [2015] NSWCA 386 at [66], and stated that the legislature's re-enactment (in 1987), after the 1979 decision in Thomas, of substantially identical words to those considered in Thomas indicated a legislative intention that the words have the same meaning as given to them in Thomas. The application to lead further evidence 1. In this Court the respondent sought to lead evidence in the form of a report of Associate Professor Nigel Hope describing what is involved in a knee replacement. 2. The application was said to be prompted by the appellant's following written submission: "It is shortly submitted that on no proper interpretation of an expression like 'artificial aid' could two or three pieces of plastic surgically inserted in a knee to replace lengths of human bone that were excised come within it" (at [17]). 1. This submission did not accurately reflect the terms of the parties' agreement. Whilst the agreement referred to the insertion of plastic between the femur and tibia "and usually the patella", it did not refer to the insertion of "two or three pieces of plastic" (see [3] above). As well as referring to the insertion of the plastic (seemingly only one piece), it referred to the replacement of the ends of the femur and tibia, albeit with material that was not identified. The clear inference was that that material would be attached to the femur and tibia, and not simply "inserted". 2. Even if, contrary to my view but as the appellant's written submission referred to in [20] above implied, the parties' agreement suggested that the replacement material would be plastic, that would not have been of any significance for the purpose of the present appeal. As senior counsel for both parties accepted, the nature of the material to be used in the operation is of no present consequence. 3. These conclusions in my view render the proposed additional evidence of no present significance. The evidence indicates that the replacement material for the ends of the femur and the tibia comprises metal alloys but, as I have said, that is of no present relevance. Moreover, the further detail about the operation that the evidence would provide could not assist in the Court's determination of the issue presently before it. The parties' agreement recorded in [3] above is sufficient to enable that to occur. 4. The respondent has not therefore demonstrated that there are "special grounds" for reception of the evidence (see s 75A of the Supreme Court Act 1970 (NSW)). Ordinarily, a finding of "special grounds" requires the following three conditions stated in Akins v National Australia Bank (1994) 34 NSWLR 155 at 160 to be satisfied: "(1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible." 1. Clearly, neither condition (1) nor condition (2) has been satisfied in the present case. In addition, the nature of the appeal militates against reception of further evidence. The appeal that s 353 allows is one on points of law only. The appeal will not be of that character if the Court needs to make a finding of fact to determine it (Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47 at 51; [1956] HCA 21; Vetter v Lake Macquarie City Council (2001) 202 CLR 439; [2001] HCA 12 at [24]-[25]). 2. For these reasons, the respondent's application to tender additional evidence should be rejected. Determination of the appeal 1. The appellant's principal argument (the first sentence of which has already been quoted above at [20]) was expressed in its written submissions at [17] as follows: "It is shortly submitted that on no proper interpretation of an expression like 'artificial aid' could two or three pieces of plastic surgically inserted in a knee to replace lengths of human bone that were excised come within it. Artificial aids are properly to be seen as composite or single objects working as such to assist a person's disability i.e. walking sticks, crutches, hearing aids, etc., be they partially internal like dentures or conventional hearing aids, entirely external like spectacle glasses or, (rarely) implanted as internal devices which are made up and operate as manufactured devices, of which pacemakers or cochlear implant hearing aids could be seen as examples." 1. To similar effect, the appellant's senior counsel put in oral submissions that an "artificial aid" is "an article or object, complete in itself, which serves a purpose". He compared that with a knee replacement which he said involves "interference with part of a human body and the insertion of objects which come together as part of an overall [or unified] operation" (Transcript p 9). 2. I accept that "artificial aids" must, as the appellant submits, work to ameliorate the effect of a person's disability and may comprise a single object or a composite of objects operating together. However, a knee replacement has these characteristics. According to the parties' agreement, during the surgery the ends of the femur and the tibia are replaced with an introduced material and a piece of plastic is inserted between the bones as reconstructed. Plainly these materials are designed to facilitate the movement and use of the knee after the operation, therefore easing the patient's disability. Their "provision" (see s 59A(6)(a)) cannot occur without a surgical operation. The cost of the operation therefore falls within the statutory provision. 3. The appellant's submission that the article or object must be "complete in itself" cannot be accepted. No such requirement is evident in the statutory words or supported by any authority to which the Court was referred. As the respondent pointed out, many "artificial aids" involve a process of connection of articles to the body in a manner comparable to that involved in knee replacements: "for example, the provision of artificial teeth can involve implanting teeth to support removable dentures; the provision of artificial limbs can involve the insertion of supporting structures in bones to which artificial limbs can be attached; and the provision of spectacles can be replaced by the implanting [of] artificial lenses" (written submissions [19]). 1. Further, the appellant's written submissions (see [27] above) correctly concede that there is no reason why an "artificial aid" cannot be internal to the body. 2. The appellant further argued that the Arbitrator and the Deputy President found against the appellant because they followed Thomas when, in the appellant's submission, that case had been rendered of no assistance by subsequent changes in the relevant statute law. 3. The Deputy President did not however rely solely on Thomas. He stated that Thomas was in his view consistent with the words of the statute (at [47]) and thus expressed a view independent of his reliance on Thomas. 4. Furthermore, in my view, Thomas remains a relevant authority, containing a useful explanation of what constitutes an "artificial aid", notwithstanding that the present legislation is, to some extent, in a different form to that considered in that case. The only arguably material change in the form of the legislation has been the insertion in it of express reference to "the modification of a worker's home or vehicle" as constituting medical treatment (s 59A(6)(b)). By this change, the legislature confirmed that the finding in Thomas reflected its intent that the injured worker's right to compensation in respect of the cost of such modification should not be subject to a time limit. 5. The effect of the insertion is thus to endorse, rather than contradict, the outcome in Thomas. If an inference were to be drawn about the legislative intent in making the insertion, it would be that it was intended to be a confirmation of the decision in Thomas (see Ex parte Campbell referred to at [17] above) and not, as the applicant effectively submits, to narrow, in an undefined fashion, the ambit of the expression "other artificial aids" in the legislation. There is no basis for concluding that the legislature so intended. 6. In any event (and particularly if, contrary to my view, Thomas is no longer regarded as applicable), it is for this Court to interpret the expression. Even if, as the appellant contends, Thomas does not support the decision below, it is clear that it does not contradict it. At best for the appellant it is neutral. It is not therefore a binding, or indeed any, authority supporting the appellant's case. 7. A third submission made by the appellant is that the principles of noscitur a sociis (the meaning of a word can be gathered from its context) and ejusdem generis (where general words follow particular words that denote a class, they may be construed as limited to that same class) should be applied to find in favour of the appellant. 8. It is unnecessary to examine these principles as neither of them, even if applicable, would assist the appellant. The appellant attempts to use both to argue that the proposed knee replacement is different in character from the specific "artificial aids" expressly identified in s 59A(6)(a). Whilst it is a different means of alleviating a disability, there is no feature of the knee replacement which distinguishes it in principle, or character, from the other aids referred to. For example, as mentioned above and as conceded by the appellant, the internal character of the replacement knee does not take it outside the legislative provision, nor does the fact that it comprises a number of material elements which, when affixed or installed, are designed to operate together to alleviate the disability. 9. Nor does it assist the appellant to examine whether s 59A(6)(a) is beneficial in its operation. As stated in ADCO Constructions Pty Ltd v Goudappel (2014) 254 CLR 1; [2014] HCA 18 at [29], to determine whether a statutory provision is beneficial, a court should not construe the legislation under consideration as a whole but instead direct attention to the particular provision in question. On this basis, s 59A(6)(a) is clearly beneficial because it restricts the operation of a limitation on compensation that is payable. As s 59(6)(a) in my view has a clear meaning (at least so far as is presently relevant), it is unnecessary to rely upon that conclusion but, if account is taken of it, it assists the respondent, not the appellant. 10. The appellant further submitted that: "Should the court accept the respondent's argument that the knee replacement surgery is an 'artificial aid' it will lead to the result that the respondent will receive secondary surgery, even though he does not meet the requirements for an exemption for secondary surgery under section 59A(7). This result effectively leaves section 59A(6)(c) without any operation independent of section 59A(6)(a)" (written submissions [32]). 1. This submission should not be accepted. Whilst the parties appear to accept that the respondent's claim does not fall within the "secondary surgery" exception in s 59A(6)(c), there is no reason why, if his case warrants it, he should not receive the benefit of the "artificial aids" exception in s 59A(6)(a). There is nothing in the legislation to suggest that the legislature intended that if a worker could not satisfy one of the paragraphs of s 59A(6), he or she should not obtain the benefit of satisfying one of the other paragraphs. 2. The appellant's fallback argument on the appeal is that, if compensation is payable to the respondent in respect of the cost of the materials to be used in the knee replacement operation, the cost of the surgery is nevertheless not covered. I reject this argument. As indicated in [29] above, the "provision of" the artificial aid in the form of a replacement knee requires surgery. That surgery is therefore within s 59A(6)(a). I should not be taken to be adopting a general rule that the cost of surgery is always a cost of "[t]he provision of … artificial aids", as there may be cases where the insertion of material into a person's body is only an incidental part of major surgery. Each case must be decided on its own facts. Orders 1. In summary, I consider that the Arbitrator and Deputy President Snell were correct in finding that the respondent's total knee replacement was an "artificial aid" within the meaning of s 59A(6)(a) of the 1987 Act. The appeal should therefore be dismissed. As the appellant's fallback argument also fails, its application for leave to appeal should be dismissed. In respect of both, the appellant should pay the respondent's costs. 2. PAYNE JA: I agree with Macfarlan JA. 3. SIMPSON AJA: I agree with Macfarlan JA. ********** Amendments 05 June 2019 - Paragraph [41]: typographical 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. Decision last updated: 05 June 2019