Canute v Comcare [2006] HCATrans 299 (13 June 2006)

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Canute v Comcare [2006] HCATrans 299 (13 June 2006)

Last Updated: 13 June 2006

[2006] HCATrans 299

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S154 of 2006

B e t w e e n -

KENNETH CANUTE

Appellant

and

COMCARE

Respondent

GUMMOW ACJ
KIRBY J
CALLINAN J
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 13 JUNE 2006, AT 10.21 AM

Copyright in the High Court of Australia

MR L.T. GREY: May it please the Court, I appear for the appellant with my learned friend, MR J.P. MRSIC. (instructed by Carroll & O’Dea)

MR P.J. HANKS, QC: Your Honours, I appear with my friend, MR B.H.J. DUBE, for the respondent. (instructed by Phillips Fox)

GUMMOW ACJ: Yes, Mr Grey. It might assist us if fairly soon you took us to the actual statutory text and took us through it and showed us just what the pivot is of the - - -

MR GREY: I will, your Honour, yes.

KIRBY J: It will be such a joy to go to it. I can hardly wait.

MR GREY: Your Honours, I will do that very shortly. Just by way of introduction, this case is about the assessment of permanent impairment compensation for secondary psychological injuries, as we are calling them, under Commonwealth compensation legislation.

KIRBY J: How did all this American stuff come into the law of Australia?

MR GREY: Is your Honour referring to whole person impairments or - - -

KIRBY J: Yes, that table.

MR GREY: Through the American Medical Association.

KIRBY J: Of course it is. How did we get inflicted with this?

MR GREY: That is a good question and I think the answer is simply that it was so widely used elsewhere in the world that it was imported into State compensation legislation and now it appears in various other Acts at State level and in the Veterans’ Entitlement Act and now imported, to some degree, or at least underlying the kind of assessments that are done under this Act. It was the first set of tables, as I understand it, that was based upon the whole person impairment measurements rather than the table of names, which I will explain to your Honours if you are not already familiar with it.

KIRBY J: I am so old, I just remember section 16 of the Workers Compensation Act (NSW) which just had a list and everything was fairly simple and everybody knew what it meant.

MR GREY: Yes. Well, your Honour, section 39 of the 1971 Act that applied in the Commonwealth jurisdiction had a table much like that, that set out if you lose a leg that is a certain percentage of the maximum amount and if you lose an arm that is a certain percentage, and so forth. But what has been done in this Act is to get away from that scheme. That is one of the things that my friend relies on in terms of - - -

KIRBY J: Yes, we realise that.

MR GREY: Your Honour, the facts that are essential to the case can be very shortly stated and I will do that now before moving to the statutory scheme. The appellant suffered an injury to his back in 1998. This injury caused permanent - - -

KIRBY J: He did have an earlier incident, did he not?

MR GREY: In 1997.

KIRBY J: But can we disregard that?

MR GREY: Well, one can disregard it for the purposes of this appeal because relevantly the Tribunal attached the liability to the second injury, so only that injury was relied upon for the purposes of finding a liability to pay the permanent impairment for the back and legs. The permanent impairment compensation that was awarded to the appellant was 12 per cent of the whole person. How that came about does not really matter, but it involved an application of two tables under the guide, which I will take your Honours to shortly, and there was a deduction made for pre-existing problems. There was an argument in the Tribunal about whether that deduction was correct or not, but that does not concern the disposition of the case at this stage. The appellant subsequently developed an adjustment disorder, which was a diagnosable psychiatric condition, arising from the physical injury as a result of pain and depression arising from the fact that he had the original back problem.

GUMMOW ACJ: What was the gap in time?

MR GREY: The time between the time when the claim was made for the back injury to the time when a claim was made for the psychological injury was about four years – just under four years.

HEYDON J: I thought in August 2001 the appellant developed depression, is that the mental difficulty?

MR GREY: Yes, but the claim was made the following year, your Honour.

HEYDON J: I see. July 2002?

MR GREY: Yes.

KIRBY J: And that was a consequence, as I read the material, in part of the injury that he received when he picked up a heavy load, but in part on his reflection on his life and the consequences which the injury had caused to him: his inability to play golf, to walk easily and do other things that he had done before.

MR GREY: That is right. The causal connection that made this injury compensable was the fact that it was connected to the physical injury about which there was no dispute as to connection with employment. The Full Court treated the adjustment disorder relevantly as a disease to which there had been a material contribution made by employment.

KIRBY J: It is central to your argument that that was a separate injury.

MR GREY: That is right.

KIRBY J: At some stage I would be helped to understand why it is a separate injury as distinct from another impairment that arises from the relevant injury for compensation purposes, being the injury that led to the compensation entitlement in the first place.

MR GREY: Yes.

GUMMOW ACJ: Well, that is bound up with the sections, is it not, which we have to go to?

MR GREY: That is right. That is exactly right, your Honour, and I appreciate, your Honours, that is really the central contention that is advanced by the respondent and, of course, was a central plank of the decision of the Full Court, that one could have an injury which was also an impairment of an earlier injury to which the second injury was causally connected. So obviously we need to deal with that.

KIRBY J: Without some intervening event or incident which, as the Full Court point out, are words not used in the Act.

MR GREY: That is right.

KIRBY J: So we have injury and impairment.

MR GREY: Yes, your Honour. The adjustment disorder was assessed by the Tribunal. The Tribunal did actually apply the process of making a finding that it was a diagnosable psychiatric condition. They applied the provisions of the diagnostic and statistical manual that is used by psychiatrists for the purposes of conducting diagnoses of particular conditions. They found that it was an adjustment disorder under that condition. That gave it the status of a diagnosable condition. Then the question arose as to impairment. The Tribunal found there was a 10 per cent whole person impairment under the relevant table. I will take your Honours to that shortly. Then the question was how that got added to the physical impairment of 12 per cent. That takes us to the second limb of the appeal because the - - -

KIRBY J: Pause there. I saw in the Full Court joint reasons that it said that even if the assessor considered that the case was one of somewhere between 5 and 10 per cent, they were stuck with the 10 per cent or the 5 per cent.

MR GREY: That is right.

KIRBY J: Now, how did 12 per cent then come into that in the first place?

MR GREY: How the 12 per cent came was because there was a finding of a back impairment. I think it was 15 per cent. There was a finding then of a consequential neurological leg impairment under another table of 10 per cent. There is a combined value table. When one adds the two impairments together where impairments arise from a single injury one does not simply add them mathematically, but one applies the table. I will take your Honours to how that is done. That gave a result of 24 per cent.

KIRBY J: So that is the result of the table, not of the assessment by the assessor in the first place?

MR GREY: That is so. That was the result of applying the table to it 24 per cent but then it was found by the original delegate, because that injury was never challenged on appeal or that assessment was never challenged - - -

KIRBY J: How did 10 and 12 make 21? Is that because you take one away from the combined - - -

MR GREY: Well, 10 and 12 make 21 because, under the combined value table, one would take 12 and then one would look at the table - at how to add 10 and the table tells you that you add actually 9, not 10.

KIRBY J: That is because there is a minus 1 in the table. Is that correct?

MR GREY: That is right. Because it is designed to adjust for the possibility that there may be some overlap between - - -

KIRBY J: Yes. You must not have any double dipping.

MR GREY: No. That is right. That is what it is for and so the table mandates that if it is a case to which the table applies.

KIRBY J: Talk about artificial. Anyway, let us get on with it. We have to assume that the Parliament knew what it was doing.

MR GREY: So the two issues that arise then are whether it is a separate issue, as your Honour has already identified, and secondly, the second point that arose was whether section 25(4) of the Act, which appears in a section dealing with interim assessment, has any relevance to this case and if it did it would have the effect of preventing the appellant from being able to obtain the 9 per cent assessment that would have arisen from the combined value tables, if that was applicable.

GUMMOW ACJ: Now, can we go through the section?

MR GREY: Thank you, your Honours. The place to start, if I may say so, your Honours, is section 14. The relevant sections are - - -

GUMMOW ACJ: There are definitions first, are there not?

MR GREY: I am happy to do that, your Honour.

GUMMOW ACJ: No, I am not suggesting anything to you, but perhaps you begin with 14 and then go back into the definitions as need be.

MR GREY: Yes, I will, your Honour. The relevant sections are set out in an attachment to the submissions. It might be convenient to go to those, your Honour.

GUMMOW ACJ: Yes, that is very helpful.

MR GREY: Section 14 - - -

GUMMOW ACJ: Is this at the right date?

MR GREY: Yes, your Honour. Where there are some amendments made that were out of time for the injury, they are referred to in the - - -

GUMMOW ACJ: What is the correct reprint number, do you know?

MR GREY: I think 5, your Honour.

GUMMOW ACJ: Thank you.

KIRBY J: And that is because? What is the relevant date we are looking at?

MR GREY: I am sorry?

KIRBY J: What is the date that is relevant? Is that the date of the injury or the date of the assessment by the Tribunal or - - -

MR GREY: The relevant date – in fact, the Act is the same except for one or two sections that do not affect the interpretation. It has been the same right through.

KIRBY J: Yes, but we have to get it right. We are the final court, so we like to know.

MR GREY: The date that would be relevant, your Honour, would be the date that the Tribunal dealt with it, which would be in 2004.

GUMMOW ACJ: That is right. So it is Reprint 5, is it?

MR GREY: I think it is Reprint 5.

CRENNAN J: 1 November 2004.

MR GREY: 1 November 2004. The provisions that appear in the attachment to the submissions are correct.

GUMMOW ACJ: They are correct as at 2004. All right, away you go, section 14.

MR GREY: Section 14. This is what is called the central touchstone for liability in the Full Federal Court. The decision that deals with this is Lees v Comcare. It is not necessary to take your Honours to it.

KIRBY J: That is a bit grandiose.

GUMMOW ACJ: Yes, I think so. Let us just go through the sections without worrying with the case law on it.

MR GREY: Thank you, your Honour:

Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.

GUMMOW ACJ: Wait a minute. There is a definition of “injury”.

MR GREY: Yes. The definition of “injury” has two, as it were, elements to it, or at least three elements to it. A disease – and that is separately defined. If we go back then to the definition of “disease” which is at page 12:

(a) any ailment suffered by an employee; or

(b) the aggravation of any such ailment;

being an ailment or an aggravation that was contributed to in a material degree by the employee’s employment by the Commonwealth or a licensed corporation.

“Ailment” is separately defined further up that page. It means:

any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development).

In this case the Full Court treated the condition, as we read the decision, as a disease, which means it complied with the definition of “ailment”. We do not dispute that.

GUMMOW ACJ: Treated what as a disease?

MR GREY: The adjustment disorder.

KIRBY J: Yes, but do you not have a bit of a problem here? The Act – does it not make an assumption that there is an injury, and if you look at the definitions it is “or”, “or”?

MR GREY: Yes.

KIRBY J: So you have to decide first, has the person had “an injury”, and does it fall into category (a), (b) or (c) injury.

MR GREY: That is right.

KIRBY J: The category that you want the incident at work to fall into is a category (b) injury.

MR GREY: In our respectful submission, it does not matter whether it is (a) or (b), that is to say whether it is a disease or a frank injury.

KIRBY J: No, but the original injury was a frank physical injury.

MR GREY: That is correct.

KIRBY J: You say that subsequently, down the track, he had another injury but - - -

MR GREY: No, we say he developed – we are content with the formulation that was followed right through the various levels of this case which is that he developed a disease which was contributed to in a material degree by his employment by virtue of the original physical injury.

KIRBY J: All right, I will hold my ardent impatience and just wait for you to go through this.

MR GREY: So, your Honour, relevantly we say “ailment” applies here. So if one can categorise the adjustment disorder as an ailment, in this case a mental ailment, then that brings it within the definition of “disease”, provided that the ailment was contributed to in a material degree by the employee’s employment by the Commonwealth or licensed corporation.

GUMMOW ACJ: Wait a minute, where do we see that?

MR GREY: Under the definition of “disease”, your Honour, further down that page on page 12.

GUMMOW ACJ: Yes, thank you.

MR GREY: The Full Court had quite a lengthy discussion although it had not been in dispute in the - - -

GUMMOW ACJ: Do not worry about the Full Court for a minute. What was the material degree, do you say?

MR GREY: Well, the material degree was that it was causally connected or caused by the physical injury about which compensability was not in dispute. So the employment contributed in a material degree to the development of the disease because the employment resulted in the physical injury and the injury itself was the source of the onset and development of the disease.

GUMMOW ACJ: Okay.

KIRBY J: Was there a factual issue before the Tribunal as to whether it was contributed by to a material degree? There was some side theme about marijuana and alcohol but that was rejected, as I understand it.

MR GREY: Yes, that is right. I think everything was in dispute actually in the Tribunal, but the Tribunal found that there was a relevant connection. The Full Court accepted that there was a relevant connection. It was not disputed at the appellate levels above the Tribunal. So if we come back then to the definition of “injury”, that is how we get disease. If it were an injury other than a disease then one simply has to find that it was a physical or mental injury arising out of, or in the course of, the employee’s employment. We do not rely on that in this case:

(c) aggravation of a physical or mental injury (other than a disease) –

We do not - - -

GUMMOW ACJ: You just rely on (a), do you not?

MR GREY: We just rely on (a), your Honour.

GUMMOW ACJ: Is that what Justice Gyles did in his dissenting judgment?

MR GREY: All of the members of the Full Court, as I read the decision, all were happy to accept it was a disease, and we did not take any issue - - -

KIRBY J: The joint reasons also said this is an injury.

MR GREY: Yes, because by virtue of being a disease it becomes an injury for the purposes of section 14, because “injury” means:

(a) a disease suffered by an employee -

So, interestingly, “injury” almost has two different – it is inclusive of disease but it also has a separate meaning when it applies to harm done which is not part of a disease.

GUMMOW ACJ: No, it had to result in an impairment or incapacity for work.

MR GREY: Yes, so that the first thing from section 14 is that:

the injury results in death, incapacity for work, or impairment.

The next section that is relevant to - - -

GUMMOW ACJ: What was the impairment here?

MR GREY: The impairment here ultimately was an impairment assessed under table 5.1 of the guide which describes certain consequences of the adjustment disorder on the mental functioning - - -

GUMMOW ACJ: In terms of the definition of “impairment”.

MR GREY: Yes, I am sorry, your Honour.

GUMMOW ACJ: What was the impairment here?

MR GREY: The definition of “impairment” appears at the bottom of page 12 of the submissions:

the loss, the loss of the use, or the damage or malfunction, of any part of the body or of any bodily system or function or part of such system or function.

GUMMOW ACJ: What was it?

MR GREY: Well, in this case it was mental disturbances that fitted a particular description under a table of the guide flowing from the adjustment disorder.

GUMMOW ACJ: I know, but how does the mental disturbance fit within the definition? I am not saying it does not; I just wondered how it does.

MR GREY: Because it involved a malfunction of the mental system of the appellant.

KIRBY J: Is that in the guide, is it?

MR GREY: Yes. The way the guide works is it has certain descriptions or descriptors of a series of symptoms - - -

GUMMOW ACJ: We do not get to the guide unless we get through the definition. I know practitioners live and die by the guide but in terms of the definition of “impairment” it was a malfunction of what?

MR GREY: It was a malfunction of mental function.

GUMMOW ACJ: Those words do not appear.

MR GREY: No, but - - -

KIRBY J: They appear in the guide.

MR GREY: The guide defines what it is you have to show as a fact to get a particular level of impairment. The Act does not contain that.

KIRBY J: It does not define “impairment” but it defines the way in which you grade - - -

MR GREY: Assess the impairment.

KIRBY J: - - - an impairment that exists.

MR GREY: That is right.

GUMMOW ACJ: What was the impairment that existed? Malfunction of any part of the body or a bodily system?

MR GREY: Yes, of the mental system, as it were, because the malfunction can be of a bodily system or function. In this case, it is the mental function.

GUMMOW ACJ: Malfunction of mental function.

MR GREY: Of the mind or however one puts it. There was no dispute from the Tribunal onwards that the adjustment disorder gave rise to an impairment within the meaning of that phrase.

GUMMOW ACJ: All right. Well, then you say that you fell within section 14.

MR GREY: Yes. So then section 14, we claimed an injury, being the mental injury, the adjustment disorder, which resulted in impairment. That takes you to section 24(1):

Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.

Then, importantly for our argument, subsection (2) requires Comcare to have regard to certain factors which are - - -

GUMMOW ACJ: This concept of permanent impairment, does that just come in through section 24?

MR GREY: Yes, “permanent” is defined separately. I am not sure that that definition appears but the Act simply says “likely to continue indefinitely”. So, something is permanent if it is likely to continue indefinitely. On page 13 of the submissions, I have got it there above - - -

GUMMOW ACJ: Yes, “likely to continue indefinitely”.

MR GREY: So that if one has an “impairment” within the definition which is “likely to continue indefinitely” then section 24 can be invoked or at least applied - section 24(1). Then the question of permanency for the likelihood of continuing indefinitely depends upon how one assesses those factors under subsection (2).

GUMMOW ACJ: What is the relation between 14 and 24? Section 14 says “is liable to pay compensation in accordance with this Act”. Does that mean in accordance with, amongst other things, 24?

MR GREY: That is right.

KIRBY J: So you do get weekly compensation even though you do not have a permanent impairment - - -

MR GREY: That is right, you can do.

KIRBY J: - - - but to get the permanent impairment benefits of 24 you have to show that it is permanent – and they are a notch up.

MR GREY: Yes, that is right. You can get weekly payments without it being permanent, but impairment necessitates permanency.

GUMMOW ACJ: What is the section providing for weekly payments?

MR GREY: Section 19, your Honour.

GUMMOW ACJ: We do not have that.

MR GREY: That has not been extracted but it appears in Reprint 5 – I am not sure exactly where it appears in Reprint 5.

HEYDON J: Page 44.

KIRBY J: There is a lovely little formula: X over NWH times the combination of NWE minus AE.

MR GREY: Fortunately, your Honours do not have to trouble with that - - -

KIRBY J: Fortunately, we do not have to struggle with that.

MR GREY: - - - other than for the purposes of, perhaps, exemplifying one of the arguments that is made between the parties, but we do not seek - - -

KIRBY J: I hope we never have to look at it, not in my time anyway.

MR GREY: My friend says it is very simple, but I am inclined to agree with your Honour.

KIRBY J: Simple for a professor.

GUMMOW ACJ: This is section 19, is it?

MR GREY: Section 19 deals with – and again, that relates to an injury, an incapacity arising from an injury.

GUMMOW ACJ: Yes, section 19(2) really.

MR GREY: Yes.

GUMMOW ACJ: Thank you.

MR GREY: Now, under section 24(2) there are certain criteria one has to look at. I will come back to those for the purposes of the argument, but among the things that are looked at, the duration of the impairment, the likelihood of improvement in the employee’s condition which we interpolate means not the impairment but the condition which has resulted in the impairment and whether the employee - - -

GUMMOW ACJ: Then you get to the guide.

MR GREY: Then one goes to the guide eventually.

GUMMOW ACJ: Subsection (5).

MR GREY: So that under section 24 – there are two stages, if you like, in section 24 we say. One is that one assesses an impairment under section 24(1). One identifies an impairment and makes a conclusion about whether it is permanent or not and then sets about assessing the amount of permanent impairment compensation that would be payable. The degree of permanent impairment of the employee is done under subsection (5) which mandates the use of the guide. Now, one can have in those circumstances more than one impairment which under subsection (5) would be put together in some fashion, depending on how the guide says to do it, to determine the degree of permanent impairment of the employee.

KIRBY J: Why do you not – I have to rid myself of old ways of thinking, but why does not one interpret the Act, given that injuries occur and that you can get all sorts of consequences and sequelae down the track, as having a theory that there is but one injury that will have various impairments?

MR GREY: The short answer to that question, your Honour, is that the way the Act combines with the guide, and there is always a difficulty in using the guide to interpret the Act, I appreciate that, but the two are made to fit together, and the way they fit together, in our submission, is that in certain cases only one injury can relevantly provide a source of a certain kind of impairment. So that when the guide has a table which has set out psychiatric impairment, it refers to the existence of neuroses, psychoses and other diagnosable conditions which clearly refers to mental conditions. So we say it is necessary for the purpose of looking at that table to have found the existence of a mental injury or a psychological injury.

KIRBY J: Yes, but you cannot get away from your need to trace it back to the original injury.

MR GREY: Well, we trace it back - - -

KIRBY J: You have to have a causal connection to the original.

MR GREY: That is true.

KIRBY J: So that if the theory of the Act is that all consequences have to be anchored back in an injury, then you are in trouble.

MR GREY: Well, we say that is not what the Act requires. The Act simply requires there be an injury and whether the injury is primary or secondary does not matter. The Act does not deal with that. Some other Acts do. I have referred your Honours to the New South Wales legislation which actually does make a distinction between primary and secondary psychological injuries. This Act does not. So we say once you get an injury, in this case a mental injury, and one is looking at the existence of a mental or psychological impairment which is resulting from that injury, then that is the relevant injury for the purpose of this assessment, not the physical injury because on our case it would make no sense to proceed directly from a physical injury to a psychological impairment because the criteria of the impairment presuppose the existence of a mental injury.

GUMMOW ACJ: Now, you have got to section 24.

MR GREY: Yes.

GUMMOW ACJ: What relevance does section 25 add to that?

MR GREY: There is a lot of confusion, if I may say so, with respect, about section 25. The section itself deals primarily with situations where an interim determination is made, so that it is possible for an employee to request Comcare or the relevant authority to make an interim determination - - -

GUMMOW ACJ: There was no such interim determination here.

MR GREY: There was none in this case.

GUMMOW ACJ: So it is relied on by the majority in the Full Court in some way as an aid to construction or control of 24, is it, or - - -

MR GREY: No. The majority took the view – and in this they adopted the same interpretation of the Act as his Honour Justice Finn did in a case called Mihajlovic, which is on the list of authorities, which took the view that section 25(4), which is the subsection that we are concerned with particularly here, could apply or would apply to a consequential assessment done not just under section 25 but under section 24, even without an interim assessment.

GUMMOW ACJ: Say that again, Mr Grey.

MR GREY: I am sorry. The argument went like this. When Mr Canute had an assessment done of his back and leg injury which resulted in the 12 per cent payment, that was, for the purposes of section 25(4), “a final assessment of the degree of permanent impairment of an employee”. So that later when he applied for permanent impairment - - -

GUMMOW ACJ: But the permanent impairment spoken of in 25(4) is what is spoken of in 25(1), is it not?

MR GREY: That is certainly the straightforward interpretation of it, your Honour.

GUMMOW ACJ: You have to read the section as a whole and section 25(1)(a) says “permanent impairment as a result of an injury” and you say - - -

MR GREY: Yes. We had an injury.

GUMMOW ACJ: - - - you had your second injury, as it were.

MR GREY: Yes. But the view that has been taken by the Full Court is that section 25(4) is not limited to a case where there has been an interim determination but applies in this case where there has been one section 24 assessment in relation to the back and the legs and then the employee comes back and claims further permanent impairment compensation for the adjustment disorder. It is said section 25(4) means he has to demonstrate another 10 per cent before he can – and we say that is wrong, but that is the argument.

KIRBY J: I realise how you say the second “injury” is the mental injury, but given that you are saying that the second injury is consequential on the first injury - because otherwise you do not link it back to an employment context - why is not the theory of the Act that there is an injury and there is impairment and that what happens as sequelae is in the class of impairment. Let us look at what you are seeking to prove. You are seeking to prove that there is a mental injury, but where is the separate trauma? Where is the separate incident within the body or brain of the individual that amounts to an injury as that word is normally understood?

MR GREY: Your Honour, in this case we do not need a separate trauma or damage within the body because what is being talked about is a disease and - - -

KIRBY J: Even a disease is a physiological change within the body.

MR GREY: With mental diseases I suppose no one can identify what that it is but what we say – the way the definitions in the Act are structured in talking about physical or mental injury implies that you can have mental injury that is completely unrelated to any physical injury. One could develop a disease, for example - - -

KIRBY J: But it cannot be completely unrelated because then you have snapped the causal link.

MR GREY: In this case we would have snapped the causal link but I am just talking in general about the nature of mental injury. Mental injury does not have to be related to physical. For example, a post-traumatic stress disorder that one obtains by seeing the Voyager cut in half by the Melbourne can be a mental injury but involves no physical injury, necessarily. But in terms of the way the guide and the Act are meshed together we say that the scheme has created a situation where you cannot get to a psychiatric impairment without passing through mental injury.

GUMMOW ACJ: Can we go back to the definition of “disease” for a minute?

MR GREY: Yes, your Honour.

GUMMOW ACJ: You say there was an ailment, a malfunction of the mental system, it was suffered by the employee and it was contributed to in a material degree by his employment?

MR GREY: Yes, that is right.

GUMMOW ACJ: That brings in the first incident, or it brings in the back incident.

MR GREY: It brings it in for the purposes of the compensability of the second injury.

GUMMOW ACJ: The question is, because you have to bring it in in that way or it is assumed you have to bring it in in that way, does that have these flow-on consequences that the majority then fixed on in applying 24 and 25?

MR GREY: Yes, that is the question and we say it does not because we say that the mental injury is a separate beast from the physical injury and the impairment that flows from that mental injury is an impairment which cannot be attributed back to the physical injury.

GUMMOW ACJ: The ground for debate is this word “separate” I suppose?

MR GREY: Yes.

GUMMOW ACJ: It cannot be completely separate because it has to be linked, as it transpires, because of this material degree contribution requirement.

MR GREY: No, that is correct, your Honour, but we would say it is relevant for the purposes of assessing the compensability of the second mental injury to make that causal link, but once you have established that, then in assessing the permanent impairment arising from that second injury then one does not need to go back to the physical injury because the second injury, the mental injury, gives rise to the psychiatric impairment.

GUMMOW ACJ: I can see all that. In terms of – particularly if one looked at this Act as a remedial statute designed to assist employees of the Commonwealth, but - - -

MR GREY: There is an argument about where the remedial emphasis is, of course.

GUMMOW ACJ: That is right. The remedial emphasis has shifted and been qualified, has it not? There is a tension throughout all this.

KIRBY J: Mr Hanks raises the question of whether or not your theory is actually against the interests of workers under the Act because instead of aggregating numerous sequelae of an injury and thereby getting over a threshold so that you get benefits under the permanent entitlements, your theory is that you take each injury separately and that therefore you may not get over thresholds and therefore - - -

MR GREY: I have dealt with that in the reply, your Honour, and I will take your Honours to that because although our primary submission was that one did not need to invoke the beneficial construction in a case like this, nonetheless, if one does, one faces the difficulty, firstly, that a lot of the effects are not dependent upon the Act but upon the drafting of the guide which is subordinate legislation, so that one has to be careful to distinguish the effects of the guide, which is fairly much in the hands of Comcare as to drafting, from the Act.

KIRBY J: That is another point about this Act.

MR GREY: Yes. So that we say one does not need to invoke the beneficial construction if one puts the guide to one side, as it were, but if one includes the guide in order to make sense of how the scheme operates, then our construction is more beneficial, and I am happy to take your Honours to that at a time of your Honours’ convenience.

GUMMOW ACJ: Well, what is the answer to Mr Hanks’ point that you will have a series of complaints of which each fall below a threshold?

MR GREY: Well, the answer to Mr Hanks’ point is that the only time that the applicant or claimant for compensation in a case like this one would miss out, putting aside section 25(4), would be where he has a 5 per cent impairment which is assessed and then a separate injury, say a mental injury, and another 5 per cent. That is the only time he would miss out.

On the other side, there are cases like the present one where the effect would be that all claimants like Mr Canute –and there are many, many, many in this jurisdiction who suffer physical injury followed by adjustment disorder or psychological consequences not exceeding 10 per cent of the whole person – would fail to get any compensation, as has Mr Canute, because the construction taken by the Full Court would mean that he would never qualify. He would never qualify.

KIRBY J: Well, maybe it gets back to what you said, that in construing the Act there are arguments for and against and some people have benefits and some will lose benefits on whichever interpretation one adopts and therefore all we can do is to look at the statute and try to find out what it says and give that effect, because there will be winners and losers.

MR GREY: Yes. The point we made in the reply, your Honour, is that the kind of example that Mr Hanks points to, which is the 5 per cent and 5 per cent arising from two separate injuries, could be cured, if that were seen as being an unfair result, by an amendment to the guide.

KIRBY J: Well, I would not count on that.

MR GREY: And I would not count on it either, your Honour. All I am saying, your Honour, is that one does not have to - - -

KIRBY J: Not in the light of the way this case is fought.

MR GREY: It is not a result that follows from the construction of the Act; it is a result that follows from the drafting of the guide.

GUMMOW ACJ: Is this paragraph 11 of your reply?

MR GREY: Yes, I think it is 11, your Honour.

GUMMOW ACJ: Just check.

MR GREY: Yes, that is so, your Honour.

GUMMOW ACJ: Thank you.

MR GREY: Just while your Honour is at that part of the reply, the other answer to Mr Hanks’ point is that the construction put on the sections by the Full Court has the effect of producing capricious results depending upon when the claim for the impairment compensation arising from the second injury is made, and that is explained as simple as I can explain it at paragraph 12 of the reply, your Honour.

KIRBY J: I think our helpful questions have taken you a little bit off your course, but ultimately you are going to have to grapple with the whole person theory of the Act because, again, that stands against your interpretation I think.

MR GREY: Well, not really, because, your Honour, we - - -

KIRBY J: I am not saying you should do it now. I am with Justice Gummow. I think we just have to try and understand the statute.

MR GREY: As your Honour pleases. Can I go through the sections?

KIRBY J: You do that, but at some stage you are going to have to come to grips with that argument.

MR GREY: I will, your Honour. I think I had got to section 25, your Honour. The point I was making about section 25 is that the issue that arises in this case in relation to section 25(4) is whether that subsection has any relevance where one is not dealing with an interim assessment followed by a final assessment. The question that arises is: what is a final assessment? Is any assessment made under section 24 a final assessment? We say no, it is not, and that is consistent with the objects of the legislation, and I will come back to that. We say that a final assessment ultimately really is an assessment that is said to be final. If it is not said to be final, it is not final.

GUMMOW ACJ: The problem in the drafting is that in 25(1) when it says in the last couple of lines, “Comcare shall, on the written request . . . make an interim determination”, it should have said “make an interim determination in accordance with the succeeding subsection to this section”, then there would be no problem.

MR GREY: Probably not.

KIRBY J: But would one not read the subsection in that way, I mean, even without saying that?

MR GREY: Well, one could, your Honour.

GUMMOW ACJ: That is what Justice Gyles said. That was his decision.

MR GREY: Yes, that is right, but the position taken by the respondent is based upon Justice Finn’s view of that subsection, of course, which obviously does not bind your Honours.

GUMMOW ACJ: Yes, I know that, but what is Justice Finn’s view?

KIRBY J: Is that in Laven, is it?

MR GREY: That is in Mihajlovic.

GUMMOW ACJ: But how in terms of construction does he read the section?

MR GREY: His Honour says that to limit subsection 25(4) to only interim assessment situations where there is an interim final would be capricious because it would mean that under section 24 there would be no limitation of 10 per cent.

GUMMOW ACJ: Maybe so, but how in terms of text?

MR GREY: That is his reason, your Honour. That is his reason. The second reason his Honour says is that subsection 25(4) requires – and I will take your Honour to the exact words that his Honour used - - -

GUMMOW ACJ: This is reported in [2000] FCA 285; 97 FCR 304, Comcare v Mihajlovic.

MR GREY: That is correct, and if your Honours go to page 310 - - -

GUMMOW ACJ: This is what was applied by the majority in the present case?

MR GREY: Yes. Well, I am not sure whether they said they were actually following Justice Finn, but they applied the same reason.

KIRBY J: They do refer to Mihajlovic.

GUMMOW ACJ: They do refer to it.

MR GREY: Yes. In paragraph 20 on page 310 your Honours will see that Justice Finn gives two reasons.

GUMMOW ACJ: Well, wait a minute, the first sentence is the point, is it not?

MR GREY: Yes.

GUMMOW ACJ: Of course it is oddly located if it has the result which is put against you.

MR GREY: Yes, I accept that, your Honour. The two reasons that are given – one is why would the legislation take the capricious step of requiring an extra 10 per cent for an increase in impairment under section 25 but not in section 24? Well, we have an answer to that. The answer is it is not capricious because section 25 is dealing with already a situation where the claimant has had two bites of the cherry, that is, he has asked for the interim assessment and then the final assessment. One might think it is nothing strange and the legislature might say, “Well, you have had two bites of the cherry. Now, if you want to come back for a third bite of the cherry, you have got to demonstrate another 10.” Of course, that does not apply under section 24. The second reason that his Honour gives is that section 25(4):

refers to the decision –

that is, the final determination or final assessment, both those phrases are used –

which expresses Comcare’s ultimate conclusion on the degree of permanent impairment of an employee for the purposes of finalising the compensation payable under s 24 - - -

GUMMOW ACJ: Which paragraph are you reading from?

MR GREY: Paragraph 20 of his Honour’s judgment on page 310. It is about halfway down the page.

GUMMOW ACJ: Yes, I see.

MR GREY: So that we ask rhetorically, what characterises the ultimate conclusion? How does one recognise an ultimate conclusion? Nothing that was done in this case said, in respect of the back and leg impairment, “This is our final determination of impairment under section 24”. All that Comcare did was simply say, “Well, here is your assessment for back and leg”.

KIRBY J: Yes, but, I mean, the respondent says it just flows from the fact you have an injury at work, you then seek a final assessment in respect of that injury (including all sequelae that will follow thereafter and be causally linked to it so that you can make claims so that we can close our file).

MR GREY: I know they say that, your Honour, but those words do not appear anywhere in the Act.

KIRBY J: Well, no, but the question is, is that the scheme of the Act?

MR GREY: No. We say no.

KIRBY J: I know you say no, but that would not be an irrational scheme of the Act. I mean, insurance companies or big fat bureaucracies like to close their files.

MR GREY: But it would be irrational, your Honour, if one recognises that situations like the present one occur frequently, that is that people will have an assessment which is assessable at a particular point in time and later on another impairment will arise which is assessable only at a later point in time. The capricious result that that construction gives rise to is that you get different results depending on when you make the claim. So, for example, if Mr Canute had not made the claim for the physical injury for his impairment compensation for physical injury until such time as he had developed the adjustment disorder and the permanent impairment which arose from that, if he had put both those claims in together and they had proceeded to assessment together, then this problem would not have arisen because there would have been no prior “final assessment”.

KIRBY J: Is not the theory of the Act that you do not, as it were, make the assessment of the lump sum until everything is over and that therefore in the ordinary circumstance you do not have the problem that has arisen in this circumstance?

MR GREY: What we would say a correct construction of what the Act requires would create in terms of practical consequence is that Comcare would assess permanent impairment until it got to a stage where it looked like there was no other impairment likely to arise, in which case it might then say, “All right, now we take the view this is the final assessment. We declare that this is the final assessment and then if you want to come back then you are going to have to get another 10 per cent”.

We would have no difficulty with that construction, but to assume that every assessment is a final assessment, even if nothing is said about it being final, or if it does not include what might be predicted to be assessments arising at a later date but not yet assessed, then that would be a capricious result, as I said, because it would allow different results to be achieved depending on when the employee made his claim. Our construction would not do that. On our construction, you would get the same result whenever he made the claim.

KIRBY J: Yes, but the problem with your construction is it is an open-ended file theory of the Act which does not seem to be the scheme of the Act.

MR GREY: No, it is not open-ended, your Honour, because at some point Comcare could reasonably say, “This is it, this is the final and we are now closing the file”, and when they do that - - -

KIRBY J: Surely it cannot depend on what they say. It has to be something more objective than that.

MR GREY: Well, your Honour, I mean, the whole scheme of the Act is that it places into the hands of Comcare the power to make determinations of every relevant factual instance that goes to the award of compensation, so this is no different in that respect. So that is the issue that arises under section 25. Section 27 does not concern us. It simply provides again in subsection (1):

Where an injury to an employee results in a permanent impairment and compensation is payable –

then one is entitled to a further payment which is - - -

GUMMOW ACJ: Has section 25(4) been there since 1988?

MR GREY: Yes.

GUMMOW ACJ: Subsection (5) - - -

MR GREY: Subsection (5) is new, relatively speaking.

GUMMOW ACJ: Yes, but (4) has always been there.

MR GREY: Subsection (4) has always been there.

GUMMOW ACJ: Thank you. I am sorry, I took you from 27.

MR GREY: Only for completeness sake I mention 27 because, again, it refers to:

permanent impairment and compensation is payable in respect of the injury –

Now, the comfort we draw from this section is that if one thinks about the present case where one has a physical injury and then permanent impairment compensation has been paid and non-economic loss compensation in section 27 has been paid, then the claimant develops psychological injury, makes a claim for impairment, when one comes to assess the permanent impairment under table 5.1, which is the psychiatric impairment table, one applies that table. If one gets a relevant impairment there then one goes to section 27 to assess the non-economic loss. We say the non-economic loss must be assessed there. It is not for the back injury. It is not about the back injury, it is about the mental injury. It is about the pain and suffering and loss of enjoyment of life caused by the mental injury. We say the scheme of the Act would require, under section 27, a concentration upon the mental injury not the physical injury.

The approved guide is provided for in section 28. There are now two guides, that is to say, there is the first edition and a second edition. The second edition applies to claims for compensation made after 28 February this year. It was a substantial revision of the first edition of the guide, much more complicated, in some respects, but basically following much the same substance.

KIRBY J: Does it have anything in it that casts any light on the matters that are before us?

MR GREY: What it does, your Honour, that might assist is that it is much more detailed about when one combines impairments under various tables and when one does not, unlike the first edition. In relation to psychiatric impairment, table 5.1 of the second edition is substantially identical, or it is identical to – except, I think, in the organisation of where things are in the table but the criteria are the same and the application of it is the same as - - -

KIRBY J: You are not seeking to get any assistance out of it for the construction?

MR GREY: No. All I would say about it is the same problems will arise under the second edition as arose under the first, depending on which construction one takes. So the approved guide enables Comcare to prepare that guide and then it mandates that the guide is used. In a sense, it parallels section 24(5). It requires that the guide be used to make the assessment and so that the guide and the Act together form the complete scheme. It might be convenient at that stage to take your Honours to the guide.

GUMMOW ACJ: The guide is a disallowable instrument, is it not, here?

MR GREY: That is correct. It is generated by Comcare. It requires the approval of the Minister.

KIRBY J: I suppose we have to have a look at this, do we?

MR GREY: Yes, I am afraid so. The first edition of the guide, your Honour, should have that in the extra materials that we provided. We have not provided the second edition because, in our submission, nothing turns on it.

KIRBY J: No, it is not relevant. Where do we look – 5.1, is it?

MR GREY: Your Honour, it is relevant to go to the principle of assessment first and the introduction which is at page 1, after one passes the Roman numerals. The introduction simply refers to the fact that the statutory criteria or authority for the guide and that it is to be used to determine permanent impairment and non-economic loss – that is under section 27. Then, the next relevant page - - -

GUMMOW ACJ: Is not the relevant statute now the Legislative Instruments Act 2003?

MR GREY: Yes, my friend says that is correct. I think that is correct.

GUMMOW ACJ: He can give us the references to it. I do not think it is sections 48, 49 and 50 of the Acts Interpretation Act any more.

MR GREY: Yes, that is probably right. I have not directed my attention to it, your Honour, but Mr Hanks is on it, I think.

GUMMOW ACJ: Mr Hanks knows, he constantly ponders these things so he will tell us. In other words, I think the reprint, though it was accurate at the time, 28(9) is no longer right.

MR GREY: The guide is in the form that it has always been.

GUMMOW ACJ: Yes, all right.

MR GREY: It has never been amended until the second edition appeared. The principles of assessment are important to the extent that persons making assessments under this guide must follow and that would appear to be mandated by section 24(5) and section 28. It is relevant to look at how the guide says these things are to be done. It starts with impairment; it recites the statutory definition of impairment and adds the gloss, as it were:

It relates to the health status of an individual and includes anatomical loss, anatomical abnormality, physiological abnormality and psychological abnormality. Throughout this guide emphasis is given to loss of function as a basis of assessment of impairment -

So the mere fact you have a diagnosis of a physical or mental injury whatever that diagnosis be is not the relevant point. The relevant point is there is a loss or malfunction, loss of function. That is what the guide is directing at in the criteria -

Impairment is measured against its effect on personal efficiency in the ‘activities of daily living’ - - -

Then it goes on to talk about how impairment – I have already dealt with that.

Non-economic loss . . . is a subjective concept of the effects of the impairment on the employee’s life. It includes pain and suffering, loss of amenities of life, loss of expectation of life -

and so on. If one turns over to page 4, it makes the point that -

Part A of the guide –

that is the actual tables. Part B is the one that deals with non-economic loss. Part A deals with the actual assessment of impairment under section 24 –

is based upon –

as your Honour Justice Kirby pointed out, the American material -

a medical appraisal of the nature and extent of the effect of an injury or disease on a person’s functional capacity and activities of daily living.

We say that is important and it is consistent with the Act, that is that the injury exists but what one is assessing under the guide is the nature and extent of the effect of the injury or disease on the functional capacity. Then there are gradations of impairment, then the Act talks about combined impairments. It says:

impairment is system or function based and that a single injury or disease may give rise to multiple loss of function. When more than one table applies to a single injury separate scores should be allocated to each functional impairment. Where two or more injuries give rise to the same impairment a single rating only should be given.

There are examples of the latter case – one example is in the case of Van Grinsven, which I think is on our list of authorities – how that can arise.

Double Assessment

The possibility of double assessment for a single loss of function must be guarded against. For example, it would be inappropriate to assess a lower limb amputation by reference to both the amputation table and the lower extremity table.

In other words, one gives you an assessment for losing the leg and the other gives you an assessment because the joints do not operate. If you have lost the leg, you would not also get an assessment for the fact that your joints do not operate any more. And importantly:

Where an employee suffers from more than one impairment the values are not added but are combined using the Combined Values Table.

KIRBY J: Yes, that is important, and the Full Court refers to that in the joint reasons. Now, why is that not against you?

MR GREY: It is not against us because the combined value table applies where the impairments arise from one injury, so we say where it arises from one injury - - -

KIRBY J: It does not say that in the guide. You say you realise that, that the guide is adjunct to the statute, and you have got to give effect to the statute, but the overall theory of this is, “We are terrified that workers have been getting double dipping. It is an outrage and it has got to be cut back”, and this is the theory of the Act to which the guide is giving effect.

MR GREY: We say that within the scope of that which the Act requires, which is assessment of an injury and the impairment flowing from the injury, that is correct, and when one looks at an injury which then results in a number of different impairments, one has to guard against double dipping by the application of the guide.

KIRBY J: But where you are linking your claim to compensation back to the injury, I just have difficulty in seeing it as an entirely separate injury as distinct from an impairment suffered from the first injury.

MR GREY: Let me go back a little bit. Neither side here contends, and nor did the Full Court find, that where there are genuinely separate injuries that they should be combined under the combined value table. Nobody contends that what the Parliament intended was the combined value table would apply to all impairments even if they arise out of separate injuries. So that if one had – pose this situation, one has an injury where at the same time a person suffers a physical injury and suffers a mental adjustment disorder or a post-traumatic stress disorder. In other words, they occur from one incident and occur at the same time. Subsequently an assessment is done of each of those injuries for the purposes of permanent impairment. On what both sides agree is the correct construction of the Act and what the Full Court appears to have agreed is the correct construction of the Act, the injuries would be assessed separately, that is, there would be assessment of the physical impairment and that would receive a permanent impairment rating, there would be an assessment of the mental impairment and that would receive a percentage, and the two would not be added together.

KIRBY J: Yes, but we have to give a meaning to this Act. We have to, as it were, try to see the theory of the Act and how it is intended to operate and I just have difficulty with that theory because psychological sequelae are very, very common in injuries – in frank physical injuries.

MR GREY: They are.

KIRBY J: Then to categorise them as at a certain point in time as an entirely separate injury, it may be required by this Act – and I have an open mind on it – but it is a very artificial construct.

MR GREY: We say that the consequence of not doing that creates artificial and capricious results because then your result, your impairment compensation, becomes entirely dependent on when you lodged the claim or when the claim is assessed. That is the result of the construction that is favoured by the respondent.

GUMMOW ACJ: Do you rely on paragraph 39 of Justice Hill’s judgment? It is reported in [2005] FCA 299; (2005) 40 AAR 327.

MR GREY: Yes, I do, your Honour. What we say in simple answer to your Honour Justice Kirby is when you have a separate injury and if as a matter of fact, as the Full Court found, the mental injury in this case was an injury, then it just has separate liability. Now, the question of how you assess the separate liability depends on how the guide is phrased.

KIRBY J: Well, if Comcare construes the matter in that way, let it be on their head. I am not going to struggle to give a theory to the Act that they are not arguing.

MR GREY: Comcare, in Roser, for example, one of the cases we have cited, argued in that case, contrary to the application made by the worker, that there were two separate injuries and they could not be combined for the purposes of producing a whole person impairment. In other words, it is, as it were, accepted, and in our submission correct, that for many situations one does not apply the combined value table even though one is assessing the whole person impairment.

KIRBY J: All right. Well, you tell me what moment arose where the second injury happened.

MR GREY: There is no moment that arises.

KIRBY J: Exactly.

MR GREY: Well, the Act talks about a disease. It dates the injury from the time I think when the first treatment is received. That is the way the Act treats disease.

HEYDON J: September 2001. He felt depressed and he saw a medical adviser.

MR GREY: Yes. Can I just check that? I think it is section 4(7), from memory. I am sorry, 7(4) my friend says. Yes, section 7(4):

an employee shall be taken to have sustained an injury, being a disease, or an aggravation of a disease, on the day when:

(a) the employee first sought medical treatment - - -

GUMMOW ACJ: Is not in your favour the last sentence of paragraph 38 of the primary judge’s judgment:

The fact that the two injuries were caused by a single event (for example, lifting a heavy weight) is not a relevant question under the Act. The Act is concerned with injuries, not incidents.

MR GREY: Yes, that is right, and we say because the Act does not distinguish, as does the New South Wales Act, between primary and secondary injuries, then it does not matter whether one is primary and one is secondary. If you have two harms that are properly described as injuries within the definition of the Act, then they are treated separately.

KIRBY J: The Tribunal referred to an incident and I thought that sounded all very logical, but then the Full Court, and I think Justice Hill, pointed out that that is not what the Act says.

MR GREY: That is right.

KIRBY J: It may be that that is a logical way to go about things, but it just does not happen to be the way this statute was done.

MR GREY: Well, your Honour, it is possible that an injury, for example, could be the result of more than one accident. So that is to say one can have in a case like this a number of accidents which ultimately produce - - -

KIRBY J: Combine to produce.

MR GREY: - - - an injury, for example, a lesion of the spine. Then once one has the lesion of the spine and it meets the description of “injury”, then the question arises, what consequences flow from that in terms of treatment, incapacity and impairment?

KIRBY J: Once you get a provision like section 7(4), you are obviously in the realm of fiction.

MR GREY: True.

KIRBY J: So I give up on my alternative theory.

MR GREY: I would convey upon your Honour not to give up.

KIRBY J: No, I do not give up on the case.

MR GREY: Thank you.

KIRBY J: I will do my duty, but, I mean, that does seem to suggest that you can have a second injury which is a mental injury and it has a deemed date of happening and that is how this Act operates, and that tends to support Justice Hill’s approach.

MR GREY: But also, your Honour, as I will point out with some examples, we say that it avoids the kind of capricious results that would occur from the alternative construction which will produce different results at different times depending on when the assessments are carried out.

KIRBY J: What about the combined – that is the 25 problem, is it, and you say you do not attract that because of the fact that you are a separate injury?

MR GREY: Well, we have two answers to that. We say section 25(4) does not apply because we are dealing with a separate injury. There never was a final assessment done of the psychological injury because there was never any assessment done of the psychological injury. But even if that table 14.1 had some relevance here, we say there has never been a final assessment of the psychological component, as it were. So there has never been a final assessment of compensation arising from the physical injury, assuming that that was a correct way to characterise the causation, because nobody had every looked at the psychological impairment. Nobody could have looked at the psychological impairment because it did not arise until two years after the physical injury.

Then if section 25(4) did not apply but there was still a combination of impairments to be had or to be done under table 14.1, then we say we would be entitled to 9 per cent, whereas the decision in this case was that we should have got nothing. So there are three possible outcomes. We could get nothing, we could get 9 per cent, or we could get 10 per cent, depending on how the construction of the Act is preferred.

KIRBY J: Justice Hill was very proper. This was an appeal to his Honour on a point of law only, was it not?

MR GREY: Yes, correct.

KIRBY J: He took the point that the decision-maker on fact had never decided whether or not there was a second injury and that that was not his province to so decide and therefore he decided that it had to go back to them with the benefit of his instruction to make that factual finding.

MR GREY: That is what he decided, your Honour.

KIRBY J: Now, you supported Justice Gyles’ different view that the Full Court could substitute its own factual finding, but is not Justice Hill correct on the premises that his Honour accepted?

MR GREY: We do agree, with respect, with all of the members of the Full Court which was the question of whether the adjustment disorder was an injury is plain. That is what all of the three members of the Full Court essentially found.

KIRBY J: It might be plain but it is a factual question, is it not?

MR GREY: I cannot remember the precise authorities now, but in the Federal Court - - -

KIRBY J: There have been decisions in the Federal Court that have said where it is absolutely abundantly and totally clear the Full Court can make the decision but there is an issue.

MR GREY: Yes, that is right – make a factual finding. More recently, the Act has been amended to permit them specifically to do but - - -

KIRBY J: That is right. We had a look at this in a case. I cannot remember which.

MR GREY: Roncevich my friend says.

GUMMOW ACJ: Yes.

MR GREY: The point I make, your Honour, is that simply – my learned friend has picked us up on the order that we seek here saying that, well, we are asking for something that we did not challenge before, in effect, in the Full Court. We are content with whichever course this Court adopts, although it appears to us that what the Full Court says is correct, that there is really no value in sending it back. There is no real dispute, I think, with either side, that the adjustment disorder is an injury. It answers the description and it is an injury. The only question is whether it needs to be treated differently.

GUMMOW ACJ: The question is what was the expression of power of the jurisdiction of the Federal Court? It was to make the order, was it, that the Tribunal should have made? It was section 44, was it not?

MR GREY: Yes, section 44.

KIRBY J: At the relevant time Justice Hill only had before him an appeal on a point of law so was not the correct province of the Federal Court to, if an error of law was found, to set aside the order of the court below and to send the matter back?

MR GREY: That was certainly the correct result unless his Honour took the view that the matter was so plain that there would be no utility in sending it back and that appears to be the view that the Full Court took.

KIRBY J: As Justice Gummow says, it really depends on the power given to the Federal Court by the Federal Court Act in that case. We will have to look at the section.

MR GREY: As I understand it, prior to the existing amendment – the new amendments which only apply, I think, from April or May last year, the Court - - -

GUMMOW ACJ: It was designed to overcome this problem.

MR GREY: Yes.

GUMMOW ACJ: Do they have transitional provisions in them?

MR GREY: They do and they only apply, I think, from – it is either April or May of last - they do not apply to this case. We accept that.

GUMMOW ACJ: Right. Our job is to make the order that the Full Court should have made. At the time, I suppose, the Full Court was dealing with it and at that time this new Act did not bite.

MR GREY: Yes. We say that the Full Court was entitled to make a finding of fact if there was no other – if I need to I can get the authority for that proposition, your Honour, but if there was no other, in effect, factual conclusion open other than that the adjustment disorder was an injury the Full Court was entitled to substitute the - - -

KIRBY J: I remember when I looked at that there were some cases in the Full Court that said that. I thought, well, that is a sensible outcome but I doubted whether it was legally correct.

MR GREY: Your Honour, in terms of how the order would be phrased in the event that we were successful we would, of course, accept, if whatever form of – if your Honours were not with us on the power of the Full Court to decide, as they did that this was an injury, and that is the manner in which this appeal has proceeded on both sides, then, obviously, the matter will have to go back.

KIRBY J: We just substitute Justice Hill’s order again. We reinstate Justice Hill’s order.

MR GREY: Yes, and if your Honours are against the substituted order that I have proposed - - -

KIRBY J: You have not really dealt with the whole body or whole person theory of the Act which is I think the mainstay of the respondent’s argument.

MR GREY: I am about to do that, your Honour. The interesting thing about this Act, your Honour, is that although when the Act was introduced much was made of the whole person impairment regime, you will not find the words “whole person impairment” anywhere in the Act. The closest that the Act gets to saying - - -

GUMMOW ACJ: What does that expression mean, anyway? What is it said to mean?

MR GREY: Well, it means that one is rating an impairment of a limb or part of the body on the basis of what doctors, a panel of doctors who are regarded as expert enough to assess these things, have decided is the likely impact on the person’s overall capacity to function.

KIRBY J: To prevent double dipping.

MR GREY: Well, no, the whole person impairment is designed to rate impairments so that the more important the impairment for the purposes of the Act – for the person’s functioning, the greater priority it gets. So, for example, the tables rate loss of digits for example in terms of the impact that the digit is likely to have on the functioning of the whole person. So the ratings assume that if you lose, say, a little finger that the impact on one’s ability to function in the activities of daily living with the loss of a little finger may be different - - -

KIRBY J: Unless, as Justice Mahoney pointed out, you are a concert violinist.

MR GREY: Although this is not dealing with incapacity, your Honour; it is dealing with how one manages the activities of daily living. So they do not normally include one’s professional occupation for the purposes of this guide anyway. Then when one looks at combining the impairments, where they get combined, they get combined so as to try and produce from an injury an assessment of what all the different impairments mean for the functioning of the whole person. That is the thinking behind it.

The only place the Act refers to “whole person impairment” is in – well, refers to something that could be construed as a reference to whole person impairment is in section 24, if one goes back to the annexure to our submissions at page 14. I previously said that on our construction of section 24, 24(1) focuses upon an impairment arising from an injury, and that flows into subsection (2). When one gets to subsection (5), subsection (5) uses a slightly different phrase:

Comcare shall determine the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide.

Now, that is as close as the Act itself gets to importing a concept of whole person impairment. It appears to be saying that one does not just determine the degree of impairment; one determines the degree of impairment of the employee. Now, that could be construed as a reference to some kind of whole person impairment although it does not use those words. But certainly the Act applies that because it applies the tables – it is based upon the tables generated by the American Medical Association which describe themselves as assessing functional impairment of the whole person.

So if one looks for example at table 5.1, which is the table dealing with psychiatric conditions or the one that is relevant to this – and that is found at page 20 of the guide – the heading is “Psychiatric Conditions” and it has a note:

Includes psychoses, neuroses, personality disorders and other diagnosable conditions. The assessment should be made on optimum medication at a stage where the condition is reasonably stable.

Just on the note, we say, insofar as one can derive something from the note, the heading and the note tell us that we are dealing with psychological conditions.

KIRBY J: What page is this, I am sorry?

MR GREY: Page 20 of the guide, your Honour. The whole permanent impairment rating is obtained by comparing the percentage figure which appears at the left-hand side of the table with the descriptors that appear to the right of that number. So a doctor or authority who is carrying out an assessment of whole person impairment under table 5.1 would have to assess how, in this case, the adjustment disorder has affected the person’s capacity to carry out or to deal with stressors of daily living and to carry out activities of daily living. Having assessed it, they then look down the various sets of descriptors until they find one that best matches their assessment of how the person is – what level of function or loss the person is suffering from. Once they do that, they then assign the number to the left of that descriptor as the whole person impairment attributable to that impairment.

KIRBY J: But is not the problem with your theory of the segregation of the physical and the mental that it really runs counter to the whole person approach because very often, indeed usually, indeed one might almost say invariably, it is going to be a combination of the physical and the mental impairments that are going to combine to the person’s inability to cope with the ordinary activities of life.

MR GREY: But what this psychiatric condition - - -

KIRBY J: They do not divide in the mind or in the person, they combine.

MR GREY: But they could do because in a situation where, for example, somebody suffers a physical injury, let us say a back injury, the back injury gets better but until the period that the back injury gets better, the person is off work, depressed, ruminating about their circumstances and develops an adjustment disorder. The adjustment disorder may persist long after the resolution of the back injury, in which case, one would have a back injury no longer existing but still a mental injury persisting permanently. That kind of factual situation can arise so that one has to allow for the fact that the psychiatric condition can exist independently of the physical injury. A physical impairment might not exist independently of the physical injury. In order words, if a back injury with a back impairment were to improve to the level where it was no longer subsisting, one would expect the impairment attributable to it to disappear, the physical impairment, whether that be restriction of movement of the back or whether it be neurological consequence in the leg. But one can have a psychological condition precipitated by a back injury, say, which then resolves and the psychiatric condition does not resolve.

KIRBY J: But where does the guide deal with the problem of a previous assessment and combining them because that is suggested to be your problem.

MR GREY: The guide deals with it piecemeal. We say, in some cases the guide – and I will take your Honour to an example of this – says things are to be combined. Good examples are found at table 9.2. This is the table that was dealt with in one of the Full Court cases. It was discussed in Van Grinsven, but here one can see that it deals with impairments of joints in the lower limb.

KIRBY J: Where is this, what page?

MR GREY: Page 31, your Honour. So if one looks at table 9.2, this deals with impairments of the lower limb. If one has an injury - - -

KIRBY J: Why is that applicable in this case?

MR GREY: It is not. No, I am using this as an example of, your Honour, how the tables work - I am sorry if I misled your Honour about that. It is not applicable in this case but the only point I was going to make was, if one goes down to note 4, one can see that in certain cases, this table as an example, specific provision or direction is made in the guide as to when the combined value table is to be applied. In this case, it says if the injury affects more than one joint – so you have an impairment, say, of the knee and then an impairment of the ankle – you assess them separately and then you combine them using the combined value table. That seems entirely logical where those impairments arise out of a single injury to the leg.

In table 9.6, for example, and table 9.5, which is how Mr Canute got his first assessment of the physical injury permanent impairment – you will find this at page 36, table 9.6 – the note to table 9.6 refers, for example, in the second part of that note:

Lesions of the spine are often accompanied by neurological consequences. These should be assessed using Table 9.4 or 9.5 –

9.4 applies to the upper limb, 9.5 to the lower limb –

and the results combined using the Combined Values Table.

That is what happened with Mr Canute. He got an assessment of impairment under table 9.6 for his spine – for his lower back and then he got an assessment under table 9.5 for the resulting neurological loss of function of his lower limbs – difficulty walking, for example. So in some cases the Act says you must combine them in certain cases. In some other cases, for example, table 3.1, which deals with impairments of the endocrine system, for example, diabetes, the note there recognises that in some cases diabetes can cause consequential physical problems.

Now, absent that note, they might be treated as separate injuries. They might be assessed as separate injuries in the way that we say the psychiatric injury would be because diabetes could cause problems with eyesight. That is a well-known consequential result of diabetes. So that one could say the disease diabetes has resulted in a physical injury to the eye, that would be treated as a separate injury, except in this case the note says combine them, and that is sufficient to cause them to be combined.

In table 5.1, the psychiatric table, there is no note. There is no note saying that in any case where one is dealing with a consequential psychiatric or secondary psychiatric injury they are to be combined. In the New South Wales Act one will find a reference to how secondary injuries are to be applied, in some cases combined or used to assess non-economic loss or not included at all. In other words, where the legislature in that State was trying to make a specific provision for how to deal with secondary psychological injury, it actually amended the Act and put in specific directions as to how it was to be done. We say there is nothing in the Act and there is nothing in the guide that says that - - -

GUMMOW ACJ: The guide is controlled by section 28(1)(a), is it not?

MR GREY: That is right, yes, your Honour.

GUMMOW ACJ: It has to set out “criteria by reference to which the degree of permanent impairment of an employee resulting from an injury shall be determined”.

MR GREY: Yes, that is right, and it does not - - -

KIRBY J: The very fact that it says “resulting from an injury” runs into your argument that that is of each and every injury.

MR GREY: That is right, and we say table 5.1 can only sensibly respond to a mental injury, because otherwise you would be asking yourself, “How does the back injury cause minor distortions of thinking?” You must go through the intermediate step.

KIRBY J: I do not have a problem with that. I mean, if you have a very painful back, I can well understand that that would cause distortions of thinking because of the pain.

MR GREY: But, your Honour, in terms of how the table is structured, the table is dealing with – and its heading “PSYCHIATRIC CONDITIONS”. So if one is talking about minor distortions of thinking which are not associated with a psychiatric condition, in our respectful submission, it would be applying that table of the guide for a purpose for which it is not intended.

CALLINAN J: Mr Grey, in paragraph 15.4 of Mr Hanks’ written submissions he says that the majority in the Full Court effectively found for the respondent by giving a broad meaning to the word “impairment” or in accordance with the definition of “impairment”. Do you agree with that as being a reasonable summary of the majority’s decision?

MR GREY: Not exactly. What the Full Court did was to say that there is an overlap between the kinds of things that might be caught by the phrase “ailment” with the definition of the phrase “impairment” and we say the words are not the same. They clearly do not apply to the same thing.

CALLINAN J: Is it a problem if you look then at section 24(2) which is the section that says:

For the purpose of determining whether an impairment is permanent, Comcare shall have regard to:

(a) the duration of the impairment - - -

MR GREY: Yes.

CALLINAN J: If you take the approach of the majority in the Full Court, you would never be able to make an assessment of the duration of the impairment if there is a late onset of psychiatric or psychological symptoms. Is that not right?

MR GREY: I am not sure about that, your Honour.

CALLINAN J: Well, unless you treat a late onset, which will often be the case and it really was the case here, as a separate injury, you would not be able to comply with or not easily comply with section 24(2), would you?

MR GREY: Well, where you would have difficulty complying with - - -

CALLINAN J: Unless you treat them as separate injuries.

MR GREY: Yes, I think that is right, your Honour. I think that is right. But paragraph (b) is the one that gives us difficulty because paragraph (b) must, when one is talking about a psychiatric impairment, to be given any sensible interpretation, require Comcare to focus upon the likelihood of improvement in the psychiatric condition.

CALLINAN J: It is the same sort of question as (a) raises – exactly the same sort of - - -

MR GREY: Yes, what your Honour says is absolutely right, with respect, because by the time the assessment of the permanency of the psychiatric condition is being looked at, the permanency of the physical condition has already been determined, so there is no longer – it is assumed now that it will be likely to continue indefinitely, so the question of looking at the likelihood of improvement in the physical condition does not arise. The condition that is referred to must be the mental condition, and that is consistent with it being treated as a separate injury - with the condition being a separate condition.

CALLINAN J: Well, the term “ailment” could have been used throughout perhaps in the Act if the legislators wanted to do that and then you might not have these questions arising, or “injury” might have been used all the way throughout or “an event”.

MR GREY: Yes. But the concept of having an impairment resulting from an injury is not a difficult one. The only difficulty is if one imports into the Act something which is not present in its words, namely that a secondary injury is different to a primary injury. If one does not import that in – and we say there is not authority, even in the second reading speech, if one has an occasion where resort to that is the proper thing to do, that second reading speech does not contain any reference to treating secondary injuries any differently to primary injuries. If it answers the description of an injury, we say it is an injury and it is treated separately. As I have already indicated, we say that that interpretation in fact makes the regime of the Act much more uniform and avoids the kinds of factual capriciousness that occurs under the competing construction where the result depends upon the time that the assessment takes place.

Going back to the guide, your Honour, one thing we say comes out of this guide – and my friend has given some examples which, with respect, we say are not correct. We say that right through this guide one can see that what the guide is directing its attention to are things which represent loss of function or damage as opposed to the concept of a disorder or an ailment. For example, my learned friend in paragraph 35.2 of his submissions refers to facial disfigurement in table 4.2.

If one looks at 4.2, this section is not concerned with how the changes to the facial appearance occurred. It is not concerned with the nature of the injury; it is only concerned with the outcome of the loss. So, for example, where it talks about depression of the cheek, that is not a description of an injury; it is a description of what you see when you look at the person. It is a description of a disfigurement arising from an injury, whatever that be, whatever injury might have caused that depression. It could be a fracture, it could be anything, who knows. It could be a neural malfunction of one of the facial cheek nerves, one does not know. But all that section is talking about is when you look at the person you see a depression of the cheek and if that is due to the injury, then it is compensable.

We do not see that there is any overlap there with the concept of injury. Similarly, with tinnitus, if one goes to 7.2, again, one has disorders of the ear, nose and throat. The disorders could have a medical diagnosis which is not referred to in this section and does not require a medical diagnosis to assess the impairment. If one makes the medical diagnosis separately that there is a compensable condition and it gives rise to one of these losses or impairments, then those impairments are compensable.

Now, tinnitus, your Honours will no doubt know, is a kind of ringing in the ears, uncertain origin, thought to be neurological, but it does not describe necessarily an injury, although my friend says it does. It describes a consequence of an injury – a loss or a damage that arises from the injury.

KIRBY J: You are scraping the bottom of the barrel now, are you not?

MR GREY: I am sorry, I did not mean to do that, your Honour. I am just trying to point out, your Honour, that the description that my learned friend gives is not entirely correct.

GUMMOW ACJ: You say he was scraping it.

KIRBY J: Yes, but maybe you would do better to answer these points once they are made by Mr Hanks, if they are pressed on us.

MR GREY: Yes. I am trying to answer those points, your Honour. I am saying that the description of – well, two things. One is that you can never have an impairment which is an injury because the Act is dependent upon a linkage which is injury results in impairment. If we are correct that a mental injury is an essential requirement, then that forms the basis for a separate assessment of impairment. If there be some overlap in the guide, we say that ultimately will not affect the interpretation of the Act but is simply to do with the drafting of the guide itself.

HEYDON J: Do you say that the guide is an aid to the construction of the Act on the basis that it was introduced at the same time as the Act was enacted and it may be seen as part of the whole scheme?

MR GREY: Yes, it can be seen as part of the whole scheme, your Honour. There is no doubt about that.

GUMMOW ACJ: I am not sure about that. It may be that in some respects the guide goes beyond its charter.

MR GREY: That is right.

KIRBY J: But as well as that, it is made by the Executive Government. The Act is made by the Parliament of the Commonwealth.

MR GREY: That is right, your Honour, and all we say is that one can - - -

HEYDON J: The Act is the result of a Bill which was drafted under the supervision of a member of the Executive, and that member of the Executive also had carriage of the guide. Is that not a guide to the overall scheme, arguably maybe not in this case, but is that not an arguable aid to statutory construction and not assisted by labelling one thing the legislative instrument and the other the Executive?

MR GREY: Well, your Honour, I do not know that the two arose separately because – arose under the control of the same person because the responsibility of drafting the guide - - -

HEYDON J: Control of the Executive.

MR GREY: - - - was vested in the statutory authority, not in the Minister.

HEYDON J: But does not 28 tell us that it was under the control of the Minister?

MR GREY: Well, only that section 28 requires that the guide be approved by the Minister but the drafting of the guide is in the hands of Comcare, not the Minister.

HEYDON J: Well, approval is veto.

MR GREY: I imagine it includes veto, but - - -

KIRBY J: Well, the fact that Parliament has given its acknowledgment that there will be a guide and an endorsement to some extent to the making of the guide suggests that it is to be looked at as part of the entire scheme.

MR GREY: Yes, and we do not dispute that.

KIRBY J: But insofar as there is any tension, it is the Act of Parliament that has to be given priority.

MR GREY: Yes, exactly, your Honour. We do not dispute the fact that one can determine the flavour of the whole scheme by reference to the guide. That is the way one does it.

KIRBY J: I had not appreciated before you made the point that the whole person assessment is not something that is in the Act. Unless you can read it into the words of the Act, it is not expressly stated there.

MR GREY: Not in those terms, no.

KIRBY J: It is part of the scheme of the mechanism of the guide.

CALLINAN J: The majority refer to it at paragraph 72, page 96 of the book, in similar terms to Justice Heydon.

MR GREY: Yes, that is so, your Honour, and we agree with that. We agree that that is the manner in which reference can be made to the guide for the purposes of looking at the Act; in other words, the scheme that was put together at the same time.

KIRBY J: Yes, I notice what Justice Mason said there in Brayson. One always pays a lot of respect to what his Honour said.

MR GREY: Curiously though that reference to his Honour Justice Mason occurred not in the judgment but in the argument that took place. It is actually a quote from the argument. If one looks at the judgment one will not find it.

KIRBY J: That is something new.

MR GREY: Yes, one will not find it, your Honour, because I have been looking for it.

KIRBY J: Yes, I hope they do not quote everything we have said in argument today. Some of it has just been made to keep us warm.

MR GREY: But it was consistent with the decision in the case, you would have to say.

GUMMOW ACJ: Well, it is obvious, apart from anything else, but section 28(1) has to control, and if the guide strays beyond 28(1), well, there are problems.

MR GREY: True. But I respectfully adopt what your Honour says.

GUMMOW ACJ: Not problems for you; problems for Comcare.

MR GREY: Yes, I respectfully adopt what your Honour said, that to the extent that Comcare relies upon what it sees as anomalies caused in the assessment of the guide under particular constructions that may be a function of the fact that the guide has not been drafted in a way where it reflects what the Act requires of it.

GUMMOW ACJ: Is there anything else, Mr Grey?

MR GREY: Only the section 25(4) point, your Honour, which is plain enough. If I take your Honour to the written submissions it is probably set out clearly enough there.

KIRBY J: Well, if it is there you do not have to read it.

GUMMOW ACJ: This is the point Justice Gyles made very forcefully, is it not?

MR GREY: Yes. Thank you, your Honour.

GUMMOW ACJ: Which we have mentioned earlier this morning.

MR GREY: The only other thing – no, I will not take it up; perhaps in reply I can do it. Thank you, your Honours.

GUMMOW ACJ: Thank you, Mr Grey. Yes, Mr Hanks.

MR HANKS: Of course, the issue does depend upon the construction of the Act and, critically, on the language used in section 24(1) and (5) and in section 28(1) and (4). I will take your Honours to those again, if I might be given that indulgence. We are concerned, as the Tribunal was concerned, with the liability to pay compensation which is created by section 24(1). It is a specific type of compensation, essentially, although subsection (1) does not articulate this, it is the compensation that is payable under section 24 – compensation for permanent impairment. It is payable:

Where an injury to an employee results in a permanent impairment -

so that it immediately posits a question, is there an injury and can one identify an impairment that has resulted from that injury, a causal relationship. If the answer is in the affirmative, then compensation is payable to the employee in respect of the injury. Everything hinges on that formula and in this case, to anticipate a point I wish to make a little later, the majority in the Full Court took the view that there was that causal relationship between the injury to Mr Canute’s back in 1997 and the impairment reflected in his adjustment disorder first treated in 2001.

KIRBY J: But do you accept that there were two injuries to him?

MR HANKS: There were, but they were causally related, as your Honour has pointed out - - -

KIRBY J: I realise that, but if there are two injuries and you just have to trace the snake or the ladder and follow it through.

MR HANKS: Yes, but the snake starts with the initial injury that arose out of or in the course of employment, in this case, the injury to the back. If you follow the ladder, perhaps, that is a more optimistic metaphor, your Honour, than the snake, you follow the ladder up, you come to the adjustment disorder as one of the impairments that is a result of or that results from that injury. Our position is that if there is a single injury that results in more than one impairment, then those impairments are treated together as consequences of or, to use the term of the statute, results of that injury notwithstanding that one of the impairments may also be traceable to another injury. So long as it is traceable to the injury which arose out of or in the course of employment, here the back injury, then when one comes to section 24, one treats that impairment along with the other impairments resulting from that injury.

GUMMOW ACJ: Why is that so as a matter of text? What sections are we looking at - 14 at the moment or 24?

MR HANKS: I do not think so. With respect, your Honour, we do not need to go to section 14. Section 14 is just the primary liability provision which leads into provisions like 19 and 24 and 27, et cetera; section 16 dealing with medical treatment. Section 14 is a gateway.

GUMMOW ACJ: That is right.

MR HANKS: But our concern has to be with section 24 because it defines the circumstances in which compensation will be payable for permanent impairment.

GUMMOW ACJ: Yes, that is right.

MR HANKS: And, as I put it to your Honours, it posits that causal relationship. A very direct causal relationship results in – and one sees that causal relationship posited, for example, in subsection (5).

GUMMOW ACJ: Wait a minute. You read 24(1):

Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.

MR HANKS: Yes.

GUMMOW ACJ: What, and then you add some negatives, do you not? You find some words of exclusion. Are we not agreed that there are two injuries here?

KIRBY J: You have to add “and not if the injury is an impairment from an original and earlier injury”.

MR HANKS: No, your Honour, we do not offer that negative qualification.

GUMMOW ACJ: I know you do not.

MR HANKS: But, we do say this, your Honour, that you need to understand the nature of this liability that is created by 24(1) by looking at the associated provisions dealing with permanent impairment.

GUMMOW ACJ: Yes, but you want to say “has liability and no other liability” you see – “is liable only”.

MR HANKS: This is the liability that is created. The liability is one to pay compensation in respect of that injury, that is, that injury which results in the impairment.

KIRBY J: Yes, but Justice Hills’ theory is that here there were two injuries, separate and distinct, and that seems to get some endorsement from the fact that the Parliament has provided this artificial construction that you can have an injury in the form of a mental injury and then you deem that to have happened at the time the person makes the claim.

MR HANKS: Can I just deal with that tangential issue, if I might, your Honour? Your Honour is referring to section 7(4), a deeming provision.

GUMMOW ACJ: Yes.

MR HANKS: The effect of that is quite limited. Its primary function would to be deal with the transitional provisions in section 124 which require you to identify the point in time at which an injury occurred. Did it occur before or after 1 December 1988? That is to deal with the transitional provisions which allow for people to recover compensation under this Act if they suffered an injury at the time that the 1971 Act was - - -

GUMMOW ACJ: Are you saying section 7(4) is only a transitional provision?

MR HANKS: It is not only a transitional provision but it serves the transitional provision in section 124. That is its function.

KIRBY J: It may, but its opening words are “For the purposes of this Act”, ie, the whole Act, and it does tend to give a fictitious or artificial approach to the separate mental injury.

MR HANKS: Yes, quite so, your Honour, but it has no function that we can see in relation to section 24 where the date of the happening of the injury is not relevant. It is only relevant where a particular date has to be identified for the purposes of the Act. The most obvious case or example of that is section 124. Can I take your Honours on to subsection (5) of - - -

KIRBY J: It does not say on the date, it says:

an employee shall be taken to have sustained an injury, being a disease . . . on the day when –

That does indicate Parliament has turned its attention to disease-type injuries and says, well, they do not look like injuries, as we commonly use that expression in the English language, because there has not, as it were, been an immediate trauma and an immediate physiological change as a consequence, but we are telling you they are injuries for the purpose of this Act and they happen on the day when the employee first seeks medical treatment.

MR HANKS: That will become relevant only in the situation where you need to identify a date for the happening of the injury. As I have indicated to your Honour, we do not see that the identification of that date plays any part in the assessment of compensation under section 24. All that is necessary is that there be an injury and that there be an impairment that results from that injury.

Where that identification is made then the next critical provision is subsection (5) which requires Comcare to:

determine the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide.

That interacts with section 28(4) which makes the provisions of the approved guide binding on all - - -

KIRBY J: The appellant says that you stumble there because it says “resulting from an injury” and they say, “Fine. They did the assessment for the first injury. They just have not done it in respect of the second injury which is a separate injury”. See it does say “resulting from an injury under the provisions of the approved Guide”.

MR HANKS: Yes, and we say, your Honour, that on the facts as found by the Tribunal in this case, the impairment – we will call it the psychological impairment – suffered by Mr Canute is one that results from the injury to his back. The fact finding undertaken by the Tribunal is very clear. It can be found in the appeal book at page 39 and at page 40.

GUMMOW ACJ: It is paragraph 75, perhaps, that is critical, is it not?

we find that...It is also the Tribunal’s finding that as a result of that physical injury, arising out of the same incident -

That is Justice Hill’s point.

MR HANKS: Yes.

CALLINAN J: Is not that to treat “injury” as being defined or as being synonymous with “event” and is that not the problem? That is what Justice Gyles says is a problem.

MR HANKS: It would be.

CALLINAN J: Is that not error, if we assume it to be an error for present purposes, repeated by the majority in paragraph 75 at page 97 where the majority where the majority speak of “a single initial compensable injury”.

MR HANKS: Yes.

CALLINAN J: That is not the definition of “injury”. Injury is a disease or an injury, being a physical or mental injury. It does not say anything at all about an event.

MR HANKS: With respect, your Honour, the references to incidents and events are a distraction that probably originated with the judgment of Justice Spender in Roser - - -

CALLINAN J: It does not matter how they resulted - - -

MR HANKS: No. But they are a distraction - - -

CALLINAN J: Whether you accept that it is wrong to treat “injury” as synonymous with “event”. Is that correct?

MR HANKS: It would be.

CALLINAN J: Is that not exactly, in the paragraph to which I have referred, what the majority did?

MR HANKS: I believe not, your Honour. No.

CALLINAN J: I will need a lot of persuasion about that.

MR HANKS: Well, if I might come to that. I did want to deal with Justice Kirby’s question and take the Court to the findings of fact made by the Tribunal.

KIRBY J: I know that but Justice Hill’s answer to your proposition was he said they reached that finding of fact because they did not approach the law correctly. They did not realise that there was a separate injury that was available and that therefore it has to go back to them to consider whether or not there was a mental injury. They have not addressed the possibility that there were two injuries.

MR HANKS: If we take paragraph 75, as Justice Gummow suggested, on page 40 of the appeal book, we would have thought that it was plain that the Tribunal found the existence of an adjustment disorder which arose out of the back injury. That is plain.

KIRBY J: Yes, but that does not grapple with Justice Hill’s point. Justice Hill’s point was they have just taken the view back injury, psychological sequelae.

MR HANKS: Yes.

KIRBY J: Has to be consequential, one injury, therefore it is an impairment flowing from that.

MR HANKS: Yes.

KIRBY J: But Justice Hill’s point is that this Act contemplates a back injury and a mental injury and they have not interposed a consideration of whether the facts fitted into the mental injury as an injury.

MR HANKS: In our submission, your Honour, that is an unnecessary sidestep. It would just be a diversion from the critical question do we have an impairment that results from the back injury? If we do, then we compensate it under section 24 by going to the guide and working out the degree of permanent impairment of the person. We do that because section 28(4), as well as section 24(5), demands that we do that, that is, that we use the guide to make a determination of:

the degree of permanent impairment of an employee resulting from an injury -

and as your Honour pointed out somewhat earlier today, we have that back injury which itself provides the very foundation for characterising the adjustment disorder as a disease and therefore an injury, but the consequences of the adjustment disorder, as the majority put it in the Full Court, are properly characterised as an impairment that results from the back injury and therefore they are to be compensated accordingly. We have made the point that in some cases that will operate to the advantage of the employee and in some cases it will operate to the employee’s disadvantage.

In the present case, because of the chronology, if I can put it in those terms, the sequence of events, it has operated – well, perhaps I should qualify that. Because of the sequence of events and because the impairment represented by the adjustment disorder was assessed as only constituting 10 per cent impairment, it is operated to the disadvantage of the present appellant.

As our friends have put it, if Mr Canute had delayed his claim for permanent impairment compensation until the adjustment disorder developed and brought it forward and claimed impairment from it at the same time as he claimed impairment for his back injury, he would not have been affected by section 25(4). He would not have had to face that 10 per cent threshold. Alternatively, if his level of impairment had not been greater - the impairment from the adjustment disorder had been greater than 10 per cent, the threshold would not have caused him any difficulties, even applying section 25(4).

GUMMOW ACJ: Can you just explain to me how you pray in aid the guide as encompassing the psychological disturbance, to use that - - -

MR HANKS: We do it this way, your Honour - - -

GUMMOW ACJ: So that it is all embraced, as it were, in the one evaluative activity under 24. Which particular part of the guide?

MR HANKS: Well, my understanding of our argument is that it depends on the Act. It depends on the causal link posited by section 24(1) and then on the requirement that flows out of section 24(5) that the assessment be undertaken and it be an assessment of the degree of permanent impairment of the employee, of the person - - -

GUMMOW ACJ: From an injury?

MR HANKS: Yes, from an injury.

GUMMOW ACJ: What was the injury here?

MR HANKS: The back injury. What is it that lies at the foundation of this impairment? What is it that caused this impairment which is also capable of being diagnosed as a disease, namely - - -

KIRBY J: The answer to your rhetorical question is, originally it was a back injury and then later there was a mental injury and the mental injury is provided for by the Act. It is separate. It is deemed to happen at a particular time. It just has to be traced down its own track, and the Tribunal did not do that.

CALLINAN J: The definition of “injury” recognises, disjunctively, physical or mental injury.

MR HANKS: With respect, your Honour, we would have to disagree. There is no disjunction - - -

CALLINAN J: It says so. It says “an injury (other than a disease) suffered by an employee, being a physical or mental injury”.

MR HANKS: Yes, but there is no disjunction, with respect.

CALLINAN J: The word “or”, “physical or mental injury”. There may be both or either.

MR HANKS: With respect, your Honour, the word “or” does not always connote a disjunction. The way in which it is used here, in our submission, is inclusively so as to ensure that both physical injuries and mental injuries or, to take the definition of “ailment”, which also uses a similar formulation, that both physical ailments and mental ailments are included. There is no suggestion, we would say, that the Act intends to treat these species of injury or species of ailment distinctively.

CALLINAN J: Just separately. Not distinctively, just as separate injuries.

MR HANKS: No, not even separately. They are brought together in the definition of “ailment” and the definition of “injury”.

CALLINAN J: But in the nature of things they will often occur at very different times.

MR HANKS: That may be so but, again, with respect, your Honour, that does not bear on the construction of the Act. The point that your Honour raised with my friend about section 24(2) which functions to direct Comcare to have regard to certain matters when determining whether an impairment is permanent, in our submission, the reference to the duration of the impairment is no more than one of the relevant matters that has to be taken into account, but it does not present any greater difficulty in the case of an impairment of the type with which we are dealing here – one that affects the mind – than it would with an impairment that affects the body.

Duration, in our submission, is a prospective focus. One is looking forward. One is seeking to determine precisely, as the definition of “permanent” in section 4(1) says, whether it is likely to last indefinitely. There is, in our submission, no greater difficulty in doing that with a mental impairment or a psychological impairment than there is with a physical impairment.

KIRBY J: The appellant does not dispute that. It just says it is a separate question.

MR HANKS: Quite so, but Justice Callinan put a question to my friend - - -

CALLINAN J: On the sort of premise that exists here that the psychological, if you like, impairment, injury or ailment, however you describe it, was of relatively late onset and would not have been readily predictable for some time after the occurrence of the back injury.

MR HANKS: But you only come to this question as to assessing the duration of the impairment at the time when the impairment presents itself and then you have regard to it. In our submission, it is an entirely neutral matter on the problems with which we are wrestling. The question with which we are wrestling essentially is whether, as the majority put it in the Full Court, when you have a consequential injury, as you do here, an injury which is capable of being separately diagnosed as an adjustment disorder, it is one which on the findings of fact was a direct result of or arose out of the back injury, where you have that situation, are you to compensate it separately? We would say quite properly putting on one side the fact that it might be characterised as mental rather than physical, we would say that that is a distinction without a difference as far as this Act is concerned. It is a consequential injury. Is it to be compensated entirely separately so far as section 24 is concerned?

KIRBY J: But you accept that it is a separate injury under the Act?

MR HANKS: Yes, indeed.

KIRBY J: If it is a separate injury under the Act, why do you not compensate it separately?

MR HANKS: Because in these circumstances the impairment which is embodied in that injury – the impairment, the loss of function or the malfunction of a bodily system, is one that is a result of the back injury. That is why.

GUMMOW ACJ: Yes, but the Act does not say that. That is the problem.

CRENNAN J: The Act does not make any distinctions between consequential and initial or primary and secondary, does it?

MR HANKS: No, what it - - -

CRENNAN J: Do you point to anything other than what you pointed to in section 24(1), “results in”, as support for this argument that you distinguish between a primary injury and a consequential injury?

MR HANKS: No, your Honour. It is a repetition of that phrase in other subsections. I have taken your Honours to subsection (5), “the degree of permanent impairment of the employee resulting from an injury”, the same concept, although here perhaps it is elaborated to some extent. It is not just permanent impairment resulting from the injury, but it is the degree of permanent impairment of the employee resulting from the injury. You get the same point made in section 28, the power to make the approved guide in subsection (1)(a). It sets out:

criteria by reference to which the degree of the permanent impairment of an employee resulting from an injury shall be determined –

Then you go to subsection (4), which gives the guide its bite, as it were. It makes compliance with the guide mandatory. There where the decision - - -

KIRBY J: Yes, but only in respect of an injury and then the issue is, is it separate or - - -

MR HANKS: With respect, your Honour must take the whole phrase: “the degree of permanent impairment of an employee resulting from an injury”. In those circumstances, the provisions - - -

GUMMOW ACJ: Your voice falls when you come to the last couple of words.

MR HANKS: What does your Honour read into that?

KIRBY J: That they trouble your inner soul.

MR HANKS: Perhaps my elocution lessons were wasted. Now, if we go from section 28(4), if we go to the approved guide, we are told in the approved guide – and here I need to take your Honours to the document that was provided by our friends as an attachment to their submission. We go to the principles of assessment. Now, we say that these principles of assessment, they are part of the criteria by reference to which an employee’s degree of permanent impairment is assessed.

KIRBY J: Which is the table that - - -

MR HANKS: I will take you to it in a moment, your Honour, but I wanted to go to page 5. That is the critical page. I would wish to go to point 3 on the page under the heading of “Double Assessment”, the second paragraph:

Where an employee suffers from more than one impairment the values are not added but are combined using the Combined Values Table. The purpose of this table is to give the total effect of all impairments, according to a formula, as a percentage value of the employee’s whole bodily system or function (see Table 14).

Now, there is no reason to suppose that that mandate exceeds the authority given to Comcare under section 28(1)(a). That is one of the criteria by reference to which the degree of permanent impairment of the employee is to be assessed.

CRENNAN J: But is that not a one injury multiple impairment?

MR HANKS: Exactly, your Honour, and that is the situation that we have here: one injury multiple impairments.

KIRBY J: You have conceded to me that there are two injuries.

MR HANKS: Yes, I have, your Honour, but it is also - - -

KIRBY J: I made a note of that, Mr Hanks.

MR HANKS: Thank you, your Honour. Your Honour, I also ensure that we add this caveat, that although it has that character it also plainly has the character of one injury, physical injury, with multiple impairments.

GUMMOW ACJ: Yes, but that is the problem of construction of the Act.

MR HANKS: Yes.

GUMMOW ACJ: Why should it be construed to favour your construction of it? You have control of it.

MR HANKS: Control of what, your Honour?

GUMMOW ACJ: This legislation.

MR HANKS: The Parliament has control of the legislation.

GUMMOW ACJ: Of course.

MR HANKS: Yes. The Parliament has spoken and we say that the way - - -

GUMMOW ACJ: It has spoken unclearly.

MR HANKS: Clearly enough, your Honour.

GUMMOW ACJ: Well, that is the point.

MR HANKS: Clearly enough. The way in which - - -

GUMMOW ACJ: It could not have spoken clearly or we would not be here, Mr Hanks.

MR HANKS: The same can be said – no, I will not go down that path, your Honour.

GUMMOW ACJ: There is this conundrum.

MR HANKS: And the conundrum, we say, has been resolved very concisely by the majority in the Full Court by pointing to the fact that the way in which “impairment” is defined in the Act is in sufficient breadth to encompass some – not all necessarily but some – ailments and some injuries. It is certainly broad enough to encompass the consequences of Mr Canute’s adjustment disorder. If that is the case, then bearing in mind the emphasis which their Honours found in the introduction of the Act, that is in the second reading speech, on the whole person approach to the assessment of impairment, it is appropriate to treat the adjustment disorder here as itself being an impairment that results from the back injury and to compensate it accordingly.

GUMMOW ACJ: And not otherwise.

MR HANKS: And not otherwise. That is so.

GUMMOW ACJ: It is the “and not otherwise” that is the problem.

MR HANKS: I appreciate that, your Honour, but we say that the focus of the Act is on assessing the degree of permanent impairment of the employee resulting from an injury. Here all the impairments, whether they be of this man’s back or of his leg or of his mind, can be traced back to their origin in the injury that he sustained in 1997. Everything has flowed from there. Everything has resulted from there.

Before I go any further I should make a couple of short points about the way in which these matters have previously been dealt with by the Federal Court in other cases. I will not take very long with this, but if I could just be permitted to refer to two authorities. A critical one is the judgment of Justice Spender in the matter of Comcare v Roser [2003] FCA 243; 127 FCR 155.

HEYDON J: Is this within your written submissions – yes, it is, on page 13.

MR HANKS: There are two critical points we think to be derived from Justice Spender’s judgment in this case. One of them is the point on which our friends rely, that separate injuries found separate liabilities under section 24. If your Honours were to look, for example, at paragraph 42 where his Honour says:

s 24(1) of the Act provides for compensation for “an injury”. If that injury results in multiple impairments, the impairment to the whole person is to be arrived at. If there is more than one injury occasioned as a result of a single event or incident, then there are separate and discrete liabilities in respect of each injury.

CALLINAN J: That is the offence, in Justice Gyles’ view, done to the language, importing “event”.

MR HANKS: It might be, your Honour, but it is, in my submission, a distraction. The fundamental point that his Honour is making is - - -

CALLINAN J: I agree it is a distraction. It certainly distracted the Full Court.

MR HANKS: We do not think so, your Honour. It is a distraction in the sense that it does not get in the way of the principle which his Honour is enunciating that where you have more than one injury – one might say simply this, where you have more than one injury that occurs at about the same time, simultaneously, you will have separate liabilities. His Honour gives that example:

Thus, if a person were made blind and lost the use of the lower right arm as the result, say, of a grenade exploding, there are two separate injuries and the person suffering them is entitled under the Act to compensation for each of them.

Remembering that we are here, if I might be so presumptuous, talking about compensation under section 24 rather than compensation under other parts of the Act.

The compensation for each injury is to be assessed by reference to the degree of impairment to the whole body that flows from each injury –

We do not cavil with that. That, we accept, is the proper approach. Similarly, we would say, as indeed was the case in Roser, where you have separate injuries that occur at different times. The employee in that case suffered a back injury in 1992 but she had also injured her knees in 1986. The question was there whether the compensation under section 24 was to be combined in the way that the majority in the Full Court in the present case said was appropriate or whether it was to be treated separately.

Justice Spender said to be treated separately. You have distinct injuries. They have no causal relationship to each other, although his Honour did not draw that distinction. He said they are separate injuries and they are to be compensated separately. Our point is that there is a third category of case not mentioned by Justice Spender in this matter but exemplified by the case before the Court: where there are two injuries but where those two injuries have a causal relationship, where one of them is the consequence of or arises out of, the result of the other injury, and that consequential injury is in fact one that can be connected to employment only through the primary injury.

CALLINAN J: Mr Hanks, I suspect that some of the State workers’ compensation legislation expresses this sort of concept explicitly, or used to.

MR HANKS: Yes.

CALLINAN J: I do not know what the situation is in New South Wales.

MR HANKS: My understanding is that it is expressed explicitly in New South Wales but not in this Act. This Act, so far as section 24 is concerned, just posits that one question: is there an impairment, permanent impairment, that results from an injury?

CALLINAN J: It would be very easy to make it clear, would it not? I know what you say. You say it is fairly clear.

MR HANKS: Yes.

CALLINAN J: Could I suggest this: it would be very easy to make it much clearer.

MR HANKS: I wish I had a dollar for every time a judge has said that to me, your Honour.

CALLINAN J: I would not mind a dollar for every time I have said it.

KIRBY J: You get plenty of dollars. Do not go complaining to us. Could we have a note on the New South Wales Act on the point that is said to make it clear?

MR HANKS: I am sure my friend and I can attend to that, your Honour. Yes, we can attend to that. Now, Justice Kirby asked me a question about the guide – it is so easy to get distracted, your Honour – table 14.1. I had taken your Honour to page 5 which we say - - -

GUMMOW ACJ: No, you have taken us to Roser. Any other case?

MR HANKS: Before I go to 14.1, your Honour, the other case is Mihajlovic [2000] FCA 285; 97 FCR 304, which is Justice Finn’s judgment. I think relevantly – as, indeed, your Honours have already been taken to this paragraph – paragraphs 20 to 24 deal with his Honour’s analysis of the operation of section 25(4).

GUMMOW ACJ: And do you adopt that?

MR HANKS: Yes, we do, precisely. I do not need to say anything more about it really, your Honour, other than to take – well, I do want to take your Honours to section 25(3) in a moment but I will deal with that separately. I should make this point about Mihajlovic, that the case was conducted on a premise which was shown by Roser to be a false premise. The premise was that where you had separate injuries that were not causally related, you combined them, and that was simply how the case was conducted in the Tribunal and it was not raised as an issue on appeal.

So far as the operation of section 25(4) is concerned, we rely on what Justice Finn said in Mihajlovic subject to this one additional matter. If you go to section 25 in the Act, we entirely accept that subsection (4) is perhaps strangely placed in section 25. Section 25, perhaps, to put it another way, carries the confusing heading “Interim payment of compensation”. That is probably the real problem. Apart from its placement in section 25, subsection (4) is very clear. It refers to:

Where Comcare has made a final assessment of the degree of permanent impairment of an employee (other than a hearing loss), no further amounts of compensation shall be payable to the employee in respect of a subsequent increase in the degree of impairment, unless the increase is 10% or more.

On its face it is very clear. It sets a threshold for increases in compensation and we say that that is the threshold for increases in compensation payable under section 24. We say that that is made very clear by subsection (3).

HEYDON J: On what date was the assessment which you say is the final assessment made?

MR HANKS: February 2000. It is not included in the appeal book.

HEYDON J: It says “AB 2.20-23” in the appellant’s chronology.

MR HANKS: What we have is the reviewable decision in the present case, which I think contains a reference to it – yes, there we are. On appeal book 2 at line 20 there is a reference to the award of compensation on 9 February 2000. Does your Honour have that? Perhaps it is 21.

HEYDON J: I do not want to be pedantic about it, but normally in working out whether something is a final assessment, you look at its terms. How can we say that without the document which was issued on 9 February?

MR HANKS: In our submission, there are only two types of assessment of section 24 compensation. One would be an interim determination as contemplated by section 25(1) and one would be a final determination. So anything that is not an interim determination – and an interim determination must be made on the written request of the employee.

GUMMOW ACJ: Yes, but 25(1) is talking about final determinations.

MR HANKS: Yes.

GUMMOW ACJ: What is the significance in the shift in language apparent in subsection (4) which is “final assessment”?

MR HANKS: I understand the question, your Honour. There is no significance, in our submission. They are synonymous for the purposes of this provision.

CRENNAN J: Justice Finn said as much, did he not?

MR HANKS: Yes, and we agree with that entirely. It is an unfortunate habit perhaps on the part of parliamentary counsel to use a different noun where one would have been preferable.

HEYDON J: Section 25(1)(a) speaks of:

a determination that an employee is suffering from a permanent impairment as a result of an injury –

subsection (4):

a final assessment of the degree of permanent impairment of an employee –

presumably as a result of that injury, yet here we have two injuries.

MR HANKS: The same problem, your Honour, with respect, and our answer is that is the problem that lies at the core of the debate this morning: two injuries or one injury? It answers both descriptions. The impairment in this case can be said to result from the back injury. It can also be said to result from the ailment which is a disease which is also an injury; namely, the adjustment disorder. In our submission, the proper way to approach it is to look at its causal origin in the back injury and to go from there.

In our submission, the argument that section 25(4) – the argument which we put that it operates in a case like this, in our submission, it was a final determination in February 2000. Now there is a new determination made by the Tribunal in late 2004. That is precisely the situation in which section 25(4) functions. Section 25(4) is not some supplement to section 25(1).

GUMMOW ACJ: Yes. I suppose you say how could 25(4) have any work to do in a 25(1) situation?

MR HANKS: That is right. The interaction between a 25(1) assessment and then an assessment of permanent impairment under section 24, that interaction is dealt with in subsection (3). There you are simply told that where that happens the person gets the difference.

GUMMOW ACJ: But it still does not get you home though, because you would still read in, would you not, to subsection (4) “permanent impairment as the result of an injury”?

MR HANKS: It must be that. It must be the permanent impairment.

GUMMOW ACJ: And we would be back in the debate about two injuries, would we not?

MR HANKS: Yes. It must be the permanent impairment referred to in section 24(1), the section that creates the liability. To turn the language around through 180 degrees, it is always a permanent impairment that results from an injury. We obviously cannot escape that. There are a couple of additional points that were put against us by our friends relating to section 25(4) which we think are not well founded. We believe that 25(4) does have the operation for which we contend and which Justice Finn found in Mihajlovic. We do contest the proposition which we think derives some support from Justice Gyles that section 25(4) has in mind assessment of certain kinds of impairment. In our submission, there is nothing in the language of 25(4) that would support that. Your Honour - - -

GUMMOW ACJ: Have you reached an end or just an intermission?

MR HANKS: I was inquiring whether your Honours might be looking for an intermission.

KIRBY J: You told the Chief Justice this would be half a day.

MR HANKS: Well, I am content to conclude in five minutes, if that would assist the Court.

GUMMOW ACJ: How long will you need in reply, Mr Grey?

MR GREY: No more than 10 minutes, your Honour – less.

GUMMOW ACJ: I think we will sit on. We will sit on until 1 o’clock.

MR HANKS: Thank you, your Honours. Now, I do need to engage with Justice Callinan about – what paragraph, was it, your Honour?

CALLINAN J: Paragraph 15.4, I think, of your submissions. Is that what you had in mind? The part of your written submissions that I put to your opponent.

MR HANKS: Thank you.

CALLINAN J: Is that what you had in mind? Really, it was your interpretation of the majority of the Full Court, I think.

MR HANKS: No, we think that is a neat - - -

CALLINAN J: It was your friend who took issue with it, not me. I was asking you - - -

MR HANKS: No, we think that is a neat way of putting how the court dealt with it. They said this person has an ailment, but if you look at the definition of “impairment”, it is sufficiently wide to encompass the consequences of that ailment and because it all can be traced back to, it results from, the back injury, that is sufficient to bring - - -

GUMMOW ACJ: Yes, but there is a non sequitur in 15.4.

MR HANKS: The non sequitur, your Honour?

GUMMOW ACJ: Yes.

MR HANKS: In my paragraph?

CALLINAN J: No, in the majority’s decision.

GUMMOW ACJ: In the majority’s decision if it is expressed accurately there, the second part of it, “and did not give rise”. Why?

MR HANKS: The proposition that appealed to the majority was that where you have a causal relationship between injuries, that they should be dealt with collectively. If the consequence of those injuries can be characterised as an impairment, the support for dealing with them collectively can be found in sections 24 and 28 in the provisions that I have taken your Honours to together with the general guiding principle on page 5 of the guide which is made binding upon decision-makers by section 28(4).

I think that is how we would defend the majority’s approach. You go to the provisions of the Act. You have regard to the need to assess degree of permanent impairment of the employee resulting from an injury. You then are told by section 28(4) that you must do that by applying the guide. The guide sets out criteria for assessing degree of permanent impairment of the employee resulting from an injury and then you go to page 5 of the guide and to that general demand that you use the combined values table where you have multiple impairments.

That is what brings it all together and that is what – and I still have not taken your Honour to table 14.1, but it is a very simple point to make about the table. It is constructed in such a way that a combination of different impairments will never exceed 100 per cent. That is the way in which it works. It applies a discount, a mathematically calculated discount, when you add different impairments together, so that 10 and 10 equals 19, for example. That is how it works. It has a lot of numbers, but it is constructed on that simple principle.

I have already made the point in answer I think to Justice Callinan, or at least in discussion with your Honour this morning, that we say there is no difference between a physical injury and a psychological injury. We have dealt with that in paragraphs 42 and 43 of our written submissions, as I am sure your Honour knows.

KIRBY J: Could you help us just a little, assuming that the decision is against you on your primary submissions, on the order that is to be made. You say that there was no appeal against Justice Hill’s orders, that therefore this Court could not, as it were, take the step that Justice Gyles favoured, but our duty under the Judiciary Act is to give the order that the court below should have made.

MR HANKS: Well, with respect, your Honour, you also might be limited by the order that the court below could have made and if there was no cross-appeal, as indeed there was none, there is a difficulty.

KIRBY J: I think you were in that case where we considered the issue of what the powers of the Full Court were and - - -

MR HANKS: Yes, the pleadings in that case - - -

KIRBY J: - - - there were two strings of view in the Full Court about what they could do before the recent amendment.

MR HANKS: I think I have taken the position, and I do not resile from it, that the Federal Court on an appeal under section 44 does have the capacity to make an order that would dispose of the matter if that is what it is asked to do if - - -

GUMMOW ACJ: It is like an order for mandamus that is absolute in the first instance.

MR HANKS: Perhaps, your Honour, yes.

GUMMOW ACJ: There is no point in sending it back.

MR HANKS: If the court finds an error of the law and there was only one result open to the tribunal of fact if it had not made the error of law then the court can substitute a decision and Justice Hill could have done that if he had formed that conclusion. We would not deny that. His Honour said, “I will not”.

KIRBY J: That is because, consistently with his view, his Honour was saying your mistake of law is you did not consider whether there was a separate, distinct psychological injury and, therefore, that is a question of fact to be determined by applying the correct law and therefore you have not yet done it and I am not going to do it.

MR HANKS: Quite. That is what his Honour said and my client appealed to the Full Court because my client took the view that it was inconsequential that the Tribunal had not done that.

KIRBY J: Yes.

MR HANKS: There was another way of looking at the problem and that other way appealed to the majority in the Full Court but the employee, Mr Canute, did not cross-appeal, did not seek any variation of that order made by Justice Hill and that is the only limiting factor that I am advancing before your Honours. Your Honours, we say that in those circumstances it is unfortunate that if your Honours were to come to the conclusion that the appeal should be allowed that we would have to say that the proper order would be to remit the matter. Now, it may not get back to the Tribunal of course.

GUMMOW ACJ: Well, exactly.

MR HANKS: Yes. But that is the proper order, in our submission.

GUMMOW ACJ: All right. Thank you. Yes, Mr Grey.

MR GREY: Just briefly, your Honour - - -

GUMMOW ACJ: Do you want to say anything about what Mr Hanks has just been putting to us about your absence of cross-appeal in the Full Court?

MR GREY: It is true that we did not cross-appeal. I would simply submit, your Honour, that on the basis of how the Full Court approached it, that there was only effectively one conclusion that could have been reached.

KIRBY J: I am not so sure about that. It may be that a factual decision-maker would say it is true that it is open to be a separate injury but we think it is really just an impairment of the first injury.

MR GREY: That comes to the question of whether if you can identify a disorder which answers the description under the DSM 4 - - -

KIRBY J: There is still a factual decision to be made.

MR GREY: Yes, although, your Honour, the Full Court said the nature of the diagnosis could not be interpreted any other way, in effect. They said it was plainly an injury, that is, once you get to the stage of saying an adjustment disorder found under DSM 4 meets a certain criteria under that - - -

KIRBY J: That is why it may go away, but if you are looking at it as a matter of strictness, because you did not appeal, it just seems it is a lot to ask us to do what you did not appeal against Justice Hill.

MR GREY: Your Honour, I do not have any more to say about it than – I understand.

GUMMOW ACJ: What else do you want to say in reply?

MR GREY: The one point I wanted to make, your Honour, about the important thing the way the Full Court approached the adjustment disorder was - - -

GUMMOW ACJ: Do you want to say anything about Justice Spender’s decision?

MR GREY: Only that his Honour - - -

GUMMOW ACJ: It said that that was different because there was not the causal connection between the two injuries as there is here.

MR GREY: What we say about that is there is nothing in the Act that makes any distinction between the causal connection. Perhaps I could take your Honours to what the New South Wales Act says because I did put it on my list of authorities. Your Honours should have it.

GUMMOW ACJ: Do we have it?

MR GREY: Yes.

KIRBY J: Just send that in to us.

GUMMOW ACJ: I think it is going to come in - - -

MR GREY: Your Honours, I did ask for it to be put on the list so your Honours should have the Acts in front - - -

GUMMOW ACJ: I know but you should not really be dealing with it in reply without us having a reply from Mr Hanks.

KIRBY J: I think you did mention it in-chief.

MR GREY: I did mention it. I was going to take your Honours to it but - - -

GUMMOW ACJ: It can come in in 14 days in a joint note between you. That would be the best way to do it.

MR GREY: Thank you, your Honour, we will do that. What I was going to say about the adjustment disorder is, if one looks at table 5.1, the logical consequence of the Full Court’s decision is it treated the adjustment disorder itself as an impairment. If that were an impairment one would have to find in table 5.1, because the Act requires the guide to be applied, one would have to find a description of “adjustment disorder” with a number next to it. It just cannot operate like that. It does not operate like that. The guide requires that you look at these criteria that are set out in table 5.1, none of which says “adjustment disorder”. In other words, adjustment disorder cannot fit as an impairment because it does not answer the description. That is the simple point about that, your Honour.

We say that if the whole person impairment approach that my friend contends for was such an overarching, an overreaching requirement of this Act, on its proper construction the Act would require all such impairments to be combined and it clearly does not do that. My friend says the decision of Justice Spender in Roser is correct insofar as he talks about separate injuries not being combined. That demonstrates that the Act itself does not say that one always combines impairments in every situation. They do not. They are combined only within the rubric of the consequences of a single injury and, again to re-emphasise, the reason why we say this impairment does not fit under the physical injuries because it is an impairment which must be associated with a mental injury. It cannot be associated solely with a physical injury.

As far as the final assessment issue is concerned, we say there was nothing and is nothing to suggest that any final assessment was being made in this case. A final assessment must have some character about it which demonstrates finality and there is no indication that Comcare did anything other in February 2000 than simply decide what application was before it about the physical injury. It was saying nothing about psychological injury or any other impairment for that matter.

HEYDON J: The way things are, matters favour you, but I just do not see how one can confidently say one way or the other that it was a final assessment until one has seen it.

MR GREY: I understand what your Honour says about that.

HEYDON J: But since all we have is a few lines on page 2 of the appeal book, matters favour you.

MR GREY: All I would say, your Honour, is there never has been in this case from the very first case in the Tribunal any assertion that the terms of the original determination in 2000 declared that it was a final assessment for the purposes of section 25.

GUMMOW ACJ: Where do we see the text, if at all?

MR GREY: Of that original determination?

GUMMOW ACJ: Yes.

MR GREY: No, it is not in the appeal book, your Honour. If it would assist your Honours, my friend and I could provide a copy.

GUMMOW ACJ: Was it in the record in the Federal Court?

MR GREY: It is in the record in the Federal Court.

GUMMOW ACJ: We should have it, I think.

MR GREY: All right, your Honours, we will make sure the Court gets it. So we say that one does not find any assertion that this was a final assessment and if there is no assertion it cannot be treated as such or should not be treated as such. Your Honours, those are my additional submissions.

CALLINAN J: Is there anything else about its character that might suggest it is final or is intended to be final?

MR GREY: No.

CALLINAN J: In terms of the quantum or - - -

MR GREY: No, it simply dealt with the back and the leg because that is all that was being asked for at that time.

CALLINAN J: Non-economic loss?

MR GREY: It dealt with non-economic loss in relation to the back and the leg.

CALLINAN J: Is that not an indication that it was final?

MR GREY: No, your Honour, it only is an indication that there was pain and suffering associated with that particular impairment which was assessable at that time according to the questionnaire set out in Part B.

CALLINAN J: I noticed Mr Hanks nodded when I suggested that.

MR GREY: I am sure he would but, your Honour, we do not see any character of finality arising out of that, because the Part B assessment does not call for the application of a combined value table.

CALLINAN J: It was a lump sum payment, was it?

MR GREY: Yes.

CALLINAN J: Lump sum payments are different from periodic payments. You would hardly be making a lump sum payment unless you were relatively confident that you could make it in respect of what was reasonably in prospect as well as what had happened in the past which would suggest finality.

MR GREY: You could make it reasonably in prospect a final – what one could call as assessment, not a final - - -

CALLINAN J: You would have to limit it, would you not? You would say, well, look, this is for pain and suffering, non-economic loss up until 5 November 2010, and we will see what happens after that. The mere fact that it has no express temporal limitation suggests that it is final, does it not?

MR GREY: No, because it is only dealing with the claim that was made. The claim was at that stage for that injury which the applicant was aware he had only.

CALLINAN J: That brings you back to the argument, but no doubt Comcare thought it was making a final assessment?

MR GREY: Again, we can provide your Honours with the terms, and the terms do not say that – I am fairly confident it does not say that, but I cannot take it any further, your Honour, without looking at the terms of the individual determination. As the Court pleases.

GUMMOW ACJ: Thank you, Mr Grey. That determination should come in within 14 days and if either of you wants to say anything about it do so at that time, together with the joint note on the New South Wales Act also within 14 days. We thank counsel for their assistance and we will reserve our decision and we will adjourn until 10.15 am tomorrow morning.

AT 1.02 PM THE MATTER WAS ADJOURNED