Fellowes v Military Rehabilitation and Compensation Commission [2009] HCATrans 148 (22 June 2009)

Last Updated: 25 June 2009

[2009] HCATrans 148

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B8 of 2009

B e t w e e n -

ROBYN CHRISTINE FELLOWES

Appellant

and

MILITARY REHABILITATION AND COMPENSATION COMMISSION

Respondent

HAYNE J
HEYDON J
CRENNAN J
KIEFEL J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON MONDAY, 22 JUNE 2009, AT 2.14 PM

Copyright in the High Court of Australia

MR P.J. HANKS, QC: Your Honours , I appear with my learned friend, MR R.F. KING-SCOTT, for the appellant. (instructed by Slater & Gordon Lawyers)

MR T.M. HOWE, QC: May it please the Court, I appear with my learned friend, MS L.A. WALKER, for the respondent. (instructed by Australian Government Solicitor - Brisbane)

HAYNE J: Yes, Mr Hanks.

MR HANKS: Your Honours will have written submissions from each party, and our reply. As I understand it there are some authorities that have been filed by both parties. If it would suit the Court’s convenience I would go directly to the relevant provisions of the Safety, Rehabilitation and Compensation Act, which we invite to be called by its acronym, the SRC Act. Your Honours will find that at annexure B behind our principal submissions. It is probably of immediate significance if I go to section 24, because that is what this case is about. I will take your Honours back to some of the definitions very quickly.

Your Honours will see that there is a liability established by section 24(1). It is a liability in Comcare - although for the purposes of this matter we substitute the name of the respondent to the appeal for Comcare - a liability to pay compensation where an injury to an employee, such as the appellant, results in a permanent impairment. Then there is a liability to pay compensation to the employee in respect of the injury.

Your Honours will see that there is a series of subsections which work together to identify the amount of that compensation. Of those, the principal subsection is subsection (5), which imposes a duty on Comcare, here “the Commission” to:

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

Once that duty is discharged, once that determination is made, then I think the term has been used “cascading provisions” of subsections (4) and (3) identify the amount of compensation. So the respondent determines the degree of permanent impairment out of the guide in percentage terms. That then tells us the percentage of the maximum amount and there is a maximum amount prescribed in subsection (9) of $80,000 which is, as I understand it, is indexed. That determines the amount of compensation. If it is 10 per cent then it is 10 per cent of $80,000; if it is 30 per cent, it is 30 per cent of $80,000.

To understand some of the aspects of the duty cast on the respondent one goes back to the definition section in section 4. I will take your Honours first, if I might, to “injury”. Relevantly, it will be paragraph (b) of the definition of “injury” here. It is:

an injury (other than a disease)

sometimes described loosely as a “frank injury” –

suffered by an employee, being a physical or mental injury arising out of, or in the course of, the employee’s employment –

So there is possibly a qualitative and a temporal relationship. Either would be sufficient to constitute it an injury for the purposes of the Act. It is common ground, and indeed the findings of fact made by the Tribunal are that in the present case the appellant initially suffered an injury of that kind to her left knee and then suffered, a year later, an injury of that kind to her right knee. We are also told that “impairment” has a particular meaning. That is defined as:

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.

We also have findings, if I might put it that way, here that in respect of the injury – and this is more by way of background – to the left knee there was such an impairment. It is permanent. It is a loss, a use or loss of a function of the left knee. We have findings that there is such an impairment, a permanent impairment. I have not taken your Honours yet to the definition of “permanent” but your Honours can see that is also defined: “likely to continue indefinitely”. There is nothing surprising or challenging about that definition. We have findings in relation to the right knee that the injury has resulted in a permanent impairment – a loss of the use or loss of function of the right knee.

So having cleared, as it were, those basic parts of the problem that was presented to in this case the Tribunal, the Administrative Appeals Tribunal – if I might, I will come back and refer the Court to section 28. Your Honours will see that it deals with the authority of Comcare to prepare the guide, which is to set out – and we would particularly draw your Honours’ attention to paragraph (a):

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

Now, it will, as your Honours appreciate, no doubt, be a central part of our argument to the Court that that is all that the guide can do. It can only identify or set out criteria by reference to which the degree of permanent impairment resulting from an injury shall be determined. It performs, and can perform, no function in identifying whether there is a permanent impairment and, if so, what is the nature of that permanent impairment.

I do not need to take your Honours to any of the other provisions of the Act at this stage. There are other provisions that we have referred to in our submissions, but these are the central provisions. These are the provisions that identify the respondent’s liability to pay compensation; identify the way in which a quantum of that liability is to be determined, calculated, and state in our submission quite clearly what the role of the guide in that process is to be.

Your Honours may care to look at that. Perhaps I can take your Honours to the guide, which is also contained in annexure B to our submissions. Can I remind your Honours that this is a form of delegated legislation; it is made under the authority conferred by section 28(1). It is quite a long document, but we are only concerned with particular parts of it. We are concerned first of all with the principles of assessment which start on page 3 of the guide. We are told, not surprisingly, that “impairment” has a particular meaning, and that is the meaning given by the Act, right at the top of page 3. Then a little further down, in the first paragraph:

Throughout this guide emphasis is given to loss of function as a basis of assessment of impairment and as far as possible objective criteria have been used.

Impairment is measured against its effect on personal efficiency in the ‘activities of daily living’ in comparison with a normal healthy person.

To that end there is a series of tables in the guide which look at the effect of injuries and the effect of impairment on particular bodily systems. If I take your Honours to page 5 of the guide your Honours will have noted that the very first paragraph, under the heading “Combined impairments” has loomed quite large in the debate between the parties and in the decision of the Tribunal and the judgment of two members of the Full Court of the Federal Court in this matter. We are told that:

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.

Then the critical phrase which was, as we noted in our principal submissions, underlined in the Tribunal’s reasons when they quoted this paragraph:

Where two or more injuries give rise to the same impairment a single rating only should be given.

Then there is another warning under the heading of “Double Assessment” as your Honours will see, although in our submission, it would have had no part to play in the assessment in this case:

The possibility of double assessment for a single loss of function must be guarded against. For example –

and the example is given as to what is the evil that we have been warned against –

it would be inappropriate to assess a lower limb amputation by reference to both the amputation table (9.3) and the lower extremity table (9.2)

Could we draw your Honours’ attention to three tables which are in Chapter 9, commencing on page 30 of the guide. Chapter 9 deals with the musculo-skeletal system and I wanted to draw your Honours’ attention to table 9.2, “Lower Extremity”, and your Honours can see that there is a way of calculating the degree of permanent impairment by reference to reductions in the range of movement in the relevant limb, or joint I should say, because each of these addresses a person’s legs in rather Victorian language - “lower extremity”.

Now, if I then turn, your Honours, to table 9.5 which was the table applied here – “Limb Function - Lower Limb”, and there are five gradations of the degree of permanent impairment:

Can rise to standing position and walk BUT has difficulty with grades and steps -

That would attract an impairment assessment of 10. To attract a higher impairment assessment for the limb function of the lower limb – I would ask your Honours to note that the singular is used here, not the plural. To attract a higher rating one would have to move to the description:

Can rise to standing position and walk but has difficulty with grades, steps and distances –

a further element. While we have that page open, could I ask your Honours to look at table 9.4 which adopts a similar approach for the limb function of the upper limb, and your Honours can see that there is a series of descriptions of limits on the function of the upper limb.

CRENNAN J: They are all by reference to the limb rather than by reference to actions.

MR HANKS: They are indeed, your Honour. They are by reference to the limb, as opposed to a pair of limbs. That is a point that we would make, your Honour. At this point I do not wish to take your Honours to any other aspects of the guide. I think the other aspects are probably irrelevant to the arguments that either party wishes to make, but if our friends have another aspect that they believe is helpful, no doubt they will take your Honours to it. What I propose to do, if it suits the Court’s convenience, is to go immediately to the High Court’s judgment in Canute.

HAYNE J: With a view to demonstrating what, Mr Hanks?

MR HANKS: With a view to demonstrating, your Honour, that there is a principled approach to section 24, and a principled approach to the use of the guide.

BELL J: Before you take us to Canute, can I just ask one matter arising out of table 14? There is reference in the submissions to the circumstance that table 9.5 does not contemplate the combined values chart in table 14. Do we find elsewhere a reference to it, and how does the combined values chart work?

MR HANKS: The other reference that – I do not think we are making this reference, your Honour, but - - -

BELL J: I do not believe you did, I am just trying to understand the framework.

MR HANKS: Yes, I will take you back to table 9.2 if I might. Your Honour will see at the bottom of page 31:

Values are for one joint only.

BELL J: Yes, I see.

MR HANKS: We think this is how it would work. If a person suffers an injury, as a result of which there is permanent impairment, in two limbs measuring – it is a little difficult to hypothesise this as a real situation. Single injury impairment in two legs, perhaps a limited range of movement of say, less than half the normal range of movement in the ankle and - - -

HAYNE J: With a crushing injury to the knee and ankle is the example to take, is it not, where ankle and knee are both - - -

MR HANKS: Yes, I think it is, your Honour. In different legs.

HAYNE J: No, in the one leg. No?

MR HANKS: Yes, certainly, your Honour, I am sorry, in the one leg.

HAYNE J: Bad crushing injury, knee involved, ankle involved, two joints.

MR HANKS: One worth 10 and the other worth 20, let us assume, then one does not provide a separate amount of compensation for each impairment, but according to this one goes to the combined values table - and we have not included that in the material that we have made available to the Court, but that provides a formula which I think verges on the geometric, rather than the strictly arithmetical, and it provides a means of combining two impairment ratings to produce an overall impairment so that, in the example that I gave, I think I said 10 and 20, when 10 and 20 - - -

HAYNE J: You have to do a 20 and 10. You have to have the larger digit first, do you not?

MR HANKS: You are absolutely right, your Honour.

HAYNE J: If you go to page 55 of the chart - - -

MR HANKS: Equals 28.

CRENNAN J: So you get something lowered - the lower value than the simple addition of the two. That is how it works?

MR HANKS: Indeed.

HAYNE J: A plus B times 1 minus A is the formula.

MR HANKS: It is the formula, your Honour. It did not immediately spring to mind, though, in order to provide the answer. There is no such reference in table 9.5, but if I just go back, if I might, to the terms of the reference at the bottom of table 9.2, we would say that applies where there is a single injury - that is the purpose of this - a single injury which results in multiple impairments and that is not our case. Our case is where there have been two injuries resulting, we say, in multiple impairments to different parts of the body, not to the same leg, to take the example that Justice Hayne offered.

Now, we say that there are some basic points that were made by this Court in Canute and, of course, we do accept, obviously, the point made by Justice Moore in the court below, and indeed by the other members of the court, Justices French and Lindgren, that the facts in Canute were not the same as the facts in this case. As Justice Moore said, they are only similar at a high level of abstraction in the sense that both cases concerned two injuries. To remind your Honours, in Canute there was an injury to Mr Canute’s back, to his spine, and then that was followed consequentially by a psychiatric injury.

In the present case, of course, there are two distinct physical injuries, not linked in any causal sense in the way that the injuries were linked in Canute, but we would entirely embrace the point made by Justice Moore that the dissimilarity should not distract attention from the reasoning of the court when it analysed the operation, in particular, of section 24 of the SRC Act. If I could just remind your Honours, going to the High Court’s judgment in Canute v Comcare [2006] HCA 47; 226 CLR 535 and I will take your Honours immediately to paragraph 8:

The concept of “an injury” is a term of pivotal importance in the structure of the Act –

their Honours said. There is a passage that commences on the fourth line in paragraph 8:

Further, Comcare’s liability pursuant to s 24(1) also arises with respect to “an injury” which results in “a permanent impairment”.

One starts with the concept of injury and the Court stressed in paragraph 10 that:

the Act does not oblige Comcare to pay compensation in respect of an employee’s impairment; it is liable to pay compensation in respect of “the injury”.

Then their Honours noted that:

Section 24(5) of the Act is expressed in terms of “the degree of permanent impairment of the employee”.

In our submission, that is a critical aspect of section 24 that one needs to keep in mind. In paragraph 12, their Honours pointed out that:

Content is given to the expression “degree of permanent impairment of the employee” by reference to the . . . (the Guide), to which s 24(5) refers. The Guide is subordinate legislation –

In paragraph 14 their Honours stress that:

it is important to remember that recourse to the criteria and methodologies set out in the Guide is only necessary once the key statutory criterion of the occurrence of “an injury” (which resulted in at least one permanent impairment) has been fulfilled. The Guide is to be approached through the prism of each ‘injury”.

If I could just perhaps add a footnote here, your Honours. That reference in paragraph 14 to recourse to the guide being “only necessary once the key statutory criterion of the occurrence of ‘an injury’ (which resulted in at least one permanent impairment) has been fulfilled”, as we understand it that was the paragraph on which Justice Moore based his formulation of the three sequential questions that one must ask here in order to identify what compensation is payable in respect of the injury that has resulted in a permanent impairment.

Those are the three questions to which we have drawn attention in our written submissions, but three questions essentially, are found in paragraph 47 of the Full Court’s judgment at appeal book 79. Your Honours may recall that Justice Moore said:

It seems to me that this passage –

which is paragraph 14 in Canute –

should be taken to indicate that the Act requires a series of questions to be asked and answered. The first is whether the employee has suffered an “injury” . . . the further question is whether a permanent impairment has resulted from that “injury”. An affirmative answer to that question then leads to the enquiry concerning the “degree of permanent impairment” contemplated by s 24(5) –

and his Honour acknowledged that in paragraph 6 of Canute this Court described that subsection as the “‘central provision’ of the legislative scheme”. If I could then perhaps just draw your Honours’ attention to paragraph 15 where their Honours constituting the court in Canute said:

The scheme of the Act proceeds in this way from the occurrence of “an injury”, in the defined sense. As previously remarked, the Act assumes that more than one “injury” may occur.

Their Honours make an observation there about this concept of “whole person” impairment which they dismissed as being a controlling concept. I want then to take your Honours, if I could, to paragraph 37 in Canute. Your Honours can see that the Court was there dealing with a particular submission supporting the position taken by the majority in Canute in the Full Federal Court about a particular conflict, and if there was such a conflict, this Court said:–

the approach by the Full Court majority to resolving that supposed conflict reversed the hierarchy of the provisions of the Act.

Your Honours recognised a hierarchy, and as we understand it, the way the Court saw it in Canute was that it was –

the occurrence of “an injury” –

I am now reading about the seventh line of paragraph 37 –

which both actuates and defines the ambit of Comcare’s duty pursuant to s 24 of the Act.

If I might interpolate, your Honours must be referring to section 24(5). That is where the duty is found, and that is plain from the next sentence:

Once that duty has been performed, sub-ss (3) and (4) of s 24 operate, in a self-executing way, to quantify the amount of compensation payable by Comcare.

Then there is a reference again to this concept of “whole person impairment”, and the Court said, that is only adopted in the Act –

with respect to permanent impairments resulting from each “injury” . . . The statutory criterion of an “injury” is antecedent to the concept of “whole person” impairment, not the other way around.

I have already taken your Honours to the three questions that Justice Moore derived from the reasoning of the Court in Canute. When the Tribunal came to deal with this matter, it did not have the benefit, of course, of Justice Moore’s exposition – a chronological impossibility – but it did have the advantage of this Court’s judgment and of the judgment of the Full Court of the Federal Court in the matter of Comcare v Van Grinsven 117 FCR 169, which, as I understand it, is in the bundle of authorities that our friends have filed.

The relevance of this case undoubtedly is that the Full Court was dealing with a problem which is on all fours with the problem that was before this Court, dealing with an employee who suffered an injury to his left knee one year and a year later an injury to his right knee. The question was, if one comes to determine whether the permanent impairment resulting from each injury is compensable, and one is taken to table 9.5 to determine the degree of impairment, does the employee qualify for compensation under table 9.5 for each permanent – in respect of each injury, because those are the terms that the Act requires us to use. An injury to each knee suffered at different times, a year apart, we have permanent impairment resulting from each injury, is Comcare under a liability to pay compensation under section 24 in respect of each injury, when the degree of impairment resulting from each injury is assessed under table 9.5?

HAYNE J: Now, the competition between views either is, or at least includes, a competition that can be identified from page 3 of the guide, I suspect. One view which I understand to be the view you contend for is that an injury results in a permanent impairment in the terms of 24(1). If there is an impairment of function of a limb, in the first case the left limb, subsequently the right limb, the competing view, I think, might emphasise the second paragraph at page 3 of the guide where the impairment is identified as being the degree of impairment of capacity to deal, in effect, with “activities of daily living”. Now, is that the competition in views that is in issue in this case?

MR HANKS: Possibly not, your Honour. Perhaps I should have said possibly, rather than possibly not – but if it is, your Honour, it would be as it were framing the question in terms which we say the Act does not permit. It would be using, if I might put it this way, your Honour, it would be using the guide to control, to constrict the recognition of the impairment resulting from each injury. That is not its function. The only function it has is to determine the degree of permanent impairment, which has already been established, that results from each injury.

HAYNE J: Well, the statutory question that is presented is a question about the words “results in a permanent impairment” where they appear in 24(1), is it not?

MR HANKS: It is, your Honour, with the gateway to the guide being effectively section 24(5). But you only get to the gateway once you have identified an injury and once you have identified a resulting permanent impairment.

HAYNE J: The question is impairment of what, impairment of the function of a limb in this case, or is it impairment of the person confronting activities of daily living?

MR HANKS: Well, again we go back to the definition of “impairment”, if I might, your Honour, because we think that provides the answer to that question:

impairment means the loss, the loss of the use, or the damage or malfunction, of any part of the body -

Now, it goes on to say “or of any bodily system or function”, but with respect, if we have a diminished use of the left leg and a diminished use of the right leg, then in each case we have an impairment of a part of the body and the next question is, is that permanent? Of course, having assumed already that the impairment we have identified has resulted from each injury – the 1986 and 1987 injuries - assuming all of that, then we are taken, after we have settled those matters, to section 24(5) and into the guide and we use the guide for one purpose only. What is the degree of that impairment?

HAYNE J: Now, you were taking us, I think, to Van Grinsven.

MR HANKS: Yes I was, your Honour, because it is plainly influential as far as the Tribunal was concerned, and as far as perhaps the plurality in the Full Federal Court, Justices French and Lindgren. Your Honours will recall that Justice Moore thought it was wrong, or at least it had been discredited by Canute. In Van Grinsven this is how, as we understand it, the Full Court dealt with the matter.

Turning now to page 175 in the report, because that is where we have reasoning on appeal, in our view the question is one of construction of the guide read in context. So then we have a number of references to the guide. Over the page their Honours refer to table 9.5 adopting a “different approach” and as enabling:

an assessment to be made of the level of impairment in the performance of various functions, such as whether the injured person can walk or stand and to what extent.

Now, I do not think I need to take your Honours to paragraph 15. Perhaps we will just emphasise that what the Full Court is doing in this case is treating the guide as answering the question. Then paragraph 16:

It is clear that for the purpose of Table 9.5 the respondent does not suffer from more than one impairment. He may suffer from two knee injuries, but for the purpose of Table 9.5, those only give rise to the one impairment – that is, “Can rise to standing position –

et cetera. The impairment – or what we could say – the degree of impairment although the Full Court says the impairment that attracts a particular rating, I think of 20.

In our submission, there is a fundamental error here in using the provisions of the guide to identify the impairment that has resulted from the injury, rather than use it for the purpose for which it was made and, indeed, one might say use it for the purpose for which it can only be made under section 28(1) to prescribe criteria by reference to which the degree of permanent impairment can be assessed.

Now, I do want to take your Honours to some observations that the Full Court made about the judgment in Campbell and that is on the following page, 177. Your Honours may recall that the sequence of events - the history was a tribunal some years before had taken the view, for which we now contend, about the operation of section 24, injuries to two lower limbs and had concluded that, as it were, two items of compensation could be paid under section 24 for each injury resulting in different permanent impairments. That had been appealed to the Federal Court and the Federal Court had dismissed the appeal and in dismissing the appeal had said – and could I draw your Honours attention to – we are still in Van Grinsven – paragraph 20 where his Honour had said:

the guide is . . . not intended to be a rod for the purpose of imposing limitations and restrictions on injured persons who come within its framework, but a means of facilitating the calculation of their disability and therefore the compensation to which they become entitled by the various factual findings of the Tribunal.

That is taken from paragraph 4 of the judgment in Campbell and, as we understand it, the Full Court was critical of that line of reasoning. If one goes to paragraph 21, your Honours can see that their criticism turned on the omission of the judge to refer to or:

rely on the statement in the Guide that where two or more injuries give rise to the same impairment a single rating only should be given.

Plainly, the Full Court in Van Grinsven saw that as important, as significant. I had already taken your Honours to that statement in the guide. It is towards the top of page 5 of the guide.

What is clear, we would say, is the Full Court in Van Grinsven saw the guide as effectively controlling the recognition of the existence of an impairment, and in particular they saw table 9.5 as directing that where there were distinct injuries to each of the person’s two legs, each of those injuries resulting in a permanent impairment, when one came to assess the degree of permanent impairment under table 9.5, one was obliged to decide that the impairment was the same, identical. There was only one impairment. In our submission that does allow the guide to control the whole process in an upside-down way. It reverses the hierarchy, if I might revert to the – I think it is fair to describe it as a metaphor – used in Canute.

Now, your Honours will have seen from the Tribunal’s decision that there were two, we would say, considerations that persuaded the Tribunal in the present case that where you had distinct injuries to the two legs of the present appellant, two knees, table 9.5 constricted the decision-maker and required the decision-maker to conclude that the two separate injuries had resulted in a single impairment.

Now, that is a conclusion to which the Tribunal was driven by reading, as we understand it, the statement on page 5 of the guide to which the Full Court in Van Grinsven referred, to which I have just taken your Honours:

Where two or more injuries give rise to the same impairment a single rating only should be given -.

and the decision in Van Grinsven itself. The Tribunal concluded that this Court’s judgment in Canute did not discredit Van Grinsven and that it was bound to follow Van Grinsven. But I would ask your Honours just to look quickly – or as quickly as your Honours care to – page 53 of the appeal book. In paragraph 32 the learned Deputy President did not accept that Canute should be regarded as having impliedly overruled Van Grinsven, and the Deputy President, speaking of the case before the Tribunal says:

The decision under review recognizes that there are separate and distinct injuries that Ms Fellowes has sustained. But, unlike the situation in Canute those separate injuries do not result in separate and distinct impairments.

It is plain, we would say, that the reason why the Tribunal made that point at the end of paragraph 32 was its understanding that table 9.5 in the guide compelled that result.

HAYNE J: Well, maybe, but the impairment relevantly identified is that at the end of 33. One impairment identified as:

the ability to rise to a standing position and to walk but difficulty with grades and steps.

That requires then comparison with and an attempt to fit into the definition of “impairment” in the Act.

MR HANKS: That is the impairment resulting from the injury to the right knee with which the Tribunal was concerned, your Honour.

HAYNE J: But how does that sit with the definition of “impairment”? Impairment relevantly to this case is the damage of a part of the body, is it not?

MR HANKS: It is indeed. It is. It is the loss of the use of a part of the body.

HAYNE J: It is loss of use, is it?

MR HANKS: Yes, loss of use, it can be or a loss of function. That is the definition of “impairment”, your Honour. The damage one might think is the injury itself. It is the resulting impairment with which we are concerned.

HAYNE J: But the loss of use of the part of the body is one limb, it is not the capacity to walk.

MR HANKS: Indeed, that is right, your Honour. It is the particular function for which that one limb can be used. It can be used for rising from a seated position to a standing position. It can be used for walking. It can be used for climbing steps, descending steps. Perhaps that is a species of the genus walking, but as far as table 9.5 is concerned they are distinct functions. Having used table 9.5 to come to the conclusion that there was only one impairment, if we could just footnote that and say what the Tribunal should have said was that the degree of impairment resulting from the injury to the right knee is of a similar kind to the degree of impairment resulting from the injury to the left knee. The Tribunal, in our submission, blended or confused the questions that it should be answering.

Then in paragraph 34 the Tribunal goes directly to the statement on page 5 of the guide. Going, if I might your Honours, to the end of paragraph 34:

the Guide directs explicitly that two or more separate injuries that give rise to the same impairment result in the single rating –

Now, in our submission, the Tribunal has fallen into the error of using the guide for a function for which it is not designed and which it cannot serve.

If we could then ask your Honours to look at the judgment of the Full Federal Court from which this appeal is brought. I make this point about the joint judgment of Justices French and Lindgren first, if I might. It is a respectful criticism of the approach of their Honours. There are some brief references to the judgment of this Court in Canute. For example, in paragraph 29, the two judges of the Federal Court noted that:

the High Court emphasised (at [10]) that the Act does not create a liability to pay compensation in respect of “impairment” but in respect of “injury” -

Then there are some other matters that are not immediately relevant, your Honours, but neither of their Honours – their Honours jointly did not develop that point. Then a little later in paragraph 31, their Honours referred to Canute again:

the same workplace incident gave rise to two separate injuries, the back injury and the “disease-injury” –

that was a psychological injury –

each giving rise to a separate impairment . . . The circumstances of the case explain why their Honours emphasised that the Act created a liability to pay compensation in respect of injury, not impairment. Canute does not dictate the result in the present case.

As far as we can see, that exhausts the consideration that was given to the High Court’s reasoning in Canute. For example, there is no reference to what we would, with respect, describe as critical paragraphs of the reasoning, paragraph 14 in Canute and paragraph 37 to which I have already taken your Honours.

It may be that the reasons given by their Honours were premised on the factual differences between the problem in Canute and our problem. In our submission, those factual differences should not distract from the relevance of this Court’s reasons in Canute, relevance to the proper interaction of section 24, on the one hand, and the guide on the other.

Justices French and Lindgren did pay particular regard, as indeed the Tribunal had done, and indeed as the Full Court had done in Van Grinsven, to the statement on page 3 of the guide. This is apparent from paragraph 40, which is on page 77 of the appeal book. Your Honours can see that - - -

HEYDON J: You mean page 5 of the guide I think, you said 3.

MR HANKS: Paragraph 40, page 77.

HEYDON J: Yes, this is with reference to page 5 of the guide, you said page 3.

MR HANKS: Did I? I apologise, your Honour, but thank you:

The following statement in the Guide therefore applied -

To understand that, of course, we will have to look at the preceding sentence and the preceding sentence is:

In terms of the Guide, in particular in terms of Table 9.5, the classification of the degree of Ms Fellowes’s permanent impairment was the same following the injury to her right knee as it had been before it.

Therefore, it seems, their Honours concluded that the two knee injuries suffered by Ms Fellowes gave rise to the same impairment in terms of table 9.5. One can see again, if I might put it this way, the confusion between the recognition of the impairment and the identification of the degree of that impairment. Their Honours have used the guide to constrain or constrict the recognition of the impairment, the loss of the use of a part of the body that has resulted from the second injury.

HAYNE J: Does it follow from the reasoning expressed in paragraph 33 of the Full Court’s reasons, or the conclusion there expressed, that existing permanent impairment did not result from the second injury?

MR HANKS: Yes.

HAYNE J: Is it a necessary premise for that conclusion, is perhaps a more accurate way of putting the question, that 24(1) was not engaged in this case because the second injury to the employee did not result in a permanent impairment. If that is not the premise for the conclusion - - -

MR HANKS: Yes.

HAYNE J: - - - it seems that there is a different understanding of the notion resulting from “permanent impairment” expressed in paragraph 33, by reference to 24(5) from the understanding that it is to be given in 24(1).

MR HANKS: That might be, as it were, the subtext, your Honour. With respect, it is not explicit. The reasoning is not exposed, if that were the approach their Honours were taking. If it were exposed we would have some confidence in criticising it. We would not accept that that is an appropriate way in which to go about the task that section 24 sets.

HAYNE J: But it is a construction that would lead, I suspect, you would say, to some difficulty in reading the definition of “impairment” in the application to the facts of this case in its operation in 24(1).

MR HANKS: Indeed, your Honour.

HAYNE J: The point I am seeking to explore with you is not necessarily intended to harm your case. It may, it may not, I just do not know.

MR HANKS: Yes, your Honour. There is an open door which I will walk through.

HAYNE J: There may be a hole the other side, Mr Hanks. That is the danger.

MR HANKS: There may be, your Honour. I have travelled this door before. There is plainly, as this Court said in Canute, there is a hierarchy to these provisions. You start with section 24(1) and you ask has the injury resulted in a permanent impairment? Has it resulted, to use the terms of the definition, has it resulted in the loss of the use – we would say diminished use would be sufficient, it does not have to be complete loss – of a part of the body.

Here we have an injury to the right leg, it has a complicated name, it affects the right knee. The question is whether that has resulted in a loss of the use or a loss of function in that part of the body. The answer given to that by the tribunal of fact, the AAT, is yes, it has. We see nothing in the reasons of the plurality in the Full Federal Court that challenges that finding of fact. One then goes on to determine what compensation should be paid for that injury, or in respect of that injury, to use the terms in section 24(1). That is where one goes to section 24(5) and to the guide in order to identify the degree of permanent impairment resulting from the injury.

With respect, your Honour, the reasoning in paragraph 33 might be apposite if, for example, the appellant was already experiencing a degree of permanent impairment in the right leg. Then it would be appropriate, perhaps, to make some allowance for that when determining what was the degree of permanent impairment that had resulted from this injury, the 1987 injury. But it has no role to play, it is irrelevant where the existing impairment is an impairment resulting from the injury to the left leg. If that was, in a sense, the way their Honours were seeking to find a solution, we would say that was erroneous. With complete respect, we would endorse the reasoning of his Honour Justice Moore.

I had already taken your Honours to the three questions that Justice Moore identified as emerging from paragraph 14 of this Court’s reasons in Canute. I have already taken your Honours to paragraph 47 on appeal book 79. If we might, we would highlight very briefly paragraph 44 on page 78 where his Honour agreed that it is difficult to reconcile Van Grinsven with Canute.

In the following paragraph his Honour acknowledges the factual differences and I have taken this Court effectively to that part of Justice Moore’s judgment almost at the beginning of our submissions. His Honour makes, we would say, a powerful point when his Honour says that those dissimilarities should not distract attention from this Court’s reasoning in Canute. Could I ask your Honours to look at paragraph 48 where Justice Moore says:

The Guide is a construct authorised by s 28 –

of the SRC Act. Your Honours will understand what lies behind that because we have made that submission that section 28(1) authorises Comcare to make the guide for a particular purpose. As Justice Moore said, it can operate and only operate to set out the criteria to determine the degree of a permanent impairment. It cannot operate, he says, to deny the existence of a permanent impairment. Now, in paragraph 49, his Honour makes the point – I wanted to read, if I might, from the third line:

It is erroneous, in my opinion, to approach a given set of facts on the basis that even though two injuries have been suffered at different points of time, and even though each injury may have caused a degree of permanent impairment, the Guide, properly construed, requires any permanent impairment flowing from the second injury to be treated as somehow merging with the permanent impairment flowing from the first.

As his Honour Justice Moore understood it, it was that erroneous approach which infected van Grinsven. His Honour stressed the point at the end of paragraph 50 that:

the Guide does not exist to provide an answer to the question of whether any injury has resulted in permanent impairment. It exists to provide an answer to the question of –

what the degree of impairment has been. We draw your Honours’ attention to this enticing point made in paragraph 52. About the third line his Honour says:

I would probably construe the Guide in the way rejected by the Full Court in Van Grinsven . . . namely that the reference to “lower limb” in the heading in table 9.5 should be treated as a reference to each knee in the singular.

In our submission, there is no reason why that construction should not be adopted because the singular is used, just as the singular is used in table 9.4, referring to the upper limb. It does no violence to the language.

Finally, if we could refer your Honours to paragraph 53, the agreed facts, revealing that the appellant suffered two injuries: left knee, 1986; right knee, 1987. His Honour says after dealing with some other aspects of the matter:

But for the decision in Van Grinsven, I would conclude that the Tribunal fell into error in the approach it adopted.

That is precisely the point that we make – they did fall into error. They failed to apply the statute, section 24, according to its terms; they failed to observe that the terms of the statute had been elucidated, with respect, by this Court in Canute. What has happened here is that the Tribunal and the Full Court, I think speaking essentially only for Justice French and Justice Lindgren, had treated table 9.5 as defining the impairment resulting from the appellant’s right knee injury. Of course in doing that they have followed the path set out for them by the Full Court in Van Grinsven.

So to the extent that there are errors, those that are to be corrected by this Court, with respect, are the errors made by the Tribunal and by the Full Court in this matter. But correcting those errors may require this Court to observe, if it is thought to be appropriate, that the approach taken in Van Grinsven was itself infected with error.

HEYDON J: Surely we must do something about that case if we agree with your principal submissions. The whole difficulty is that Justice Moore was confronted by what he correctly thought was a binding authority and which he thought was inconsistent with, I suppose, dicta in this Court. It must be either approved or disapproved.

MR HANKS: Indeed. Some would say, of course, that if this appeal were to be allowed then no tribunal and no court would be faced with the problem of what to do with Van Grinsven; it would be obvious. But the embarrassment of feeling that it had to be followed would disappear.

HEYDON J: You can overrule a decision without saying so, but courts perhaps are too chary of expressing overruling cases and too prone to rely on implied overruling.

MR HANKS: Far be it from me to discourage that course, your Honour. We are certainly not seeking to do that. We say it was wrongly decided, and if the Court agrees with us, then that will be an appropriate course to take, we say with respect. That is, if the Court agrees that this appeal should be allowed, it can only be allowed, as we understand it, on a basis that demonstrates the error in Van Grinsven.

I want to take your Honours to some observations of Justice Gummow in another case in a moment. I understand that our friends have filed a copy of the judgment in Brennan v Comcare [1994] FCA 1147; (1994) 50 FCR 555. Now that I see your Honours have that judgment, I would make one point first. Perhaps at the risk of too much repetition, the guide does not perform the function of identifying whether a permanent impairment has resulted from an injury. Its function is to identify the degree of impairment that is involved in a permanent impairment. Could I ask your Honours to turn to 570. There are some intricacies about this case with which we are not concerned. This case hinged on the operation of the transitional provisions.

HAYNE J: So what is the point you are seeking to make most immediately by reference to this?

MR HANKS: Most immediately, your Honour, the third line:

s 24 and supporting provisions are drawn in such a way as to distinguish the existence of a permanent impairment and the degree of permanent impairment resulting from the injury.

That is the first point. I would also ask your Honours to turn to 575 at about letter C:

The Guide is to set out, relevantly, the criteria by reference to which the degree of permanent impairment shall be determined and the methods by which that degree shall be expressed as a percentage. The Guide is not entrusted with the task of specifying criteria for the determination of whether an impairment is permanent. It assumes permanent impairment.

Now, we have interpolated and I think we do no violence to Justice Gummow’s proposition, the guide is not entrusted with the task of specifying criteria for the determination of whether there is an impairment, as well as whether the impairment is permanent.

All of this goes back, perhaps, to something that this Court said in Canute in paragraph 6. The content of the phrase “degree of permanent impairment” - the content of that phrase is left to the approved guide. That is what the guide is for. Of course, as this Court also said in Canute, paragraph 14 and I have taken your Honours to this already:

recourse to the criteria and methodologies set out in the Guide is only necessary once the key statutory criterion of the occurrence of “an injury” . . . has been fulfilled.

And we would say occurrence of an injury resulting in permanent impairment has been fulfilled.

KIEFEL J: But in section 24(5) it is “permanent impairment of the employee”, not of the limb. Is that not where this hinges?

MR HANKS: Of course, it is the impairment of the employee that has resulted from the injuries. But one goes back to the definition of “impairment”, your Honour, and one goes back to that being defined as, if I might have a moment to make sure that I do not get it wrong:

the loss, the loss of the use, or the damage or malfunction, of any part of the body –

So one has to identify whether there has been a loss of the use.

KIEFEL J: Yes, but is it not possible to read subsection (1) as referring to an injury in the sense of that definition of “impairment”, but then to read subsection (5) as concerned with the effect of that impairment or injury upon the employee? That is what the degree of permanent impairment is concerned with.

MR HANKS: With respect, no, your Honour. In every case we are concerned with the particular employee, obviously. It is the injury of the employee that is relevant, defined as an injury “suffered by an employee” in the definitions provision. So we focus on the injury of or the injury to the employee. We are concerned with the resulting permanent impairment, no doubt, of the employee, but it is the loss of the use of power to the body of the employee. So it is no more, in our submission, than a reminder, if any were needed, that one is focusing on the particular employee. It is obvious, in a sense. It is almost an unnecessary reminder. We are trying to determine what the entitlement of this employee to compensation may be.

KIEFEL J: So, the reference in table 9.2 of the guide to percentage whole person impairment is then otiose?

MR HANKS: No doubt it is part of the assessment of the degree. Not otiose in that sense, your Honour. But it is a point that we only get to once we get to calculating the degree of a permanent impairment and we get to it, at least in that case, if I might say so, in the case of an injury affecting more than one joint in the limb and that is the example that is dealt with in table 9.2, we get to that after we have identified the injury, the resulting impairment, the fact that the impairment is permanent and now we are coming to determine what is the degree of the impairment of the employee. That is what we are doing. Not otiose there because it cautions or ensures that the effect on the use of that limb is, in some sense, mediated through the combined impairment table.

KIEFEL J: The guide speaks of two things, does it not? The impairment in the sense of what happens to the limb and then the percentage impairment would effect upon the whole person. So the percentage is the degree, the description of the function of the limb is what is then expressed as a degree of the impairment of the whole person. So it is two different concepts, is it not, expressed in the guide itself?

MR HANKS: The guide, we are told, just to go back to page 4 of the guide - - -

HAYNE J: I would have thought you have to start at 3, Mr Hanks, and you have to start at paragraph 2 on page 3, that the comparator is the normal healthy person and the degree of:

Impairment is measured against the . . . normal healthy person.

See paragraph 2.

MR HANKS: Yes. Now, I had taken the Court to that paragraph. I had not taken the Court to under the heading “The Impairment Tables” on page 4. It is based on the concept of “whole person impairment” drawn from the American Medical Association’s guides and we are told that that evaluation of whole person impairment is 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. There is a reference – and it might take me a moment to find this, your Honours – in Canute to the relevance - - -

HAYNE J: Just before you come with Canute at page 4 there is a further reference to “capacity of a normal healthy person”, I think.

MR HANKS: Yes, your Honour. That is in the third paragraph under the heading of “Impairment Tables”. If your Honours would pardon me a moment, I seek to answer Justice Kiefel’s question a little more helpfully. Your Honour may recall that in paragraph 15 in Canute this Court said that section 24(5), as we understand it, if I could paraphrase what appears in paragraph 15, does not import a whole person approach to the determination of the degree of permanent impairment. That ignores the centrality of an injury to the scheme upon which Comcare is likely to compensate depends.

Now, to the extent that the guide might be thought to work against providing compensation in respect of an injury, a particular injury, resulting in a particular permanent impairment by requiring some aggregation or some allowance to be made for other impairments, if the guide does that it goes beyond what it is permitted to do, because the Act does not proceed on that basis. The Act requires that the guide be used to calculate the degree of impairment – permanent impairment – resulting from each injury.

KIEFEL J: But if it is a “whole of person” approach there can only be one conclusion for both.

MR HANKS: But what would the conclusion be? It is not a conclusion that would cause, in our submission, any difficulty for the appellant. The appellant has an injury to her left knee, she has an injury to her right knee. The finding of fact is that each of them has resulted in a permanent impairment, a distinct impairment, only brought together as it were, only melded, merged, by table 9.5. But that is not, as we have put it, the function that the guide can perform.

KIEFEL J: Where is the statement of fact where it states the 10 per cent level of impairment under table 9.5?

MR HANKS: Well, there are two places we can find it, your Honour.

KIEFEL J: I was just going to ask where it is drawn from. What evidence is it based upon?

MR HANKS: Yes, well, I will take you to the evidence shortly. We have the agreed facts at page 35, and I would ask your Honours to look at paragraph 7 on page 35 through to paragraph 11 on page 36. Your Honours can see that the agreed fact is there was an injury to the right knee. That has resulted in a particular condition. That condition is permanent. It does not result in a loss of range of movement, but as one can see in paragraph 10, it has resulted, we would say, in a loss of use or a loss of function so far as that part of the body is concerned.

Paragraph 11 by itself, as we understand it, if there was no other permanent impairment she would be entitled to compensation in respect of the 10 per cent level under table 9.5. That is the agreed fact which then found its way in slightly different language into the Tribunal’s reasons – paragraphs 6 and 7 on pages 43 and 44. It was based on, as we understand it, the agreed facts were based on the report which was commissioned by the respondent.

Now, it is a report that is not included in the appeal book. There is a report in the appeal book which is irrelevant. The report in the appeal book looks at the left knee but we have annexed as annexure C to our submissions the correct report, which, as your Honours can see, was before the Tribunal because it carries in the top right-hand corner the number T10 and your Honours will be familiar with the system used in the Administrative Appeals Tribunal for numbering what are called the section 37 documents or the T documents.

BELL J: A few moments ago, Mr Hanks, you described the right knee injury as resulting in what you called “a distinct impairment” and that is echoed in passages of your submissions and yours submissions in reply. The matter proceeded on a statement of agreed facts and if one goes to the statement of agreed facts beginning at appeal book 35, it is necessary to assess that submission against paragraph 5 as well as paragraph 10, is it not?

MR HANKS: Yes.

BELL J: One sees in paragraph 5 as the result of the left knee condition the impairment is described as “difficulty with grades and steps (not distances)”. It is described in precisely the same way as the impairment resulting from the injury to the right knee. As I read your submissions at paragraph 29 and in your submissions in reply in paragraph 14.3, you are picking up on the observations that Justice Moore made at paragraph 51 in his judgment at appeal book 80 and 81 which is, as I would read it, to acknowledge the common sense that if you have a gammy right knee as well as a gammy left knee common sense suggests you are going to have more difficulty than if you only have a gammy right knee.

MR HANKS: Well, particularly I think as his Honour had in mind when one is negotiating steps.

BELL J: Appreciating the common sense of that if one goes back to the agreed facts at page 35 and one looks at paragraphs 5 and 7, I would be assisted - - -

MR HANKS: I think it is 5 and 10.

BELL J: Paragraphs 5 and 10, with you fleshing out what is the distinct impairment to which you refer in your reply submissions at 14.3.

MR HANKS: Well, the agreed fact identifies – describes the degree of permanent impairment in each of 5 and 10. It does not describe - - -

BELL J: I understand your principal point. It is just that you seem to be going a step further, as I read your submissions, particularly at 14.3, when you said there is no difficulty in identifying a distinct impairment that has resulted from the right knee injury and in light of the agreed facts that was unclear to me. It does not seem to me to be necessary to your argument but - - -

MR HANKS: No. Your Honour, it is. Again I will have to go back to the terms of the statute, and back to the definition of “impairment”. It is the loss of the use of the right leg.

BELL J: Yes, I understand that.

MR HANKS: That is how we would put it. It is manifested in difficulty in negotiating steps and slopes. That is how it is manifested, just as diminished use of the left knee is manifested – also manifested in that way.

BELL J: No part of your argument relies on what I would call the common sense notion that as a matter of practical reality one is likely to encounter more difficulty with two bad knees than one.

MR HANKS: I think it does in one sense, in the sense that it does no violence to the terms of table 9.5 to accept that each leg can be assessed as producing that result. That is how we would put it. Now, someone had asked me and I had forgotten - I do apologise. Who had asked me – was it Justice Kiefel?

KIEFEL J: About the report, the evidentiary basis for the statement of agreed facts. I have read the report now.

MR HANKS: Your Honour has read the report, and your Honour has seen the very clear statement, I think it is on the second-last page.

HEYDON J: It is page 10 of T10.

MR HANKS: Thank you. Thank you very much, Justice Heydon. It is in page 10, about point 3 on the page. So there is the opinion of the medical practitioner who was consulted by the respondent:

this is referable to the right knee condition, independent of the left knee condition.

So that was the support for the agreed fact and the support for the finding of fact that was made by the Tribunal.

KIEFEL J: Where does the assessment of 10 per cent come from as the Tribunal’s assessment?

MR HANKS: Where did the Tribunal’s assessment come from, your Honour?

KIEFEL J: There is not a reference here of 10 per cent.

MR HANKS: Yes, there is, your Honour.

KIEFEL J: I am missing it.

MR HANKS: On page 10 at about point 3 on the page, “Right knee”, and then there is a reference to the two tables in the guide.

KIEFEL J: I see, yes. Yes, I had not read that. Thank you.

MR HANKS: Yes, thank you, your Honour.

BELL J: This is page 10, is it, of the appeal book?

MR HANKS: No, your Honour.

BELL J: I am sorry.

HAYNE J: T10 attached to your submissions, is that right?

MR HANKS: Yes, there was an error in the compilation of the appeal book, your Honour. Somehow the left knee wanted to make an appearance, inappropriate; it should have been the right knee. Unfortunately, Dr Vecchio wrote his reports about the two knees on the same day.

HEYDON J: Just going back to this common sense point that Justice Bell made towards you. You would make this forensic use of issue in this way though, would you not? It might be said eventually that there is an element of overcompensation. When there was a left knee injury your client had difficulty going up stairs; she has a right knee injury, she still has difficulty going up stairs, but we do not know anything about how much harder it is. You are returning to the common sense of it really to say this, are you not? These are mechanical methods for allocating, perhaps not very large sums of money, but sums of money.

They are the American statistics which at least the guide takes up – or not the statistics, but the percentages. There is a sort of rough guide to a type of rough justice, and the fact – your common sense argument that if both knees are bad you might expect to have more difficulty going up the stairs, you cannot use the strong leg to give strength that the weak leg does not have. There is a saying that it all balances out. It is not an injustice necessarily against the respondent that your client should have the extra money?

MR HANKS: That is so, and that is perhaps a slightly different way of stating the point that I put to Justice Bell, that to permit or to oblige the respondent to pay compensation in respect of the injury to the right knee does no violence to table 9.5. That is how I put it to her Honour. I would be enthusiastic to embrace that alternative, your Honour, that your Honour put to me.

Now, what is clear here is that at every level the Tribunal and the plurality in the Full Court, the statement on page 5 of the guide has been treated as controlling the statement that:

Where two or more injuries give rise to the same impairment a single rating only should be given.

Now, your Honours will understand that that statement could be relevant if in truth the two injuries gave rise to a single impairment to the same loss of use of the same part of the body. That is not our case. The finding of fact made here is against that, there is a distinct loss of the use of the right knee.

So even if the guide could play some role in controlling, constricting, the identification of the permanent impairment, it would not be applicable here, but of course, our primary point is it cannot play that role. Recourse to the guide is only necessary and permitted once the key statutory criterion of the occurrence of an injury resulting in at least one permanent impairment has been fulfilled, and it cannot be used to determine whether impairment has resulted.

HEYDON J: Well, you have said that quite a few times, I think.

MR HANKS: I have, and I will not say it any more, other than to say that it is entirely consistent with Justice Gummow’s observation in Brennan v Comcare to which I took your Honours at page 575. Now, those are the matters that we wish to put orally, your Honours.

HAYNE J: Yes, thank you, Mr Hanks. Yes, Mr Howe.

MR HOWE: Yes, I would propose to briefly supplement the review of the legislative scheme undertaken by Mr Hanks and to emphasise some additional matters that were not the subject of any particular treatment by him, but which we say are important to our case, and then to briefly supplement our written submissions, and then to deal with just a couple of the matters that fell from my learned friend this afternoon.

In relation to some additional aspects of the legislative scheme, we invite your Honours’ attention to section 24(1), which your Honour Justice Hayne in particular has noted has something of a gatekeeper role to play, if not simply because of its location, but also because it is declaratory in its terms. However, in our submission, it does not operate so as to objectively confer an entitlement to the payment of compensation, and we derive some support for that not only by reference to later provisions, which I will take your Honours to, but also by reference to section 11 of the Act.

Your Honours will see that section 24(1) refers to “Comcare is liable to pay compensation to the employee,” and that exact language is picked up in section 11:

The liability of a relevant authority to pay compensation to a person under this Act is the liability of that authority to pay to the person such amount or amounts as are determined by that authority to be payable to the person under this Act.

So at most, in our submission, section 24(1) gives rise to a contingent liability which will either mature into a liability to pay under other provisions of the Act, or not. We would also, in response to a matter which fell from Justice - - -

HAYNE J: Assume all that to be so, what follows from it?

MR HOWE: Only that one cannot, as it were, treat section 24(1) as the start and finish of the question that arises between the parties, and that ultimately the issue joined between the parties is to be resolved by reference to other provisions. Foremost of those is section 24(5), and this introduces an additional element which does not appear in section 24(1) because the reference to “permanent impairment” is a reference to permanent impairment “of the employee”.

HAYNE J: Is impairment in that collocation to be read in the defined sense, or in some other sense?

MR HOWE: It depends, your Honour, on the criteria and methodology adopted by Comcare in promulgating the guide, and I will come back to that in a little while, but my friend has taken you to part of section 28(1), namely paragraph (a) and I propose in due course to take you to another important part, but your Honours will see in section 24(6), immediately after (5), that it provides:

The degree of permanent impairment shall be expressed as a percentage.

Now, the degree spoken of in subsection (6), in our submission, must be the degree of permanent impairment of the employee, which is the discrimen adopted in subsection (5), and your Honour, that same language, namely “degree of permanent impairment of an employee”, is also to be found in section 25(4) of the Act which contemplates “a final assessment of the degree of permanent impairment of an employee”.

That is an oddly located section. Likewise, in section 25(5) there is a reference to “the degree of permanent impairment of an employee”, and if I could also note that the same language appears in the formula set out in section 27(2) where:

A is the percentage finally determined by Comcare under section 24 to be the degree of permanent impairment of the employee –

but more particularly, if I could now take your Honours to section 28(1), and my learned friend took you to paragraph (a) which requires the guide to set out criteria, and one can – as it were – underline the word “criteria”, but it is criteria by reference to which, again the degree of permanent impairment of an employee resulting from an injury shall be determined, but one part of the subsection not mentioned by my learned friend, but which we say looms very significantly in this case is paragraph (c):

methods by which the degree of permanent impairment . . . as determined under those criteria, shall be expressed as a percentage.

HAYNE J: You have taken us to a large number of provisions in which the word “impairment” appears.

MR HOWE: Yes.

HAYNE J: In the morning I would be grateful if you could tell me in which of those provisions the word “impairment” is used in the defined sense and whether there is any of the provisions to which you have taken us where “impairment” is used in a sense other than the defined sense we see in section 4(1).

MR HOWE: Yes. I am happy to do that tomorrow morning.

HAYNE J: Yes.

MR HOWE: Was the Court proposing to adjourn now?

HAYNE J: No. I am putting you on notice, Mr Howe, so that you can give a considered answer because – can I put this to you, Mr Howe, so that you know what you are answering. It is far from evident to me at all, yet, that “impairment” is used anywhere in the Act except in its defined sense and I need to understand whether the respondent submits that it is used in some other sense because the next question will be what is this new and other and different sense in which it is employed?

MR HOWE: Yes. Perhaps if I could take your Honours now to the definition of “impairment” which I know your Honours have been taken to but my learned friend of course emphasises the commencing words of that definition which refers to the loss “of any part of the body” or loss of the use “of any part of the body”. But in particular in Van Grinsven the Full Court of the Federal Court noted that part of the methodology deployed by table 9.5 within the meaning of section 28(1)(c) was not to concentrate attention in assessing the degree of impairment on the loss of the use of a part of the body but on the damage or malfunction to part of a bodily system or function.

In our submission, the guide is permitted to concentrate attention on part of the definition of “impairment” and in doing so it employs a methodology as precisely contemplated by section 28(1)(c). If I could your Honours then at this point to a couple of pages of the permanent impairment guide to illustrate the point, for instance, on page 3, the words that the Court has already been taken to, the concluding words in the opening paragraph and the commencing words at paragraph 2, we say that those sentences are part of the general methodology adopted in the guide.

Then over the page on page 4 under the heading “Impairment Tables” the second paragraph is part of the general methodology. The third paragraph under the heading “Impairment Tables” is also part of the methodology. One part of the methodology that my learned friend has not taken your Honours to appears at the very bottom of page 4 where it is said that:

There is no discretion to choose an impairment value not specified in the Guide. For example, where 10% and 20% are specified values there is no discretion to determine impairment as 15%.

So that is a more specific methodological stipulation. But if one goes over the page to page 5, your Honours, to the words which perhaps the outcome of the appeal turns upon, in the last sentence of the opening paragraph it is stated:

Where two or more injuries give rise to the same impairment a single rating only should be given.

Now, we say that the guide is at that point descending into quite a high level of particularity as to methodology. Before parting from page 5, your Honours will see the second paragraph under the heading of “Double Assessment” also seems to be somewhat oddly located. That is a paragraph dealing with combined impairments and almost should be taken up and placed immediately above the heading “Double Assessment” because it really is dealing with combined impairments. But in any event, that paragraph commencing:

Where an employee suffers from more than one impairment –

that again is part of the methodology of the guide. In our submission, the Act itself expressly contemplates that by virtue of the method which the guide deploys for assessing the degree of compensable impairment, the employee might end up with a rating of 0 per cent even though, as we all acknowledge, the practical reality is that the employee does have a permanent impairment, that is impairment which answers the description in the definition and an impairment which is likely to continue indefinitely.

In particular that is expressly contemplated in section 28(5) which I do not think my learned friend took your Honours to. Your Honours will see that it provides that:

The percentage of permanent impairment . . . suffered by an employee as a result of an injury ascertained under the methods referred to in paragraph (1)(c) may be 0%.

In our submission, the appeal ultimately ought be dismissed because the plain language of the stipulation on page 5:

Where two or more injuries give rise to the same impairment a single rating only should be given –

is a methodological stipulation within the express contemplation of the Act which ultimately has the effect of ascribing a single rating only, namely, in the appellant’s case, a single rating of 10 per cent and ultimately the effect is to ascribe the rating of 0 per cent with respect to the permanent impairment suffered as a result of the second injury.

HAYNE J: That proposition is one expressed in terms of there being two impairments, one of which is to be valued at zero. Do I understand the proposition correctly?

MR HOWE: The net effect is exactly that, that the - - -

HAYNE J: The proposition with which we are dealing at page 5 hinges about the concept of the same impairment.

MR HOWE: Yes.

HAYNE J: Focusing for the moment on what appears at page 5, what is the impairment that Ms Fellowes suffered?

MR HOWE: The impairment which is described against the level of 10 per cent in table 9.5 because the expression “the same impairment” in the sentence just quoted from on page 5 must, in our submission, be a reference to “the same impairment as described in this guide” and when one goes to table 9.5 the impairment was that the appellant could rise to standing position and walk but has difficulty with grades and steps. That was an impairment that pre-existed.

By virtue of the methodology of applying a single rating only, that has the effect of measuring the compensable degree of impairment of the employee as a whole person under the guide as being 0 per cent but a single rating of 10 per cent is ascribed to both those impairments but the effect, we accept, is that the employee, as in this case, was paid compensation in respect of the permanent impairment arising from the first injury and was paid no compensation in respect of the permanent impairment arising from the second injury.

HAYNE J: Now, the definition of “impairment” in the Act can be identified as falling into two parts separated by the word “of” which commences the second line.

impairment means the loss, the loss of the use, or the damage or malfunction –

part 1 of the definition:

of any part of the body or of any bodily system or function or part of such system or function.

Do you understand the way in which I seek to read the definition, divided in that fashion?

MR HOWE: Yes, your Honour. What we would say is that there are four descriptors, initially, that is, the loss of something or the loss of the use of something or the damage of something or the malfunction of something and then those four things can apply to either any part of the body or of any bodily system or any part of any bodily function or any part of such a system or function.

CRENNAN J: Does not your argument though utilise page 5 for the purposes of treating the right and the left knee as a single part of the body, in terms of section 4?

MR HOWE: The methodology deployed in table 9.5 we accept does not direct attention to particular parts of the body other than the lower limbs, and then the methodology is to look at an impairment by reference to lower limb function, and there is a telling contra-distinction which can be drawn between table 9.5, on the one hand, which does not direct attention at all to particular parts of either of the lower limbs, and then when one goes to table 9.4, although it is concerned with upper limb function, it does direct attention to different upper limbs.

Then a further contra-distinction exists, for instance, with table 9.2 which is dealing with the lower extremities, but by reference to particular parts, that either of the lower extremities such as the hip, the knee, the ankle, the toes and the like, and so too, table 9.1 directs attention to particular parts of the upper extremities, but the aspect of the definition of “impairment” selected by the methodology deployed in table 9.5 is not to discriminate between any particular parts of either lower limb, but rather to concentrate on the use of the lower limbs as part of the bodily system or function directed to such matters as standing, walking and the like.

So we, in our submission, say that that was an approach, a methodology which was open to Comcare when it promulgated the guide. It is an aspect of the methodology which was the subject of very specific consideration by the Full Court of the Federal Court in Van Grinsven and it was a matter of emphasis in Van Grinsven that table 9.5 was drawn quite distinctly from other tables such as tables 9.1, 9.2, 9.4 and the like because it was directed to an overall functional loss of the lower limbs used together for the performance of a particular bodily function as opposed to directing attention to an assessment of the degree of permanent impairment by reference to different parts of an upper limb or a lower limb.

HAYNE J: What then do you say is the bodily system or function which is the subject of reference in the present matter?

MR HOWE: The bodily system or function is the use of the lower limbs for the primary purposes that they are deployed for in the ordinary activities of daily living by an ordinary person, and those are standing, walking, negotiating grades, steps, and so on. It might have been that the authors of the guide could have perhaps deployed a different methodology and picked up the sort of approach taken in table 9.2 by directing attention to the knee, the ankle, the thigh, the left lower limb, or the right lower limb, but in fact, that is, in our submission, obviously not the methodology deployed, and it was a consciously different methodology directed to a different means of assessing the degree of “whole person” impairment consequent upon an impairment of the lower limbs.

In relation to the concept of “whole person” impairment we took Justice Kiefel to have noted the significance of the introduction of the words “of an employee” in various subsequent provisions subsequent to section 24(1), and of course we have to accept, as we do, and we make the concession that nowhere in the Act can we point, in express terms, to the notion of “whole person” impairment.

However, in our submission, sections 24(5) and 25(4) do direct attention to the degree of permanent impairment of the employee, rather than simply the degree of permanent impairment as defined, and the presence of the words “of an employee” for instance, in section 24(5) were a matter of emphasis in the judgement of Justice Burchett in Brennan v Comcare [1994] FCA 1147; (1994) 50 FCR 555. My learned friend took your Honours to that. The relevant passage in the judgment of Justice Burchett with whom Justice Ryan and Justice Gummow generally agreed, appears at the bottom of page 558, and adjacent to the letter G his Honour said:

When the extent of permanent impairment has been determined, s 25(4) adverts to the possibility that a further degree of impairment of the employee may afterwards appear, whether related to the same or a different part of his body, no distinction being made.

His Honour himself gave emphasis to the words “of the employee” by italicising those, and with respect, it almost has to be the case because otherwise the loss of a spleen, for instance, if one applied the first part of the definition of “impairment”, might result in an assessment of the degree of impairment at 100 per cent because 100 per cent of the spleen is lost, or there is a 100 per cent loss of the use of the spleen.

But, with resect, we say the Act, considered as a scheme in the light of the guide, contemplates that the assessment of the degree of permanent impairment of an employee might concentrate on the “loss of function” part of the definition of “impairment” so as to capture in a common sense way, the activities of daily living that the injured part of the body occasions disability in performing.

KIEFEL J: The objects of the legislation are not stated but one could assume, I suppose, that at least part of the object was to compensate for an inability to pursue employment or an effect on an ability to undertake employment.

MR HOWE: Definitely so, although that particular form of compensation is dealt with by way of incapacity payments rather than payments of lump sums for permanent impairments.

KIEFEL J: I see, so it is daily life as you say.

MR HOWE: Yes.

HAYNE J: Mr Howe, I see the time. For the benefit of counsel in the case following, are you able to offer an estimate of how long you expect to require to complete your argument? I am not seeking to hurry you along. I just want to be able to tell the Deputy Registrar how long this case might be expected to go into tomorrow.

MR HOWE: Your Honours, I expect I will only be another 15 or 20 minutes. I have really, with respect, put the substance of our case by way of supplementation in the written submissions, and it just falls to me to address some additional matters, but on the whole, can I say for oral submission purposes, I am more than halfway.

HAYNE J: Yes, thank you Mr Howe. Adjourn the Court to 10.15 tomorrow morning.

AT 4.14 PM THE MATTER WAS ADJOURNED
UNTIL TUESDAY, 23 JUNE 2009