Commission of the Safety, Rehabilitation and Compensation of Commonwealth Employees v Maxwell Francis Brennan [1993] FCA 499; (1993) 18 Aar 256 (1993) 45 FCR 475 (12 October 1993)

FEDERAL COURT OF AUSTRALIA

COMMISSION FOR THE SAFETY, REHABILITATION AND COMPENSATION OF COMMONWEALTH
EMPLOYEES v. MAXWELL FRANCIS BRENNAN
No. ACTG42 of 1992
FED No. 731
Number of pages - 16
Administrative Law
[1993] FCA 499; (1993) 18 AAR 256
(1993) 45 FCR 475

COURT

IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
NEAVES J

CATCHWORDS

Administrative Law - Appeal from Administrative Appeals Tribunal - Claim for compensation for permanent impairment resulting from personal injuries received in the course of employee's employment - Injuries suffered during period when Compensation (Commonwealth Government Employees) Act 1971 (Cth) in force - Operation for disc herniation while that Act in force - Operation not successful - Consideration of transitional provisions of Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth) - Question for Tribunal whether impairment had, prior to commencement of 1988 Act, become permanent in the defined sense - Whether Tribunal failed to divorce question whether impairment permanent from question whether final determination could be made of degree of permanent impairment - Whether statutory provision ambiguous - Whether administrative guidelines may be used as aid to statutory construction.

Administrative Appeals Tribunal Act 1975 (Cth), s.44(1)

Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth), s.4(1), 24, 124(3)

Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11

Re Hill and Australian Telecommunications Corporation (1991) 23 ALD 522

Re Willis and Australian Telecommunications Commission (No.2) (1990) 11 AAR 348

Behan v Australian Telecommunications Corporation [1990] FCA 502; (1990) 26 FCR 337

Australian Telecommunications Corporation v Willis [1993] FCA 53; (1993) 17 AAR 88

HEARING

CANBERRA, 7 December 1992
12:10:1993

Counsel for the applicant : Mr J McGill

Solicitor for the applicant : Australian Government

Solicitor

Counsel for the respondent : Mr R. Crowe

Solicitors for the respondent: Gary Robb and Associates

ORDER

The Court orders that:

1. The decision of the Administrative Appeals Tribunal given on
9 July 1992 be set aside.
2. The matter be remitted to the Administrative Appeals
Tribunal for further consideration and determination
according to law.
3. There be no order as to the costs of the application.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

NEAVES J The Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees has applied to the Court by way of appeal pursuant to s.44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) from the decision of the Administrative Appeals Tribunal ("the Tribunal") given on 9 July 1992 upon the review of a determination made on 26 June 1991 under the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth) ("the 1988 Act") affirming a determination which had been made under that Act on 4 December 1990. The earlier determination had disallowed the claim made by Maxwell Francis Brennan ("the respondent") for a lump sum payment under the 1988 Act for permanent impairment arising out of a compensible condition, being recurrence of lower back pain. The Tribunal set aside the determination under review and remitted the matter for reconsideration in accordance with directions that -

"(1) the applicant's permanent impairment arising from his
compensible condition, being recurrence of lower back pain,
commenced after 1 December 1988;
(2) Comcare is liable to pay compensation to the applicant in
respect of that injury pursuant to s.24 of the Commonwealth
Employees' Rehabilitation and Compensation Act 1988; and
(3) the amount of the compensation is 28 per centum of the
maximum amount."

The references to "the applicant" are, of course, references to the present respondent.

2. The respondent's compensible condition of which the Tribunal spoke arose from injuries to his back which were suffered while the Compensation (Commonwealth Government Employees) Act 1971 (Cth) ("the 1971 Act") was in force. It is convenient, before proceeding further, to refer to relevant provisions of that Act and of the 1988 Act.

3. The 1971 Act provided (s.27) that, if personal injury arising out of or in the course of the employment of an employee by the Commonwealth was caused to the employee, the Commonwealth was, subject to the Act, liable to pay compensation in respect of that injury in accordance with the Act. Section 29 provided that, where an employee contracted a disease or suffered an aggravation, acceleration or recurrence of a disease and any employment of the employee by the Commonwealth was a contributing factor, the contraction of the disease, or the aggravation, acceleration or recurrence, was to be deemed to be a personal injury to the employee arising out of the employment of the employee by the Commonwealth. Section 45 prescribed the amount of compensation payable by way of weekly payments in respect of an injury resulting in the employee being totally incapacitated for work and s.46 prescribed the weekly amounts payable in the case of partial incapacity.

4. Section 28 provided that, if an employee was involved in an accident arising both out of and in the course of his employment by the Commonwealth and the accident did not cause personal injury but resulted in the loss of, or damage to, an artificial limb or other artificial substitute, or a medical, surgical or other similar aid or appliance, used by the employee, compensation was payable in respect of such loss or damage. Section 39 provided for a lump sum payment to be made where an injury to an employee resulted in a permanent loss, that is to say, a loss likely to continue indefinitely, being the total or partial loss of, or the total or partial loss of the efficient use of, a part of the body or a faculty that was specified in that section. Sections 40, 41 and 42 provided for certain lump sum payments in the case of other kinds of loss or damage. In the case of ss.40 and 42, the loss had to be total and permanent. In the case of s.41, the loss had to be severe and permanent.

5. So far as appears from the material before the Court, no determination was made under the 1971 Act while it remained in force providing for the payment to the respondent under that Act of compensation in the form of either weekly payments or a lump sum. Determinations were, however, made under that Act on 26 October 1972 and 11 May 1976 that the respondent had sustained personal injury arising out of or in the course of his employment on 15 August 1972 and 8 April 1976 respectively. The earlier determination described the injury as musculo-skeletal strain lumbar region. The later determination described the injury simply as back injury. A further determination was made on 12 May 1987 accepting liability for recurrences on 25 July 1986 and 7 September 1986 of the compensible injuries suffered by the respondent on 15 August 1972 and 8 April 1976. Pursuant to the determinations referred to, the cost of certain medical treatment was paid by the Commonwealth pursuant to s.37 of the 1971 Act.

6. The 1988 Act came into operation on 1 December 1988. It repealed the 1971 Act. Upon its commencement, s.14(1) of the 1988 Act provided that, subject to Part II of the Act (comprising ss.14-33 inclusive), the Commission was liable to pay compensation in accordance with the Act in respect of an injury suffered by an employee if the injury resulted in death, incapacity for work, or impairment. The expression "impairment" was defined in s.4(1) to mean -

"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".

The references to the Commission in s.14(1) and in other sections of the 1988 Act to which I will refer later were references to the Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees established by s.68 of the 1988 Act. That provision was repealed and substituted by s.6 of the Industrial Relations Legislation Amendment Act (No.3) 1991 (Act No.7, 1992) which came into operation on 22 June 1992, that is to say, after the matter had been heard by the Tribunal but before it had given its decision. The substituted section established a body called "Comcare" in place of the Commission. Consequential amendments were made to s.14 and to other sections of the 1988 Act (see s.19 and Schedule 1 of Act No.7, 1992). Reference should be made to the transitional provisions contained in ss.20-23 of the Industrial Relations Legislation Amendment Act (No.3) 1991. It may also be noted that s.13 of that Act inserted a new s.89A in the 1988 Act creating a new body with different functions but being called the Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees.

7. Before proceeding further it may also be recorded that no question was raised at the hearing as to the standing of the applicant to institute this proceeding. In this connection, however, reference should be made to s.60(2) of the 1988 Act in the form in which it stood at the relevant time, viz. 5 August 1992.

8. Division 4 of Part II of the 1988 Act (comprising ss.24-28 inclusive) dealt with injuries resulting in impairment. Section 24 provided:

"(1) Where an injury to an employee results in a permanent
impairment, the Commission is liable to pay compensation to the
employee in respect of the injury.
(2) For the purpose of determining whether an impairment
is permanent, the Commission shall have regard to:
(a) the duration of the impairment;
(b) the likelihood of improvement in the employee's
condition;
(c) whether the employee has undertaken all reasonable
rehabilitative treatment for the impairment; and
(d) any other relevant matters.
(3) Subject to this section, the amount of compensation
payable to the employee is such amount, as is assessed by the
Commission under subsection (4), being an amount not exceeding the
maximum amount at the date of the assessment.
(4) The amount assessed by the Commission shall be an
amount that is the same percentage of the maximum amount as the
percentage determined by the Commission under subsection (5).
(5) The Commission shall determine the degree of permanent
impairment of the employee resulting from an injury under the
provisions of the approved Guide.
(6) The degree of permanent impairment shall be expressed
as a percentage.
(7) Subject to section 25, where the Commission determines
that the degree of permanent impairment of the employee is less
than 10%, an amount of compensation is not payable to the employee
under this section.
(8) Subsection (7) does not apply in relation to an
impairment resulting from the loss (of), or injury to, a finger or
toe.
(9) For the purposes of this section, the maximum amount
is $80,000."

The expression "permanent" was defined in s.4(1) to mean "likely to continue indefinitely". The expression "approved Guide" was defined in that section to mean -

"(a) the document, prepared by the Commission in accordance with
section 28 under the title 'Guide to the Assessment of the
Degree of Permanent Impairment', that has been approved by
the Minister and is for the time being in force; and
(b) if an instrument varying the document has been approved by
the Minister - that document as so varied."

Section 25 provided for the interim payment of compensation where the Commission had made a determination that an employee was suffering from a permanent impairment as a result of an injury and was satisfied that the degree of impairment was equal to or more than 10% but had not made a final determination of the degree of impairment. Subsection (4) of that section provided that, where the Commission had made a final assessment of the degree of permanent impairment of an employee, no further amounts of compensation were to be payable to the employee in respect of a subsequent increase in the degree of impairment, unless the increase was 10% or more.

9. Section 28 relevantly provided:

"(1) The Commission may, from time to time, prepare a
written document, to be called the 'Guide to the Assessment of the
Degree of Permanent Impairment', setting out:
(a) criteria by reference to which the degree of the
permanent impairment of an employee resulting from an
injury shall be determined;
(b) ...
(c) methods by which the degree of permanent impairment
..., as determined under those criteria, shall be
expressed as a percentage.
(2) The Commission may, from time to time, by instrument
in writing, vary or revoke the approved Guide.
(3) A document prepared by the Commission under subsection
(1), and an instrument under subsection (2), have no force or
effect unless and until approved by the Minister.
(4) Where the Commission, an administering authority or
the Administrative Appeals Tribunal is required to assess or
re-assess, or review the assessment or re-assessment of, the degree
of permanent impairment of an employee resulting from an injury
..., the provisions of the approved Guide are binding on the
Commission, the administering authority or the Administrative
Appeals Tribunal, as the case may be, in the carrying out of that
assessment, re-assessment or review, and the assessment,
re-assessment or review shall be made under the relevant provisions
of the approved Guide.
..."

10. Part X of the 1988 Act (ss.123-139 inclusive) contained transitional provisions consequent upon the repeal of the 1971 Act. Section 124(1) provided that, subject to Part X, the Act applied in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day (1 December 1988). Section 123A, which was inserted by the Industrial Relations Legislation Amendment Act 1991 (Cth) and which was to be taken to have commenced on 1 December 1988 (see s.2(2) of that Act), provided:

"A reference in this Part to an injury suffered before the
commencing day is a reference to an injury within the meaning of
whichever of the 1912 Act, the 1930 Act or the 1971 Act was in
force when the injury was suffered, as that Act was then in
force."

11. A person was not entitled to compensation under the 1988 Act in respect of an injury, loss or damage suffered after the commencement of the 1971 Act and before 1 December 1988 if compensation was not payable in respect of that injury under the 1971 Act as in force when the injury, loss or damage was suffered (s.124(2)). Section 124(1A), a provision inserted at the same time as s.123A and also to be taken to have commenced on 1 December 1988, provided:

"Subject to this Part, a person is entitled to compensation
under this Act in respect of an injury, loss or damage suffered
before the commencing day if compensation was, or would have been,
payable to the person in respect of that injury, loss or damage
under the 1912 Act, the 1930 Act or the 1971 Act."

12. Section 124(3) and (4) relevantly provided:

"(3) A person is not entitled to compensation under section
24 or 25 in respect of a permanent impairment ..., being an
impairment ... that occurred before the commencing date, if:
(a) the person received compensation of a lump sum in
respect of that impairment ... under the 1912 Act, the
1930 Act or the 1971 Act; or
(b) the person was not entitled to receive compensation of
a lump sum in respect of that impairment ...:
(i) where the impairment ... occurred before
the commencement of the 1930 Act - under the 1912 Act;
(ii) where the impairment ... occurred after
the commencement of the 1930 Act but
before the commencement of the 1971 Act -
under the 1930 Act as in force when the
impairment ... occurred; or
(iii) in any other case - under the 1971 Act as
in force when the impairment ... occurred.
(4) The amount of compensation (if any) that a person is,
by virtue of this section, entitled to receive under section 24 or
25 in respect of a permanent impairment, ... being an impairment
... that occurred before the commencing day, shall be the same as
the amount of the compensation that would have been payable to
that person, if this Act had not been enacted, under:
(a) where the impairment ... occurred before the
commencement of the 1930 Act - the 1912 Act;
(b) where the impairment ... occurred after the
commencement of the 1930 Act but before the
commencement of the 1971 Act - the 1930 Act as in
force when the impairment ... occurred; or
(c) in any other case - the 1971 Act as in force when the
impairment ... occurred."

13. The reasons for decision of the Tribunal record (par.3) that, between 1966 and 1979, the respondent worked as a carpenter, housing inspector, works supervisor and safety officer for various Commonwealth Government Departments. In 1979, he commenced employment with the Department of Defence as a safety adviser. He ceased work on 7 June 1988 before undergoing a back operation on the following day. In the following paragraphs (pars 4-10) of its reasons for decision, the Tribunal sets out what the respondent (the applicant before the Tribunal) had said concerning the circumstances in which the injuries to his back occurred, the symptoms from which he suffered from time to time and the medical treatment he received. Although those paragraphs are not expressed as findings of fact by the Tribunal, it is apparent from par.25 of the Tribunal's reasons for decision that the Tribunal accepted the respondent as a witness of truth and that it was satisfied that the facts of the matter were as set out in those paragraphs. What follows is a summary of the facts as found by the Tribunal.

14. The respondent had no back problems prior to 1972 but on 15 August 1972, in the course of his employment with the Commonwealth, he injured his back whilst moving a heavy stove. The injury did not prevent him from working between 1972 and 1976 and he was totally pain free in that period except for the odd occasion when he over-exerted himself although, even then, he did not suffer any great discomfort.

15. On 8 April 1976, the respondent suffered a further injury to his back for which he claimed compensation. He was prescribed medication and heat treatment and returned to work the following day. Between 1976 and 1983 he did not have any further problems with his back, except for minor discomfort on various occasions when he may have over-exerted himself. Usually with a little rest he would return to normal.

16. On 11 August 1983, he suffered a further injury to his back when rising from an office chair. He lost no time from work as a result of that incident.

17. After playing a round of golf in July 1986, whilst on recreation leave, the respondent experienced difficulty the following morning getting out of bed because of pain in his legs and back. He received treatment and returned to work one week later when his recreation leave expired.

18. He suffered a further back episode in August 1986 when he could not stand in the morning for 20 minutes due to pain generating down both legs.

19. The symptoms varied in 1987 and the treatment he received, including physiotherapy and medication, relieved his back problem. His condition was not much different in 1987 from what it was in previous years and he could not recall having any time off work.

20. In 1988, after an extensive period of physiotherapy had not stabilised his back condition, Dr K. Maguire, rheumatologist, recommended he have a CAT scan examination and referred him to Dr R. Newcombe, neurosurgeon. Dr Newcombe performed a myelogram and recommended surgery to correct a disc problem in his lower back. On 8 June 1988, Dr Newcombe performed an L5-S1 discectomy for quite marked disc protrusion. In the period immediately before the operation, the applicant was not having substantial problems with his back and he continued to work until 7 June 1988.

21. After the initial effects of the operation, the respondent had ten days' pain relief and then a slight recurrence of pain in his leg whilst still in hospital. Therapy took effect, however, and he continued to improve until he had another flare up three or four weeks later. He again started to experience symptoms in his back and legs similar to those he experienced in the 1986 episodes but they were not as severe. There was a period of about nine months after the operation during which the respondent had some improvement but thereafter his symptoms remained at about the same level, neither improving nor significantly deteriorating.

22. On 18 October 1988, Dr Newcombe, carried out a further myelogram which showed some continued compression of the S1 nerve root on the right. Dr Newcombe recommended another operation. The respondent, however, decided against a further operation on being advised that the first operation may have created permanent damage to his back and that, even with an operation, he might not return to his pre-operative state.

23. Dr Newcombe issued a medical certificate stating that the respondent should not return to work until 30 November 1988. In about December 1988, the respondent was certified unfit to return to work for a further three months by a Commonwealth Medical Officer. In March 1989, a Commonwealth Medical Officer recommended that he return to work part time with restricted duties. The respondent undertook a course to rehabilitate him into the workforce. In mid 1989, he was offered a part time graduated return to work but, after a number of attendances at the workplace, the Department of Defence informed him that he was no longer employable due to his condition. The respondent then accepted a redundancy package. In the latter half of 1989, his back symptoms became more regular, to the extent that they were interfering with his normal lifestyle.

24. The respondent's normal lifestyle prior to 1986 included playing golf about four times a year and bowls regularly. He gave up golf in 1986, on the basis of medical advice, but continued to play bowls as several doctors regarded it as having therapeutic value for him. At the time of the hearing before the Tribunal he complained of constant back pain generating down into his right leg and on occasions the left leg. His lower right leg and foot were constantly numb. These symptoms fluctuated and affected what he was able to do. He was unable to do any form of physical work and found sitting in a semi-fixed position for prolonged periods difficult.

25. The Tribunal found that the respondent had a permanent impairment and identified the primary issue for its determination as being whether the impairment became permanent before 1 December 1988.

26. The Tribunal, after referring to ss.4(1), 24 and 124(1) and (3) of the 1988 Act, summarised the submissions of the parties and referred to the medical evidence before it. The reasons for decision of the Tribunal continue:

"21. The Tribunal has considered thoroughly the submissions by
the parties on the issue of permanent impairment and is satisfied
that the approach contended by the applicant (Mr Brennan) is the
correct approach. The Tribunal is critical of the (Commission's)
approach. It is noted that in a letter by the (Commission) to Dr
Katekar, dated 18 June 1990, it quotes part of the Guide when it
states -
'you should note that the criteria for an impairment to be
regarded as permanent is when the recovery process has been
completed, i.e. when the full and final effects of
convalescence, the natural healing process and active (as
opposed to palliative) medical treatment has been achieved.'
However, in its determination and detailed reconsideration there
is no mention of the Guide, and at the hearing counsel for the
(Commission), in the briefest of submissions, stated that the
Guide is not applicable as it assesses the degree of permanent
impairment, rather than assessing when permanent impairment first
occurred. The Tribunal rejects this submission as, in relation to
the transitional case, the determination of that degree
necessarily involves a determination of when that degree became
permanent, and the Guide certainly clarifies this issue and other
relevant terms used in the sections of the 1988 Act here under
consideration."

The references to "the Guide" are references to the "Guide to the Assessment of the Degree of Permanent Impairment" referred to in the definition of "approved Guide" in s.4(1) of the 1988 Act. That definition is set out earlier in these reasons.

27. The Tribunal distinguished the decision of this Court in Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11 on the ground that no issue arose in that case as to the date permanent impairment first commenced. It also distinguished the decision of the Tribunal in Re Hill and Australian Telecommunications Corporation (1991) 23 ALD 522 on the ground that it involved "a definite and frank injury at a particular date" and should not be applied "in cases of a different nature, such as the present, where the pathological injury pre-dates the claim for permanent impairment, and the actual onset of functional impairment, by a significant period of time". The reasons for decision continue:

"24. The Tribunal considers that the (Commission) has placed
undue emphasis on the word 'impairment', whilst neglecting the
question of permanency. Section 24(2) of the 1988 Act is plain in
stating that in determining whether an impairment is permanent,
regard should be had to the duration of the impairment, the
likelihood of improvement, whether the employee has undertaken all
reasonable rehabilitative treatment for the impairment and any
other relevant matters. It hardly seems necessary to have regard
to the Guide to explain that this does not mean that an impairment
is permanent from the date of pathological damage, as contended by
the (Commission). Nevertheless, to be absolutely clear, adopting
the words of the Guide, the Tribunal is satisfied and finds that -
'An impairment will generally be regarded as permanent when
the recovery process has been completed, i.e. when the full
and final effects of convalescence, the natural healing
process and active (as opposed to palliative) medical
treatment has been achieved.'
Further, the Tribunal is satisfied and finds that emphasis must be
given to loss of function, rather than pathological damage, when
looking at impairment and whether the recovery process has been
completed. Certainly, the legislative definition of 'impairment'
lends itself to ambiguity. The Tribunal is satisfied that the
Guide resolves this ambiguity in favour of the functional approach
and further that it is not appropriate when ambiguity exists to
adopt a strictly legalistic approach, given the remedial nature of
the legislation (see comments to this effect in Re Ticsay and the
Commission for the Safety, Rehabilitation and Compensation of
Commonwealth Employees, Decision No.7836, 18 March 1992, at pages
8-9)."

28. In reaching its conclusion that the respondent's permanent impairment commenced after 1 December 1988, the Tribunal said:

"26. The Tribunal, in considering the oral evidence of Doctors
Duncan, Katekar and Roebuck, has been careful to distinguish
whether they refer to functional 'loss of use' or 'pathological
damage'. The Tribunal is satisfied their evidence is that it
would not be reasonable to assess impairment to be permanent until
a point of stabilisation is reached after the operation. The
Tribunal notes that when their evidence suggests permanency before
1 December 1988 they clearly are referring to damage, rather than
functional impairment. The Tribunal is further satisfied that
stabilisation occurred 9-12 months after the operation. Although
the evidence was that stabilisation usually occurred 12 months
after an operation, Dr Katekar's evidence suggested that in (Mr
Brennan's) case a degree of stability was reached after about 9
months.
27. Dr Newcombe's opinion, in October 1988, that another
operation was necessary and (Mr Brennan's) general condition would
remain unchanged, at first glance might seem to go against the
view of stabilisation occurring in 1989. That is, it might be
assumed, if he was prepared to perform a second operation at this
stage, that he considered there would be no further recovery, and
therefore stabilisation had already occurred. The Tribunal
considers it would be speculative to take this view of his report,
as he may have been talking in terms of damage rather than
functional impairment. Following any operation where bones and
attached muscles are included in the surgical process it is normal
to expect a considerable period of time to elapse before optimum
function returns. Unfortunately, Dr Newcombe did not give oral
evidence and it would therefore be unsafe to prefer his evidence,
which may or may not be different to the oral evidence given by
the other doctors. In addition, the Tribunal is satisfied that, in
giving their oral evidence, the other doctors were aware of Dr
Newcombe's views."

29. Compared with the provisions contained in the 1971 Act, the 1988 Act extended the circumstances in which lump sum compensation was payable in respect of an injury (as defined) suffered by an employee. Under the 1971 Act, lump sum compensation was relevantly payable only if the injury resulted in the total or partial loss of, or the total or partial loss of the efficient use of, a part of the body or faculty of the limited kind specified in s.39 of that Act and only if that loss was permanent, that is to say, likely to continue indefinitely. Under the 1988 Act, an employee was entitled to receive lump sum compensation if the injury (an expression defined more broadly than the corresponding expression in the 1971 Act) resulted in impairment which was likely to continue indefinitely, such impairment being referred to in the Act as "permanent impairment". The concept of "impairment" was given the broadest definition to mean "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".

30. Reference has already been made to the transitional provisions (Part X) included in the 1988 Act consequent upon the repeal of the 1971 Act. Those provisions began with the general statement (s.124(1)) that, subject to Part X, the 1988 Act applied in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day, 1 December 1988. The expression "injury" was defined in s.4(1); "loss" was defined in that subsection but only in relation to property used by an employee; "damage" was not defined. It would seem, however, that the expression "loss or damage suffered by an employee" in s.124(1) was wide enough to include any loss or damage within the definition of "impairment" in s.4(1) of the 1988 Act. The further general statement in s.124(1A) that a person was entitled to compensation under the 1988 Act in respect of an injury, loss or damage suffered before the commencing day if compensation was or would have been, payable to the person in respect of that injury, loss or damage under, inter alia, the 1971 Act was also expressed to be subject to Part X. It was, therefore, necessary to have regard to the other provisions of Part X in order to determine whether, in the circumstances of the particular case under consideration, compensation was payable to the employee under the 1988 Act.

31. Under s.124(2), a person was not entitled to compensation under the 1988 Act in respect of an injury loss or damage suffered before 1 December 1988 if compensation was not payable in respect of that injury, loss or damage under the statutory provisions that were in force when the injury, loss or damage was suffered.

32. The general scope and the effect of the transitional provisions were considered by the Tribunal in Re Willis and Australian Telecommunications Commission (No.2) (1990) 11 AAR 348 and by Lockhart J in Behan v Australian Telecommunications Corporation [1990] FCA 502; (1990) 26 FCR 337. In Re Willis, the Tribunal, after referring to various provisions of the 1988 Act and examining in some detail the provisions of Part X thereof, said (at p 356 of the report):

"What appears to us is that when the provisions of Pt X are read
as a whole it is plain that an employee's entitlement to
compensation in regard to a pre-existing injury and the obligation
of the relevant authority to pay compensation to an employee is
ascertained according to the provisions of the 1912 Act, the 1930
Act or the 1971 Act whichever was in force at the time the
entitlement or the liability arose. We do not consider that
ss.124(1) or 124(2) requires entitlement or liability to be
further ascertained by application, for example, of the
entitlement provisions (such as ss.14, 19 or 24) of the 1988 Act.
On the view we take a person is entitled to compensation in
respect of injuries which pre-existed the commencing day on the
same legal basis whether or not that person's claim for
compensation has been completed before or after the commencing
day."

Later in its reasons for decision, the Tribunal said (at p 359):

"In regard to s.124 we are of the opinion that a clear expression
of legislative intent can be found. That intent is that
entitlement to compensation in respect of pre-existing injuries is
to be ascertained according to the entitlement provisions of the
predecessor Act which was in force at the time the relevant
'injury, loss or damage' was suffered."

In Behan v Australian Telecommunications Corporation, Lockhart J, after referring to what had been said by the Tribunal in Re Willis and Australian Telecommunications Commission, said (at p 342 of the report):

"The transitional provisions of the 1988 Act contain fairly
elaborate provisions intended to keep alive under the 1988 Act
rights and liabilities accrued under previous Acts including the
1971 Act. If rights and liabilities existed before 1 December
1988 then they continue under the 1988 Act but in the sense that
entitlement to compensation in respect of injuries that were
suffered before 1 December 1988 is to be ascertained in accordance
with the entitlement provisions of the earlier legislation in
force at the time the injury was suffered. This is the effect in
my opinion of s.124. There is no need to resort to s.8 of the
Acts Interpretation Act because rights and liabilities accrued
before 1 December 1988 are kept alive under the umbrella
provisions of s.124 itself. I agree with the decision in Re
Willis that the entitlement provisions of the 1971 Act are made
applicable by reason of the operation of s.124 of the 1988 Act. I
agree also with Re Willis that it is not correct to interpret
s.124 of the 1988 Act as requiring entitlement to compensation to
be determined under the 1971 Act up to 1 December 1988 and
thereafter under the 1988 Act. The Tribunal in Re Willis
correctly rejected the contrary approach adopted in Re Farhat v
Australian Postal Commission (1989) 9 AAR 523 (note); 16 ALD 712
and other decisions of the Tribunal which follow Farhat.
The rights and liabilities of the applicant and the ATC are
therefore to be ascertained according to the 1971 Act except to
the extent that the transitional provisions of the 1988 Act may
override them ..."

33. In Australian Telecommunications Corporation v Willis [1993] FCA 53; (1993) 17 AAR 88, I dealt with another aspect of s.124 of the 1988 Act as follows (at pp 95-6):

"On the basis that the transitional provisions contained in the
1988 Act required that the respondent's claim for compensation be
considered by reference to the provisions of the 1930 Act, counsel
for the applicant (the successor to the Commission) submitted that
the Tribunal had failed to give full effect to s.124(2) of the
1988 Act. That provision ... provides that a person in the
situation of the respondent is not entitled to compensation under
the 1988 Act in respect of an injury suffered after the
commencement of the 1930 Act but before the commencement of the
1971 Act if compensation was not payable in respect of that injury
under the 1930 Act as in force when the injury was suffered. It
was submitted that compensation was not payable under the 1930 Act
as in force when the injury was suffered unless it was determined
not only that the employee suffered the injury in the course of
his employment but also that, while the provisions of the 1930 Act
remained in force, incapacity for work resulted from that injury.
It being the position that the respondent did not assert that any
incapacity for work had resulted from the injuries suffered in
1956 and 1957 during the period that the 1930 Act remained in
force, counsel for the applicant submitted that the claim for
compensation could not succeed and that the decision of the
Tribunal should be set aside and the decision under review by that
Tribunal affirmed.
I am unable to accept that submission as, in my opinion, it
misconceives the true meaning and effect of s.124(2) of the 1988
Act. During the period that the 1930 Act was in force, it was
necessary for an employee who claimed that an amount of
compensation in accordance with the First Schedule to that Act was
payable to him to establish at least two matters. He had to show
that he had suffered "personal injury by accident arising out of
or in the course of his employment by the Commonwealth" and that
he was totally or partially incapacitated for work by that injury.
The purpose of s.124(2)(b) is to ensure that compensation is not
payable under the 1988 Act in respect of an injury suffered during
the period when the 1930 Act was in operation unless the
circumstances are such that, had the 1930 Act, in the form in
which it stood at the time the injury was suffered, remained in
operation, compensation would have been payable under that Act.
While the operation of the provision is expressly conditioned upon
the injury relied upon having been suffered during the period that
the 1930 Act was in operation, the provision does not require that
the incapacity for work resulting from that injury should have
occurred during that period. The provision does not expressly so
provide and no sufficient reason has been advanced why such a
requirement should be implied. To construe the provision in the
manner contended for by the applicant would, so it seems to me,
defeat the evident intention of the Parliament. In my opinion,
there is nothing in the decision in Blackman v. Australian
Telecommunications Corporation (1990) 12 AAR 11 relied upon by
counsel for the applicant that requires a different conclusion to
be reached."

34. Blackman v Australian Telecommunications Corporation (1990) 12 AAR 11, a decision of a Full Court of this Court, was concerned with s.124(3) of the 1988 Act, one of the provisions relevant to the resolution of the issue arising in the present case. Mr Blackman had been employed as a motor mechanic in the Postmaster-General's Department from 1946 until 1960 when he was retired medically unfit on the ground of disabilities related to war service. Throughout his employment with the Postmaster-General's Department he had been repeatedly exposed to asbestos. In November 1988, he was diagnosed as having mesothelioma. The Tribunal had found that the disease, which is a malignant and fatal lung condition commonly caused by asbestos, was contributed to, to the required extent, by his employment in the Department. Mr Blackman was unsuccessful in a claim under s.24(1) of the 1988 Act for compensation for a "permanent impairment", that decision being reached on the ground that any entitlement to compensation under the 1988 Act was destroyed by s.124(3) of that Act. The Court (Pincus, Foster and Hill JJ) had no doubt (see p 14 of the report) that, as Mr Blackman had, prior to 1 December 1988, been diagnosed as suffering from mesothelioma, there was, before that date, a permanent impairment within the meaning of the 1988 Act. It followed that, as the impairment occurred after the commencement of the 1971 Act and that Act did not provide for lump sum compensation in respect of mesothelioma, the application failed. At p 14, the Court said:

"The only substantial argument advanced by Mr Joseph for the
applicant, was that relevant 'permanent impairment' occurred after
as well as before the commencing date, and that that occurring
after brought s.24 into play.
There was some evidence before the Tribunal that the disease, and
therefore the degree of impairment, had generally worsened since
the condition was first diagnosed, in accordance with its natural
progress. It appears that treatment alleviated the effects of the
disease at one stage, but the applicant's overall condition has
tended to deteriorate. Mr Joseph's contention amounted to this:
although there is only one disease and, having regard to the
definition of injury in s.4(1), therefore only one 'injury', if
the impairment consequent upon it has worsened substantially after
the commencing date, then that worsening in itself constituted an
'impairment' within the meaning of s.124(3) occurring after the
commencing date.
If the contention on behalf of the applicant is correct, then each
time an impairment worsens significantly, there is a new
impairment within the meaning of the 1988 Act. We cannot read the
relevant provisions in this way. The scheme of the Act, in
particular of ss.24 and 25, is not that as a disease progresses,
the aggravation of its consequences constitutes a series of new
impairments, each giving rise to a separate liability to pay
compensation. If that were so, then small increments of
aggravation of the impairment would not be compensable at all; for
under s.24(7) there is no right to compensation if the degree of
permanent impairment is determined to be less than 10 per cent.
As an impairment worsens, further rights to compensation may
accrue under s.25, but not because there is another distinct
impairment.
To achieve the result that a variation (substantial or otherwise)
of the degree of impairment should be treated as a new impairment
for the purposes of s.124(3), different language would have been
necessary. The natural reading of 'impairment ... that occurred
before the commencement date' is such as to cover the case in
which there is but a single impairment, which came into existence
before the commencing date and thereafter fluctuated in intensity
but generally worsened."

Earlier in the judgment the Court referred to s.25 of the 1988 Act and said (at p 13):

"It can be seen that the need for more than one assessment of the
degree of permanent impairment resulting from an injury might
arise because of some difficulty in assessing the severity of a
stationary condition or because the condition for which
compensation is claimed changes in its severity. In our view, the
Commission may, in the latter case, make an interim determination
reflecting the degree of permanent impairment at one point in the
progress of the condition and then a further determination or
determinations as the condition worsens. That is, of course,
subject to s.25(4) quoted above, which limits the right to further
compensation after a 'final assessment'. Sections 24 and 25 do not
appear to treat the situation just described, in which an
impairment grows worse as time passes, as producing a series of
separate permanent impairments, and that is a matter which it is
necessary to take into account in construing s.124(3)."

35. There is an initial question whether the word "impairment" where it secondly appears in s.124(3) is to be read as meaning "permanent impairment". The view may be taken that it is sufficient, in order to disentitle a person to compensation under s.24 or 25 in respect of a permanent impairment, that the person suffered an impairment (as defined in s.4(1)) before 1 December 1988 whether or not it is possible to say of that impairment that, prior to that date, it was a permanent impairment in the sense that it was likely to continue indefinitely. The alternative view is that it is necessary, in order to disentitle the person to such compensation, that prior to that date the impairment had become permanent in the sense mentioned.

36. To describe an impairment, as s.124(3) does, as having "occurred" before the commencing date is somewhat curious. The relevant event which "occurs" is the event by reason of which the person suffers injury. An impairment is relevant if it is the result of the injury (see ss.14 and 24). It is clear from the decisions to which I have referred that the legislative intention disclosed by the provisions of Part X of the Act was, in the terms in which the decision of the Tribunal in Re Willis and Australian Telecommunications Commission (No.2) is expressed, "that entitlement to compensation in respect of pre-existing injuries is to be ascertained according to the entitlement provisions of the predecessor Act which was in force at the time the relevant 'injury, loss or damage' was suffered". Might not the legislative intention have been that the same result should follow where, before 1 December 1988, the injury had resulted in an impairment as defined, whether or not that impairment could, prior to that date, be said to be likely to continue indefinitely? Neither party, however, espoused that view of the provision, the matter being argued on the basis that the respondent was not disentitled to compensation under s.24 or 25 of the 1988 Act unless there were a positive finding that the impairment relied upon had become permanent in the relevant sense prior to 1 December 1988.

37. Accepting that that is the true meaning and effect of s.124(3), it is necessary to turn to the question whether the Tribunal erred in law in reaching the conclusion that the impairment was not permanent in the relevant sense until after 1 December 1988. In my opinion it did so for the reasons which I will state.

38. Compensation was payable under s.24 of the 1988 Act only if an affirmative answer was given to each of the following questions -

(a) Did the employee suffer an injury as defined in s.4(1)?
(b) Did that injury result in loss or damage constituting an
impairment as defined in s.4(1)?
(c) Was that loss or damage likely to continue indefinitely so
as to amount to "a permanent impairment"?

Given an affirmative answer to those three questions, the amount or compensation payable in the particular case depended upon the degree, expressed as a percentage, of what was referred to in s.24(5) as the permanent impairment of the employee resulting from the injury. Except where the impairment resulted from the loss of, or injury to, a finger or toe, an amount of compensation was not payable unless the degree of permanent impairment of the employee resulting from the injury was 10% or more. The degree of permanent impairment might be the subject of interim determinations or a final determination (s.25). Interim determinations might be made from time to time with consequent adjustment of the amount of compensation payable. Once a final determination of the degree of permanent impairment of the employee was made, no further amounts of compensation were to be payable in respect of a subsequent increase in the degree of impairment unless the increase was 10% or more (s.25(4)).

39. In the course of its reasons for decision, the Tribunal expressed the opinion that the definition of "impairment" in s.4(1) of the 1988 Act "lends itself to ambiguity". The Tribunal appears to have taken the view that the definition should be read as if it did not refer to pathological damage to any part of the body but only to loss of function. No satisfactory reason has been advanced to support this view and I am unable to agree with it. I should add that, in my opinion, there is nothing in the provisions contained in the Guide to the Assessment of the Degree of Permanent Impairment that supports the view taken by the Tribunal. But, even if the Guide did purport to qualify the definition, its provisions could not properly be relied upon as an aid to the construction of the statutory provision.

40. A careful reading of s.24 of the 1988 Act suggests that the word "impairment" where it appears in s.24(1) is to be given the meaning set out in the definition of that expression in s.4(1). It is, as I have said, a very wide definition but that is consistent with the obvious legislative intention to widen the scope for lump sum payments that obtained under the 1971 Act. However, when one turns to the provisions for determining the amount of compensation payable where it has been found that the employee has suffered an injury which has resulted in an impairment as defined and that such impairment is likely to continue indefinitely, a different concept emerges. In determining the amount of compensation payable the relevant criterion is "the impairment of the employee" and reflects the underlying principle that the amount of compensation that is payable is to be ascertained not by reference to the particular loss or damage resulting from the injury but by reference to the effect on the whole person of the employee in terms of his personal efficiency in the "activities of daily living" compared with that of a normal healthy person. It is in making that assessment that emphasis is to be placed not on the pathological damage suffered by the employee but upon the loss of function flowing from the loss or damage resulting from the relevant injury.

41. It is implicit in the provisions to which I have referred that an affirmative answer might be given to the question whether the injury to the employee had resulted in loss or damage that was likely to continue indefinitely quite independently of the process of determining, whether on an interim or final basis, the degree, expressed as a percentage, of permanent impairment of the employee resulting from the injury. Whether it is possible to do so will depend upon the circumstances of the particular case. In some cases the question could be answered as at the date of the injury. In others, considerable time might elapse and differing medical opinions might need to be evaluated before an answer could be given. But it would amount to error of law to conclude that that question cannot be answered until the situation has been reached where a final determination can be made of the degree of permanent impairment of the employee. A fair reading of the Tribunal's reasons for decision leads me to conclude that it fell into error in this regard. One example of the Tribunal's approach is to be found in par.21 of its reasons where reference is made to the need to determine when "the degree of impairment" rather than the impairment itself became permanent in the defined sense. Other examples are to be found in the Tribunal's treatment of the medical evidence before it. In particular, it led the Tribunal to reject the evidence of Dr Newcombe.

42. It was not disputed that between 1972 and 1987 the respondent suffered injuries to his back which arose out of, or in the course of, his employment. It was also not disputed that those injuries resulted in an impairment as defined in s.4(1) which was likely to continue indefinitely. On the basis on which the matter was argued before the Tribunal, the question was whether it was proper to conclude that that state of affairs existed prior to 1 December 1988.

43. The situation that obtained prior to 1 December 1988 was that the respondent had,in the course of his employment, suffered injury to his back, that the injury had resulted in damage to his back diagnosed as marked disc protrusion at the L5-S1 level and requiring a discectomy to be performed, that Dr Newcombe carried out that operation, that the operation was not successful in relieving the condition and that the respondent had declined to undergo further surgery. The question for the Tribunal was whether in those circumstances it could properly be said prior to 1 December 1988 that the respondent's impairment, namely damage to his back, was likely to continue indefinitely. In my opinion, the Tribunal failed to answer that question. The question that the Tribunal answered was whether it was appropriate, prior to 1 December 1988, to make a final determination of the degree, expressed as a percentage, of the impairment of the respondent resulting from the injuries to his back. It concluded that it was not appropriate to make such a determination until some considerable time after the operation performed on the respondent's back on 8 June 1988. The Tribunal may well have been correct in reaching that conclusion but that was a different question from the question that the Tribunal was required to answer and the circumstance that no final determination of the degree of impairment could be made prior to 1 December 1988 did not necessarily negative an affirmative answer being given to the true question posed for its determination.

44. Not only did the Tribunal fail to consider the question to which I have referred, but its failure to do so led it to assign for its failure to give any weight whatsoever to the medical report of Dr Newcombe who had carried out the operation or the respondent reasons which involve an error of law. It gave no weight to that report because, in the Tribunal's view, Dr Newcombe "may have been talking in terms of damage rather than functional impairment". Yet damage to the respondent's back was the very impairment on which the respondent's claim for compensation was founded. In my opinion, the Tribunal also erred in deciding that it "would be unsafe" to prefer his evidence simply on the ground that the parties had been content to allow his report to be received by the Tribunal without him giving oral evidence or being required to attend for cross-examination.

45. I am also of opinion that the Tribunal erred in law in relying on the provisions of the Guide to the Assessment of the Degree of Permanent Impairment as an aid to the proper construction of the statutory provisions. I have already referred to that aspect of the matter and need say no more on that subject.

46. It follows, in my opinion, that in the respects to which I have referred, the Tribunal erred in law. In consequence, its decision must be set aside and the matter remitted to the Tribunal for further consideration and determination according to law. Counsel for the applicant having informed the Court that an order for costs was not sought, there will be no order in that regard.