Donato and Comcare [2002] AATA 83 (13 February 2002)

Last Updated: 18 February 2002

DECISION AND REASONS FOR DECISION [2002] AATA 83

ADMINISTRATIVE APPEALS TRIBUNAL Nº V2000/684

GENERAL ADMINISTRATIVE DIVISION

Re: CARL DONATO

Applicant

And: COMCARE

Respondent

DECISION

Tribunal: G.D.Friedman, Member

Date: 13 February 2002

Place: Melbourne

Decision: The Tribunal affirms the decision under review.

(sgd) G.D. Friedman

Member

COMPENSATION - bilateral avascular necrosis of the hips - whether permanent impairment before 1 December 1988 - whether 1971 Act or 1988 Act applies

Compensation (Commonwealth Government Employees) Act 1971 s39

Safety, Rehabilitation and Compensation Act 1988 ss4, 24,124

Comcare v Levett (1995) 38 ALD 518

Department of Defence as Delegate of Comcare v West

Federal Court, 31 July 1998, 892/1998

Hoyle v Telstra Corporation Limited (1997) 75 FCR 390

Re Morley and Comcare AAT (1996) 40 ALD 725

REASONS FOR DECISION

13 February 2002 G.D.Friedman, Member

1. This is an application by Carl Donato (the applicant) for review of a determination by Comcare (the respondent) dated 20 May 2000. The respondent affirmed a decision dated 20 March 2000 that the applicant was not entitled to compensation under s24 of the Safety, Rehabilitation and Compensation Act 1988 (the 1988 Act) in accordance with s124(3)(b)(iii) of the 1988 Act and ss39(4) and (14) of the Compensation (Commonwealth Government Employees) Act 1971 (the 1971 Act) in respect of industrial asthma with sequela of bilateral avascular necrosis of the hips (necrosis) suffered on 13 November 1986.

2. At the hearing of this matter on 5 February 2002 Mr J. Ferwerda of Counsel represented the applicant and Mr C. Miles of Counsel represented the respondent.

3. The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975, together with three exhibits lodged by the applicant (Exhibits A1 to A3) and one lodged by the respondent (Exhibit R1).

BACKGROUND

4. The applicant was born on 23 May 1946. On 15 December 1967 he commenced employment with the Department of Veterans' Affairs (the Department) as a prosthetist. On 29 June 1987 he submitted a claim for compensation in which he stated that he suffered from industrial asthma on 13 November 1986 as a result of exposure to resins in the course of his employment. The respondent accepted liability.

5. Following steroidal medication to treat his asthma, the applicant developed necrosis. The respondent accepted liability for this condition. The applicant ceased employment on 9 March 1992. On 20 March 2000 the respondent determined that the applicant was not entitled to receive compensation under the 1988 Act on the grounds that any impairment suffered by the applicant as a result of necrosis became permanent before 1 December 1988. The amount of compensation payable should therefore be assessed under s39 of the 1971 Act.

6. On 20 May 2000 the respondent made a determination affirming the primary decision. On 9 June 2000 the applicant applied to the Tribunal for review of the determination.

EVIDENCE

7. The applicant told the Tribunal that he migrated to Australia in 1956 from Italy. He said that after joining the Department he obtained qualifications as a prosthetist. He said his duties involved the manufacture and fitting of prosthetics and orthotics, and he worked with resins, fibreglass and other industrial materials that caused fumes and dust. He stated that he was not issued with protective clothing apart from safety glasses.

8. The applicant said that enjoyed his work, but in 1986 he began to experience breathing problems, and in November 1986 was hospitalised and diagnosed with occupational asthma, for which he was prescribed steroids. He had further periods of hospitalisation in 1987 and he returned to work on light duties in other areas of the Department, but he ceased work in 1988. In about September 1988 the applicant complained of pain in his left hip and a limp, and x-rays revealed necrosis of the left femoral head, together with evidence of a similar condition in the right femoral head. On 13 April 1993 he underwent surgery for a left hip replacement, and on 6 October 1993 his right hip was replaced.

9. The applicant told the Tribunal that the surgery helped ease the pain, but by that stage he had to change his life considerably as he had difficulty in walking, bending and performing simple household tasks as a result of restricted movement. He stated that he receives incapacity payments from the respondent, and spends his time at home. He no longer engages in hobbies such as fishing or attends sporting events because of the pain and the inconvenience caused by his difficulty in climbing stairs or walking more than short distances.

10. Under cross-examination the applicant agreed that in 1987 efforts to attend rehabilitation courses or return to work in administrative areas of the Department had proved to be unsuccessful. The applicant agreed that as a result of pain in his hip he had been examined in late 1988 by Dr D. Lewis, rheumatologist, who diagnosed necrosis.

11. In a written report dated 14 September 1999 Mr D. Young, orthopaedic surgeon, stated that the necrosis was directly related to the industrial asthma suffered by the applicant. He said that necrosis of the left hip was diagnosed in 1988 but no treatment was undertaken at that time, and that in 1992 the applicant developed symptoms in his right hip. In oral evidence Mr Young told the Tribunal that assessment of any long-term loss of function could only be determined about twelve months after hip replacement surgery. Under cross-examination Mr Young agreed that in 1988 there were signs of necrosis of the right hip. He said that in 1988 necrosis of the left hip was likely to become permanent, although the situation regarding the right hip was not certain. He assessed the applicant according to Table 9.2 of the Guide to the Assessment of the Degree of Permanent Impairment (the Comcare Guide) published by the respondent, and concluded that there was a minimal percentage of impairment of the whole person.

12. In a written report dated 21 October 1999 Mr D. Conroy, surgeon, stated that he examined the applicant on 21 October 1999 and found that the history and examination were consistent with surgically treated necrosis of the hip joints, with a satisfactory result. He assessed the applicant according to Table 9.5 of the Comcare Guide and concluded that there was a 20% impairment of the whole person. He assessed the applicant according to Table 9.2 at 10% impairment of the whole person for the left hip and 10% for the right hip. In oral evidence Mr Conroy told the Tribunal that the applicant's condition had stabilised about 12 to 18 months after the second hip replacement operation. Under cross-examination Mr Conroy agreed that, as at September 1988, the impairment in both hips was likely to be permanent.

13. In a written report dated 18 December 2000, Mr M. Shannon, orthopaedic surgeon, stated that he examined the applicant on 11 December 2000, and that the necrosis was diagnosed in September 1988. He said that the condition was established and permanent prior to December 1988 although the hip operations were not performed until 1993. He assessed the applicant according to Table 9.2 of the Comcare Guide, and concluded that there was a 10% impairment of each lower extremity. In oral evidence Mr Shannon told the Tribunal that symptoms of necrosis appeared in August/September 1988 and that deterioration would have occurred after that time. Under cross-examination Mr Shannon agreed that a number of outcomes were possible after the hip replacement surgery performed on the applicant.

CONSIDERATION OF THE ISSUES

14. Section 24 of the 1988 Act provides:

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

(2) For the purpose of determining whether an impairment is permanent, Comcare 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 Comcare under subsection (4), being an amount not exceeding the maximum amount at the date of the assessment.

(4) The amount assessed by Comcare and subsection (5).

(5) Comcare shall determine the degree of permanent impairment of the employee resulting from an injury and the provisions of the approved Guide.

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

(7) Subject to section 25, where Comcare 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.

15. In respect of permanent impairment that occurred before 1 December 1988, but while the 1971 Act was in force, s124 of the 1988 Act provides:

(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:

. . .

(b) the person was not entitled to receive compensation of a lump sum in respect of that impairment . . . :

. . .

(iii) 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:

. . .

(c) the 1971 Act as in force when the impairment or death occurred.

16. Mr Ferwerda, on behalf of the applicant, referred the Tribunal to Re Morley and Comcare (1996) 40 ALD 725, and to Comcare v Levett (1995) 38 ALD 518 in which the Full Federal Court concluded at p523:

. . .

The operation of s 24 of the 1988 Act is limited by s 124(3), properly construed, only when a permanent impairment occurred before the 1988 Act came into force.

17. At p522 the Court said:

It is to be remembered that s 24 concerns compensation for permanent impairment. That parliament intended to limit the broad operation of s24 is clear from the opening words of s124(3) which say that 'a person is not entitled to compensation under s 24 ...in respect of a permanent impairment...' However, the construction contended by the applicant is that the exclusionary effect of s124(3) is widened by the later use of the word 'impairment' unqualified by the adjective 'permanent'. The applicant submitted that s24 has no operation if an employee suffered an impairment, whether permanent or not, prior to the 1988 Act coming into force and that impairment was not compensable by a lump sum payment under the 1971 Act.

In our opinion, the language of s 124 does not sustain this construction; nor is it consistent with the purpose of the 1988 Act as a whole...The words 'being an impairment or death' in s124(3) follow two related phrases, namely, 'a permanent impairment' and 'the death of an employee'. The words 'an impairment or death' are a condensation and amalgamation of these two phrases. The entire phrase 'being an impairment or death that occurred before the commencing date' is intended to identify a permanent impairment or death with a particular characteristic; namely, it must have occurred before the commencement of the 1988 Act. Section 124(3) is intended to render s24 inapplicable to a permanent impairment that occurred while the 1971 Act was in force if either the employee had received a lump sum, or was not entitled to a lump sum for that permanent impairment. The 1971 Act did not speak in terms of impairment or permanent impairment. Nevertheless, the plain purpose of s 124(3) is to exclude the operation of s24 in the case of an employee who suffered a disability which, as described in the language of Pt III of the 1971 Act, was not compensable by a lump sum payment or, if it was, a lump sum was paid.

Under s4 of the 1988 Act the words permanent and impairment are defined as follows:

4(1) In this Act, unless the contrary intention appears:

permanent means likely to continue indefinitely.

impairment means 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.

18. Mr Ferwerda noted the Principles of Assessment at p3 of the Comcare Guide under the heading Impairment and Non-Economic Loss, which states:

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

Mr Ferwerda submitted that necrosis commenced in 1987 or 1988. He said that the evidence showed that the applicant's left hip collapsed before 1 December 1988 and that symptoms of necrosis of the right hip were evident before 1 December 1988. He referred to a report dated 7 October 1988 from Mr S. Bell, surgeon, to Dr Lewis, in which Mr Bell stated:

X-ray demonstrated avascular necrosis of the left hip with already some early collapse of the avascular segments. I felt that the right hip also demonstrated quite definite signs of avascular necrosis...and this was confirmed on the CT scan.

I feel that [at] this stage the first step should be a core biopsy/decompression operation for the right hip. Hopefully this will halt the avascular necrosis process and prevent collapse in this hip.

19. Mr Ferwerda submitted that the applicant had ceased employment by 1December 1988 and to some extent had symptoms of loss of function in his hips and legs. However he stated that the evidence strongly suggested that the range of movement available to the applicant, together with the suggestions about possible treatment for the right hip, demonstrated that the impairment was not permanent at that time.

20. Mr Ferwerda submitted further that in applying the factors in s24(2)(b) of the 1988 Act, the Tribunal should be satisfied that there has been considerable improvement in the applicant's general condition following the hip replacement operations in 1993, and that he undertook all reasonable rehabilitation measures at the appropriate time. In addition, after 1 December 1988 the applicant had not given up hope of returning to the workforce in some capacity. Mr Ferwerda said that the matter was not finalised until 6 December 1996, when a Return to Work Plan Closure form was completed by the respondent. At 1 December 1988 the treatment regime had not been completed and there was no permanent impairment within the meaning of the 1988 Act and the Comcare Guide. Therefore, s24 of the 1988 Act applied.

21. Mr Miles, on behalf of the respondent, referred to Hoyle v Telstra Corporation Limited (1997) 75 FCR 390 in which the Court noted that s39 of the 1971 Act provided that a loss of function of the lower limbs was included in the table in s39(4). However s39(14) states:

An amount of compensation referred to in this section is not payable in respect of an injury so long as the employee is, or is likely to become, totally incapacitated for work where the incapacity for work results, or, if it occurs, will result, in whole or in part from that injury.

Mr Miles submitted that if the applicant is totally incapacitated he is not entitled to compensation for permanent impairment, unlike the provisions of the 1988 Act, and he would be eligible for a lump sum or weekly payments, but not both.

22. The Tribunal was told that there was no dispute that the applicant was admitted to hospital in 1986 for treatment of asthma, and attempted unsuccessfully to return to work in 1987. Mr Miles noted that the applicant ceased his normal duties on 23 March 1987. He attended his place of employment on modified duties for several weeks until August 1988. He has not worked since then.

23. Mr Miles submitted that the applicant has been paid for total incapacity under s39(14) of the 1971 Act and, with the exception of several months, has been totally incapacitated since March 1987. He said that the applicant would not be able to work again. He stated that by October 1988 necrosis of the left hip was clearly evident, and there were definite signs of necrosis of the right hip. Mr Miles said that at that time the applicant was permanently impaired and that hip replacement surgery would probably be required. He submitted that any contact with rehabilitation programs did not change the situation because alternative employment could occur whilst a person was classified as permanently impaired.

24. In Department of Defence as Delegate of Comcare v West Federal Court, 31 July 1998, 892/1998 the Full Federal Court considered the question of whether deterioration in a permanent impairment can constitute a different impairment. Mr Miles submitted that West is authority for the proposition that if there has been a change in impairment, then this cannot be considered to be new impairment. He said that in this case the need for hip replacement surgery does not constitute a new impairment.

25. The Tribunal takes into account the relevant documents, oral evidence and submissions in reaching its decision. The Tribunal finds the applicant to be a truthful witness and accepts his evidence about the onset of asthma and the resultant necrosis of both hips following prescribed steroid use.

26. The Tribunal accepts the medical evidence that before 1 December 1988 the applicant had been diagnosed with necrosis of the left hip, and that there were clear indications of necrosis of the right hip. The Tribunal also accepts that at that stage the applicant was unable to resume his occupation as a prosthetist. Although there was a suggestion that the applicant undergo decompression of the right hip, the only realistic option open to him was hip replacement surgery, which eventually occurred in 1993.

27. The Tribunal takes into account the evidence from Mr Young that any assessment of a long-term loss of function could only occur after hip replacement surgery. However, the Tribunal notes that on the available material, before 1 December 1988 the applicant was in severe pain. He had difficulty walking and standing, suffered muscle wasting, and was unable to continue as a prosthetist. The Tribunal accepts the written evidence of Mr Bell that as at 6 October 1988 the necrosis of the left hip was quite a serious condition and he will require ongoing orthopaedic management for some time. The Tribunal also accepts the evidence from Mr Conroy that as at September 1998 the impairment in both hips was likely to be permanent, and from Mr Shannon that the condition of necrosis was established and permanent as at 1 December 1988.

28. In applying these findings to the relevant definitions in s4(1) of the 1988 Act, the Tribunal is satisfied that loss of use of, or damage to, the left hip constitutes an impairment, particularly when measured against its effect on personal efficiency in the activities of daily living in comparison with a normal healthy person (p3 of Comcare Guide). Further, the Tribunal concludes that before 1 December 1988 the condition of necrosis of the left hip was likely to continue indefinitely. The Tribunal also takes into account the factors listed in s24(2) of the 1988 Act and finds that the impairment was likely to remain for a considerable period, his condition was unlikely to improve markedly, and the applicant took some steps to undertake rehabilitative treatment. In view of these findings, the Tribunal concludes that the impairment was permanent.

29. The Tribunal accepts the submission by Mr Miles that later attempts at rehabilitation would not affect the conclusion regarding permanent impairment, and that hip replacement surgery is not a new impairment.

30. Consequently the Tribunal finds that the impairment suffered by the applicant as a result of bilateral necrosis of the hips became permanent before 1 December 1988, and he did not suffer a new impairment after that date. Therefore any amount of compensation payable to the applicant should be assessed in accordance with the 1971 Act, and he has no entitlement to compensation under s24 of the 1988 Act.

DECISION

31. The Tribunal affirms the decision under review.

I certify that the thirty-one [31] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Member

(sgd) Catherine Thomas

Clerk

Date of Hearing: 6 February 2002.

Date of Decision: 13 February 2002

Counsel for the applicant: Mr J. Ferwerda

Solicitor for the applicant: Ryan Carlisle Thomas

Counsel for the respondent: Mr C.Miles

Solicitor for the respondent: Tress Cocks & Maddox