Australia: Permanent Impairment Compensation

Last Updated: 17 November 2008
Article by James McIntyre

In Fellowes and Military Rehabilitation & Compensation Commission [2008] FCAFC 140, the Full Federal Court considered a claim for permanent impairment compensation for a second injury which gave rise to the same level of permanent impairment as an earlier injury for which compensation had already been received.


In 1986, Ms Fellowes suffered an injury to her left knee. In 1987, she suffered an injury to her right knee.

Ms Fellowes lodged a claim under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) for her left knee condition, including a claim for permanent impairment compensation. On the same date, Ms Fellowes also lodged a claim for her right knee condition, including a claim for permanent impairment compensation.

Both claims were disallowed in the first instance.

A reviewable decision subsequently accepted liability for the left knee condition. It was also accepted that Ms Fellowes had 10% whole person impairment under Table 9.5 of the Guide for the Assessment of the Degree of Permanent Impairment (the Guide) for which she was entitled to permanent impairment compensation.

A further reviewable decision accepted liability for the right knee condition. However, a further determination rejected that there was liability to pay permanent impairment compensation for the right knee condition on the basis that Ms Fellowes had already been compensated for 10% whole person impairment under Table 9.5 of the Guide.

The determination was affirmed on reconsideration and Ms Fellowes applied to the Administrative Appeals Tribunal for a review of the decision.

The Tribunal affirmed the reviewable decision denying Ms Fellowes compensation for permanent impairment for the right knee condition. Deputy President Hack applied Comcare v Van Grinsven (2002) 117 FCR 169, distinguishing it from the decision of the High Court in Canute v Comcare (2006) 226 CLR 535. The Tribunal stated that the effect of the Guide was that two or more separate injuries that give rise to the same impairment result in a single impairment rating.

Ms Fellowes appealed against the Tribunal's decision. The appeal was heard by the Full Federal Court.


In a joint judgment, Justices French and Lindgren upheld the Tribunal's decision and determined Ms Fellowes was therefore not entitled to compensation for permanent impairment for her right knee injury.

Their Honours applied the decision of the Full Court in Van Grinsven.


In Van Grinsven, the facts were virtually identical to Ms Fellowes except that Mr Van Grinsven's earlier injury had been assessed as giving rise to 20% whole person impairment under Table 9.5 of the Guide. Their Honours noted that, in Van Grinsven, the Full Court found that under Table 9.5 it was clear that Mr Van Grinsven did not suffer from more than one impairment with respect to his two knee injuries. In that case the Full Court held that, for the purposes of Table 9.5, the two injuries only gave rise to one impairment, that is, 'Can rise to a standing position and walk but has difficulty with grades, steps and distances'.

Like the Tribunal, their Honours distinguished the decision of the High Court in Canute. In Canute, the High Court emphasised that the SRC Act does not create a liability to pay compensation with respect to impairment but with respect to injury and that 'injury' in this sense is used in terms of the effect of the specific injury on the employee's body rather than the overall impairment suffered by the employee as a result of the one workplace accident. Their Honours determined on the basis that, as both of the injuries in Canute gave rise to separate impairment under the Guide, the decision of the High Court did not apply in Ms Fellowes' case.


The question before the Full Court was whether the Military Rehabilitation & Compensation Commission was liable to pay compensation for permanent impairment to Ms Fellowes for her second injury beyond that which it had been liable to pay for her first injury.

The Court made the following observations with regard to permanent impairment for two knee injuries under Table 9.5:

  • Section 24 of the SRC Act provides that Comcare is liable to pay compensation for an injury suffered by an employee if the injury results in impairment and the degree of permanent impairment shall be assessed under the provisions of the approved Guide.
  • The Guide is based on the concept of 'whole person impairment' and that concept guards against 'double assessment' on the basis that where an employee suffers from more than one impairment, the values are not to be added, but combined, with the purpose of assessing the total effects of all impairment on the employee's whole bodily system or function.
  • Table 9.5 of the Guide reflects a view that the lower limb is special - 'in the activities of daily living the lower limbs function as a pair rather than independently of the other'.
  • The function of daily living of the lower limbs is the ability to walk.
  • Table 9.5 differs from Table 9.2, as Table 9.2 specifically refers to lower extremity and relates to levels of impairment with respect to particular parts of the lower extremity.
  • There was no suggestion in the Statement of Agreed Facts that the injury suffered by Ms Fellowes to her right knee was of such a nature as to take her level of permanent impairment up to the second level of impairment within Table 9.5 by causing her difficulty with distances.
  • The Court should follow its earlier decision in Van Grinsven.

Justice Moore, in a separate judgment, agreed with the majority but noted that it was difficult to reconcile the decision in Van Grinsven with that of the High Court in Canute.

His Honour agreed with the High Court's determination in Canute that compensation was to be paid with respect to the concept of 'injury' rather than that of 'impairment' as applied under the SRC Act. However, he found that, regardless of the decision in Canute, Van Grinsven could not be factually distinguished from Fellowes and he could not find that the decision of the High Court impliedly overruled that of the Federal Court in Van Grinsven. His Honour observed that in order to disagree with the decision of the Court in Van Grinsven he would have to find that the Court was plainly wrong and he was unable to do so.


The decision in Fellowes has brought an end to debate as to whether the decision in Canute had impliedly overturned the decision in Van Grinsven to entitle employees to receive more than one payment of compensation assessed under Table 9.5 of the Guide.

The decision effectively prevents employees from 'double dipping' with respect to compensation for a subsequent injury that does not give rise to any further level of impairment, but rather is at the same level as that of the pre-existing impairment for which compensation has already been paid.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

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