In Fellowes v Military Rehabilitation & Compensation Commission  HCA 38, the High Court overturned the decisions of the Full Federal Court and the Administrative Appeals Tribunal (AAT) to allow a claim for compensation for a second injury which effectively gave rise to the same level of permanent impairment as an injury for which the claimant had already received compensation.
In 1986, Ms Fellowes suffered an injury to her left knee. In 1987, she suffered a separate injury to her right knee.
Ms Fellowes lodged a claim for compensation under the Safety, Rehabilitation & Compensation Act 1988 (SRC Act) for her left and right knee conditions, including claims for permanent impairment in respect of each injury.
In two separate reviewable decisions, the Military Rehabilitation and Compensation Commission (Commission) accepted liability for Ms Fellowes' left knee and right knee conditions. It also accepted that Ms Fellowes suffered 10% whole person impairment in respect of her left knee injury pursuant to Table 9.5 of the First Edition of the Comcare Guide for the Assessment of the Degree of Permanent Impairment (Guide).
In a separate decision, the Commission rejected liability to pay compensation for Ms Fellowes' right knee condition on the basis that she had already been compensated under Table 9.5 for 10% impairment for her left knee condition.
This determination was affirmed on reconsideration and Ms Fellowes applied to the AAT for review of the decision.
The AAT affirmed the reviewable decision denying Ms Fellowes compensation for permanent impairment for her right knee injury. Notably, Deputy President Hack applied the decision in Comcare v Van Grinsven (2002) 117 FCR 169 (Van Grinsven), distinguishing it from the decision of the High Court in Canute v Comcare (2006) 226 CLR 535 (Canute).
The AAT stated that the effect of the Guide was that two or more separate injuries that give rise to the same level of impairment result in a single impairment rating.
Ms Fellowes then appealed to the Full Federal Court, which upheld the AAT's decision, determining that Ms Fellowes was not entitled to compensation for permanent impairment for her right knee injury.
Ms Fellowes was granted special leave to appeal to the High Court.
The High Court's decision
In a joint judgment, Justices Hayne, Heydon, Crennan and Bell, in the majority, allowed the appeal and set aside the orders of the Federal Court and the decision of the AAT.
In a dissenting judgment, Justice Kiefel dismissed the appeal.
The majority noted that the matter turned on the competing arguments as to how the word 'impairment' should be read in the context of section 24(5) of the SRC Act.
Ms Fellows submitted that, as each injury led to a separate impairment, compensation should be awarded for each impairment. The Commission submitted that what was to be determined under section 24(5) was the degree of permanent impairment as a whole person as fixed by Table 9.5 of the Guide rather than as a result of the individual injuries.
In this regard, the majority noted the decision in Canute in which the Court acknowledged that, textually, the SRC Act assumes that an injury may result in more than one impairment and stated that it followed that more than one injury may result (and often will) in more than one impairment.
The majority further noted that, in Canute, it was also accepted that recourse should only be made to the criteria prescribed by the Guide once 'the key statutory criteria of the occurrence of an injury (which resulted in at least one permanent impairment) has been fulfilled'.
On this basis, the majority stated that the SRC Act hinges on the concept of injury and that 'impairment' should be identified in terms of the effect on bodily parts, systems or functions as a result of that injury and not as a whole person approach as submitted by the Commission.
The Commission submitted that assessment of impairment under the Guide required determination of impairment resulting from injury with reference to preexisting capacity for two reasons:
- The Guide repeatedly referred to 'whole person impairment'.
- The introductory section of the Guide stated 'where two or more injuries give rise to the same impairment a single rating only should be given'.
With regard to the first point, the Court noted that the reference in the guide to 'whole person impairment' did not direct attention to the effect of an injury or disease on the particular individual being assessed but instead, referred to the assessment of impairment with reference to the functional capacities of a normal person.
With regard to the second point, the Court noted that this must be construed in the context of the definition of 'impairment' under the SRC Act. That is, the effect on particular bodily parts, systems or functions as a result of a specific injury and not as a result of pre-existing capacity or, as the case may be, incapacity.
The majority stated that the text of the Guide is to be construed as providing that the assessment of whole person impairment requires comparison with the functional capacities of a normal healthy person rather than the capacities of the particular applicant as they existed before the subject incident.
In this regard, the Court noted that, on its proper construction, section 24(5) of the SRC Act refers to the degree of impairment that results from the injury resulting in the 'impairment' identified at section 24(1) and that the uses of the term 'impairment' at section 24(5) and 24(1) were not to be interpreted as having different meanings.
The Court found that the decision of the Full Federal Court in Van Grinsven (which was relied on by the AAT and the Federal Court in their decisions with respect to Ms Fellowes' claim) was wrongly decided and should be overruled.
Accordingly, the Court allowed the appeal with costs and ordered that the decision of the AAT be set aside and replaced with a decision directing the Commission to determine the amount of compensation payable to Ms Fellowes for her right knee injury which resulted in a 10% permanent impairment pursuant to Table 9.5 of the Guide.
The practical effect of the decision is that employees may be entitled to receive more than one payment of compensation for permanent impairment under Table 9.5 where they suffer separate injuries to their lower limbs.
Although this decision deals with the interpretation of Table 9.5 of the First Edition of the Guide, Table 9.7 of the Second Edition of the Guide also deals with lower limb function as a whole. Consequently, the High Court's decision suggests that employees will be entitled to seek two awards of compensation for permanent impairment under these Tables for separate injuries affecting each leg.
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