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Accident Compensation Cases

Welsh v Accident Compensation Corp (HC, 22/03/94)

Judgment Text

JUDGMENT OF FRASER, J 
FRASER, J
This is an application for special leave to appeal against a decision of the Accident Compensation Appeal Authority. As the grounds of appeal were thoroughly canvassed in the course of arguing the application the Court is asked, if leave is granted, to determine the substantive appeal as well. 
Although now replaced by the Accident Rehabilitation and Compensation Act 1992 the present proceedings are to be dealt with under the Accident Compensation Act 1982 (the Act): see s 135 of the 1992 Act. 
On 3 September 1984 the appellant injured his left wrist in an accident. He had been employed as a waterside worker and was also a soldier in the Territorial Service from which he derived a secondary income. As a result of his injury he was off work from the date of the accident until 21 February 1985 and again between 21 February 1986 and 17 March 1986. He then returned to work on the waterfront but did not resume his Territorial service which was eventually terminated. He has a permanent disability which has been assessed at 14.4% of total. 
The appellant has been paid appropriate compensation for loss of earnings on the waterfront and by way of lump sum for permanent disability but there have been ongoing difficulties about the compensation, if any, to which he is entitled as a result of his non-return to Territorial service. 
The appellant complains that for some time he could get no response at all from the Corporation on this aspect of the matter, but eventually by a letter dated 27 February 1990 his claim was rejected on the grounds that as Territorial service was voluntary and the pay received merely replaced lost civilian pay, there was no additional loss and no further compensation payable. 
Appellant contended that the basis of refusal was entirely erroneous and applied for a review pursuant to s 153 of the Act. The Review officer determined that the Army wages “should be taken into account when calculating his earnings related compensation for the period of incapacity but excluded from consideration a gratuity, an annual free travel warrant and an entitlement to a furniture loan. The words underlined by me assumed some significance as set out below. 
The appellant appealed to the Accident Compensation Appeal Authority on two grounds. The first was that the gratuity, travel warrant and furniture loan entitlements were wrongly excluded. The Authority agreed that the gratuity should have been included and directed that “the earnings related compensation during (appellants) periods of temporary loss of earning capacity are to be re-assessed to include that gratuity”. He regarded the travel warrant and the furniture loan entitlements, however, as merely potential earnings which the appellant might have received after completion of five years service and he accordingly confirmed that the Corporation was correct in excluding those items from the calculation of appellant's relevant earnings. 
The second ground of appeal was against the possible implication from the use of the phrase “the period of incapacity” that compensation in respect of incapacity for Army service would be payable only until the appellant returned to work on the waterfront. 
This ground of appeal was formulated as follows in a letter from appellant's solicitors dated 7 November 1991 which was expressed to be, and was accepted as, a formal notice of appeal under s 107 of the Act: 
“As we read the decision, it allows earnings from the Territorial Service to be taken into account ‘for the period of incapacity’. We are unsure what this phrase means, but believe it may somehow be limited to the period during which Mr Welsh was not able to return to his civilian employment. The loss of earnings related compensation for the military service is, of course, much greater. 
The evidence before the Review Authority will confirm that Mr Welsh went back to the Army to see if he could discharge his duties, but when it became apparent that his permanent disability precluded this, he was discharged. 
Our first ground of appeal would be against any form of determination which attempts to limit the earnings related loss to a period which equated to Mr Welsh's return to civilian employment. ”
In his memorandum of the appellant's points on appeal, submitted to the Authority, Mr Wright referred to this matter again and said: 
“Counsel for the appellant is concerned that this will be construed by the Corporation as only relating to the periods of hospitalization or time absent from his primary employment in 1984-1985 and again in 1986. The unchallenged evidence is that Mr Welsh endeavoured to resume his work as a Territorial Force soldier but because of physical disability was unable to do so. This existence of permanent physical disability is confirmed by medical report. There is no basis for concluding other than that it was probable Mr Welsh would have continued with this part time employment and would have been promoted. ”
And in a later section of the memorandum Mr Wright noted the appellant's request as being that the appeal be allowed and that the Corporation be directed to assess the appellant's loss of income for years including 31 March 1985 and subsequent arising from his loss of income as a territorial force soldier. 
The Authority interpreted this ground of appeal as set out in his decision as follows: 
“Although Mr Welsh was able to return to his civilian employment he was unable to return to his part-time work as a Territorial soldier because of permanent disability arising out of his wrist injury. He was thus entitled following his return to his civilian employment to continuing earnings related compensation in relation to his Territorial service. ”
In respect of it he examined and considered s 59 of the Act (dealing with earnings related compensation for temporary loss of earning capacity) and said: 
“As I have earlier pointed out the entitlement to earnings related compensation depends not upon a loss of earnings but upon a loss of earning capacity. Mr Welsh was certified as fit to resume full-time employment from 26 February 1985 and, following further surgery, from 17 March 1986. From those respective dates he was not suffering from a loss of earning capacity due to personal injury by accident. The fact that he was unable to continue as a Territorial did not mean that he had some other earning capacity on a part-time basis if he chose to pursue it. Indeed it may well be that his earnings increased as a result of his giving up Territorial service because, at least for future annual camps, he would not have been obliged to have taken leave without pay from the waterfront. As I have pointed out, however, the issue is not whether Mr Welsh suffered a loss of earnings because of his accident but whether he suffered a loss of earning capacity. On the facts of this case from the time he was certified as fit to resume full-time employment he had not suffered a loss of earning capacity. That aspect of the appeal is also dismissed. ”
Mr Wright's submission is that this did not deal with the appellant's case. It was not his contention that appellant should get earnings related compensation for loss of Army pay and incidentals under s 59 for the period following his return to civilian work. What he wanted was a direction that there be an assessment pursuant to s 60 of the Act which would not necessarily be limited to the period ending 17 March 1986 because of the terms of the Review officer's determination. The considerations under s 59 and s 60 are different and in his submission s 59 was not appropriate. Moreover in respect of that assessment he would want to be heard and if necessary exercise rights of review and appeal. It was premature, he argued, to consider whether appellant had suffered a loss of earning capacity post 17 March 1986. There had been no opportunity for him to put his case in that respect to the Corporation with rights of review and appeal. His appeal to the Authority was limited to establishing the components of the relevant earnings and ensuring that the Review Officer's reference to “for the period of incapacity” was not taken by the Corporation as necessarily limiting appellant's entitlement in advance of his case being considered. 
The appellant applied to the Authority for leave to appeal pursuant to s 111 but leave was refused. 
The present application to this Court followed. 
By s 111(2) special leave may be granted on a question of law or, if, in the opinion of the Court, the question involved in the appeal is one which by reason of its general or public importance, or for any other reason ought to be submitted to the High Court for decision. 
The questions of law raised by appellant in his memorandum may be grouped as follows: 
(1)
whether there was any evidence to support the finding that the travel warrant was merely potential earnings and not relevant earnings (the claim in respect of the furniture loan entitlement was not pursued): 
(2)
whether the Authority erroneously considered the appellant's claim for post 17 March 1986 compensation in terms of s 59 of the Act (relating to compensation for temporary loss of earning capacity) and failed to direct an assessment under s 60 (which deals with permanent incapacity). 
(3)
If the Authority was correct in making a finding as to loss of earning capacity in terms of s 59, whether there was any evidence to support the findings of fact and whether he failed to take into account relevant factors. 
I agree that in the circumstances of this case the matters raised are arguable questions of law and special leave is granted. 
Mr Wright further submitted that the appeal is, in any event, one of general or public importance for reasons advanced in the course of his argument but in view of my determination as to the nature of the questions to be dealt with it is not necessary for me to consider this alternative argument. 
Mr Mander was constrained to accept that the Authority had acted on a mistaken view of the evidence about the free travel warrant. He argued, however, that the proper remedy was not for this Court to direct the Corporation to include it, but to remit the question to the Authority for reconsideration. 
I am unable to accept that view. The Authority's decision is simply to be amended to correct the misunderstanding so that, in the result, the earnings related compensation during appellant's periods of temporary incapacity are to be re-assessed on the basis that his Army wages, gratuity and free travel entitlement are all included in his relevant earnings. 
I turn now to the remaining question. From the outset, the dispute between the appellant and the Corporation proceeded on the basis that although fit to return to work on the waterfront his injuries precluded him from resuming Territorial Service. The issue was whether the Corporation was right in its determination that the appellant suffered no additional financial loss because of his inability to serve with the Territorial Army and that was the issue which the appellant took to review. As the Review Officer noted: “On 23 March 1990 Mr Welsh sought a review of the Corporation's decision that no financial loss had resulted from his inability to continue his Territorial Army service consequent on his accident”
The substantive point was decided in appellant's favour in respect of actual wages but incidental entitlements were excluded. 
The Review Officer in his decision determined that the earnings should be taken into account “when calculating the earnings related compensation due for the period of incapacity. It is this phrase and the possible implications from it that precipitated the second ground of appeal and the course of events set out above. 
It is unclear to what extent a claim to be entitled to be assessed for permanent incapacity under s 60 was advanced before the Authority. The letter constituting the notice of appeal and Mr Wright's written synopsis do not expressly refer to it. After this lapse of time Mr Wright is unable to recall if it was canvassed in the course of oral argument, and the absence of any reference to it in the Authority's decision leads me to the view that the issue was not clearly raised. 
The letter constituting the notice of appeal and the written synopsis of argument, however, do expressly make reference to permanent disability, and the substance of appellant's concern, namely that the Review Officer's reference to the period of incapacity should not be taken as limiting the assessment to be made, to the period ending with his return to civilian work. The submissions also asked that the Corporation be required to make an assessment. 
Although the present difficulty has I think been contributed to by a lack of precision in the case put to the Authority as to what appellant's case was, I accept Mr Wright's submission that there has been an error of law in dealing with the post 17 March 1986 period in terms of s 59 of the Act and in finding on this appeal, before there had been an assessment, that there was no impairment of earning capacity after 17 March 1986. 
I direct that the Corporation is to make an assessment in terms of s 60 of the Act unfettered by the limitation (if any) in the phrase “for the period of incapacity” in the Review Officer's determination. 
It is desirable that I should expressly say that this does not imply any endorsement by this Court of the merits of appellant's claim to compensation for permanent incapacity under that section. That question remains open pending assessment and, if necessary, review and further appeal to the Appeal Authority. 
Although the appellant is successful I do not consider that in the circumstances there should be an award of costs. 

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