High Court Decision Affecting Lump Sum Provisions for Commonwealth Compensation
The decision of the High Court in Fellowes v Military Rehabilitation & Compensation Commission [1] (MRCC) has provided new authority on the interpretation of the Guide to the Assessment of the Degree of Permanent Impairment (the Guide). The High Court was asked to decide whether separate injuries resulting in the same degree of “whole person” permanent impairment as assessed under the Guide give rise to separate compensation for each injury.
The facts
Ms Fellowes enlisted in the Australian Army in 1986. In 1986, Ms Fellowes suffered a work-related left knee injury (the left knee condition). In 1987, Ms Fellowes suffered a work-related right knee injury (the right knee condition). Both injuries were permanent and, although they did not result in any loss of range of movement, Ms Fellowes had difficulty with grades and steps but not distances. Both conditions separately attracted a 10% degree of impairment under Table 9.5 of the Guide.
In December 2005, Ms Fellowes lodged claims for compensation for each injury under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act). The MRCC paid lump sum compensation in accordance with a 10% whole person impairment for Ms Fellowes’ left knee condition however denied liability to pay lump sum compensation for the right knee condition. This decision was affirmed on 22May 2007.
Ms Fellowes appealed this decision to the Administrative Appeals Tribunal (the Tribunal) and the Full Court of the Federal Court (consisting of French, Moore and Lindgren JJ). The Tribunal and the Full Court of the Federal Court affirmed the MRCC’s decision.
By special leave, Ms Fellowes appealed to the High Court.
The High Court’s decision
Ms Fellowes argued that there were two injuries which resulted in two impairments and therefore two amounts of compensation should be awarded. The MRCC submitted that, as the degree of impairment resulting from Ms Fellowes’ second injury was the same as that which resulted from her first injury, a 0% impairment rating should apply. In effect, the MRCC contended that the second injury did not result in a higher assessment under Table 9.5 of the Guide and therefore did not add to Ms Fellowes’ overall impairment.
The majority of the High Court (Hayne, Heydon, Crennan and Bell JJ) considered that interpretation of the term “impairment”, as referred to in subsection 24(5) of the SRC Act, was pivotal in the arguments advanced by the parties. Their Honours found that “impairment” was to be identified in respect of bodily parts, systems or functions stating:
“The references to ‘whole person impairment’ that are found in the Guide do not direct attention to the effect of an injury or disease on a particular individual. On the contrary, the effect to be assessed is by reference to the functional capacities of a normal healthy person.”
On this basis, and in line with the High Court’s decision in Canute v Comcare [2], the High Court found that if a later injury results in an impairment and the applicant satisfies the other requirements of section 24, the applicant will be entitled to a second payment of compensation where there are two distinct injuries resulting in their own impairments. In reaching this conclusion, the High Court determined that Comcare v Van Grinsven [3]was wrongly decided and should be overruled.
Impact
The High Court’s decision means that Commonwealth employees are entitled to receive lump sum compensation more than once under Table 9.5 of the Guide, even though a later injury does not increase the overall degree of “whole person” impairment suffered by those employees as assessed in accordance with the Guide.
San Pham, Lawyer & Brett Ablong Partner
Footnotes
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[2009] HCA 38
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(2006) 226 CLR 535
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(2002) 117 FCR 169
