Judgment date: 12 April 2021

Citation: Ozcan v Macarthur Disability Services Ltd [2021] NSWCA 56

Jurisdiction: New South Wales Court of Appeal (MacFarlane McCallum JJA and Simpson AJA)

Background

On 14 November 2011, Nuray Ozcan (the Applicant) was involved in a workplace accident suffering injury to her lumbar spine, thoracic spine, and right shoulder (the first injurious event) whilst in the employ of Macarthur Disability Services Ltd (the Respondent).

The Applicant suffered further injuries to her lumbar spine and thoracic spine on separate incidents on 3 May and 26 September 2012 (the second two injurious events).

Pursuant to section 66 of the Workers Compensation Act 1987 (NSW) (the “1987 Act”), the Applicant claimed lump sum/permanent impairment compensation against the Respondent.

The matter was referred to an Approved Medical Specialist (AMS) to determine the degree of Whole Person Impairment (WPI) under section 322 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the “1998 Act”). The AMS found that the Applicant suffered the following WPI as follows: 3% from the injury to the right shoulder, 5% from that to her thoracic spine and, 7% from that to her lumbar spine. The AMS determined that the spinal injuries sustained on the first injurious event contributed to the spinal injuries suffered on the two subsequent injurious events.

On appeal from a decision of arbitrator Wynyard, Deputy President Wood found that the Applicant had suffered a WPI of 12% in respect of the lumbar spine and thoracic spine injuries arising from all three injurious events and separately, 3% in regard to the right shoulder injury on the basis that the Applicant ‘was not entitled to aggregate the WPI of the right shoulder with the losses of the spinal injuries attributable to the second two injurious events.’

In arriving at this conclusion, Wood DP noted that there are two causation tests involved in a medical assessment of permanent impairment under Pt 7 of Ch 7 of the 1998 Act. The first arising from ss 9 and 9A of the 1987 Act which provides that the injury that gave rise to the impairment in question arose out of or in the course of employment and that the employment was a substantial contributing factor.

The second is derived from ss 319(c) and 326(1)(a) of the 1998 Act where it must be shown that the permanent impairment is as a result of the injury which requires an enquiry as to the causal connection between the degree of permanent impairment and the compensable injury that was caused by the first injurious event.

Wood DP stated that:

“The impairment to the right upper extremity cannot be aggregated with the losses arising as a result of the second and third injuries on the basis of the common law principles discussed above. The right shoulder injury did not materially contribute to the impairments of the lumbar or thoracic spine and was not the same injury (pathology). The only basis upon which the assessment of the right upper extremity could be aggregated with the other assessments is in accordance with s 322(3) of the 1998 Act.

It is well settled that s 322(3) requires that, for the impairments arising from different pathologies to be aggregated, they must have been sustained in the same injurious event.[1] As Roche DP explained in Department of Juvenile Justice v Edmed (Edmed):[2]

For example, if a worker falls and suffers a broken leg and separate and distinct nerve damage in the arm, he or she has suffered more than one ‘injury’ (an injured leg and an injured arm) within the terms of section 322(3) resulting from the one ‘incident’. In other words, he or she has suffered more than one pathology (‘injury’) as a result of the one incident or injurious event.[3]

Wood DP continued at [150]:

“The impairments of the lumbar spine and thoracic spine assessed by the AMS can be aggregated by application of both the common law principles and s 322(2) and liability rests with the respondent for a total 12% WPI. However, that does not extend to a permission to aggregate the right upper extremity impairment with the impairments attributable to the injuries on 3 May 2012 and 26 September 2012. This is because the injurious event involving the right shoulder was a different injurious event to those events occurring on 3 May 2012 and 26 September 2012 and the right shoulder injury did not materially contribute to those subsequent thoracic and lumbar spine injuries.”[4]

The Applicant sought leave to appeal to the New South Wales Court Appeal against DP Wood’s decision pursuant to s 353(1) of the 1998 Act contending that it contained a misconstruction of s 322(2) and (3) of the 1998 Act.

Relevant Legislation

The 1987 Act:

65 Determination of degree of permanent impairment

  1. For the purposes of this Division, the degree of permanent impairment that results from an injury is to be assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act.
  2. If a worker receives more than one injury arising out of the same incident, those injuries are together to be treated as one injury for the purposes of this Division.

Note—

The injuries are to be compensated together, not as separate injuries. Section 322 of the 1998 Act requires the impairments that result from those injuries to be assessed together. Physical injuries and psychological/psychiatric injuries are not assessed together. See section 65A.

The 1998 Act:

322 Assessment of Impairment

  1. The assessment of the degree of permanent impairment of an injured worker for the purposes of the Workers Compensation Acts is to be made in accordance with Workers Compensation Guidelines (as in force at the time the assessment is made) issued for that purpose.

 

  1. Impairments that result from the same injury are to be assessed together to assess the degree of permanent impairment of the injured worker.

 

  1. Impairments that result from more than one injury arising out of the same incident are to be assessed together to assess the degree of permanent impairment of the injured worker.

Note—

Section 65A of the 1987 Act provides for impairment arising from psychological/psychiatric injuries to be assessed separately from impairment arising from physical injury.

  1. A medical assessor may decline to make an assessment of the degree of permanent impairment of an injured worker until the medical assessor is satisfied that the impairment is permanent, and that the degree of permanent impairment is fully ascertainable. Proceedings before a court or the Commission may be adjourned until the assessment is made.

Decision

MacFarlane JA gave the leading judgment (with McCallum JA and Simpson AJA in agreement) in finding that DP Wood had erred ‘in a point of law’ through the misapplication of s 322(3) of the 1998 Act and a failure to address the issue raised by the sub-section.

His Honor found that the present matter was distinguishable from Edmed for the reason that Roche DP did not address the argument that the first injury with which that case was concerned materially contributed to the second. As such, the suggestion that the second injury ‘arose out of’ or ‘resulted from’ the first.[5]

His Honor continued:

“…because the first spinal injuries contributed to the later ones, the impairments ‘resulting from’ the later injuries, as with those ‘resulting from’ the first, ‘arose out of’ the incident in which the first were suffered, thereby attracting s 65(2) of the 1987 Act and s 322(3) of the 1998 Act.”[6]

His Honor clarified that this view is not a different construction of s322(3) that is contradictory to Edmed but rather a different factual conclusion, namely that the right shoulder injury and the spinal injuries ‘resulted from’ and ‘arose out of’ the first incident and in turn, the second two injuries also ‘resulted from’ the initial injurious event.

Therefore, all injuries and their respective impairments were to be ‘treated as one injury’ and ‘assessed together’ as required by s 65(2) of the 1987 Act and s 322(3) of the 1998 Act.

In doing so, the Respondent was ordered to pay compensation pursuant to s 66 of the 1987 Act to the Applicant on the basis that she suffered 15% WPI as a result of the injuries incurred on 14 November 2011.

Importance

This decision does not overturn Edmed, as that matter is authority for the proposition that the reference to ‘the same injury’ in s 322(2) of the 1998 Act is a reference to the same pathology not to the same event or incident. Employers and Insurers need to be aware that Edmed does not limit the operation of s 322(3) of the 1998 Act as it did not address any argument that an injury materially contributed to later injuries and therefore the later injuries ‘arose out of’ or ‘resulted from’ the first.[7]

Contrastingly, the Court of Appeal held that in the event that the later injuries sustained by a worker resulted from those suffered on a previous date, s 322(3) of the 1998 Act requires them to be assessed with the impairment arising out of a separate injury sustained in the same event.[8] Accordingly, all injuries therefore ‘resulted from’ and ‘arose out of’ the first incident.[9] As a consequence, all injuries are to be ‘treated as one injury’ and ‘assessed together’ as directed by s 65(2) of the 1987 Act and s 322(3) of the 1998 Act respectively.[10]

This decision indicates the Court has adopted a ‘material contribution’ rather than a ‘sole cause’ test and as such the consequences of multiple incidents being assessed together is considerable.

Employers and case managers therefore need to be particularly mindful of the impact that subsequent injuries can have on the WPI assessment of a workers compensation claim. Early investigation as to whether later injuries have resulted from earlier injuries needs to be undertaken, and will need to be factored into a total permanent impairment award.

[1] Ozcan v Macarthur Disability Services Limited [2020] NSWWCCPD 21 [145], [148].

[2] [2008] NSWWCCPD 6.

[3] Ibid [26].

[4] Ozcan v Macarthur Disability Services Limited [2020] NSWWCCPD 21. [150].

[5] Ozcan v Macarthur Disability Services Ltd [2021] NSWCA 56 [22].

[6] Ibid.

[7] Ibid [22], [24].

[8] Ibid [16].

[9] Ibid [15], [18].

[10] Ibid [15] – [16].