Northern Territory of Australia v Pengilly [2004] NTCA 4

PARTIES:	NORTHERN TERRITORY OF AUSTRALIA

	v

	PENGILLY, WENDY

TITLE OF COURT:	COURT OF APPEAL OF THE NORTHERN TERRITORY

JURISDICTION:	CIVIL APPEAL FROM THE SUPREME COURT EXERCISING TERRITORY JURISDICTION

FILE NO:	No. AP 22 OF 2003 (20119869)

DELIVERED:	8 APRIL 2004

HEARING DATES:	18 MARCH 2004

JUDGMENT OF:	MARTIN (BR) CJ, ANGEL & BAILEY JJ

CATCHWORDS:

WORKERS’ COMPENSATION – ASSESSMENT AND AMOUNT OF COMPENSATION

Further claim in respect of permanent impairment – how previous compensation to be taken into account – matter of statutory construction and general principle – employer entitled to set off the amount earlier paid in pro tanto discharge of later liability.

Work Health Act (NT), s 71 

Winkworth v Edward Baron Development Co [1987] 1 All ER 114, considered

REPRESENTATION:

Counsel:
	Appellant:	Mr P Barr
	Respondent:	Mr J B Waters QC

Solicitors:
	Appellant:	Povey Stirk
	Respondent:	Caroline Scicluna

Judgment category classification:	B
Judgment ID Number:	ang200402
Number of pages:	7

ang200402
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Northern Territory of Australia v Pengilly [2004] NTCA 4
No. AP 22 OF 2003 (20119869)

	BETWEEN:

	NORTHERN TERRITORY OF AUSTRALIA
					Appellant

	AND:

	WENDY PENGILLY
					Respondent

CORAM:	MARTIN CJ, ANGEL & BAILEY JJ

REASONS FOR JUDGMENT

(Delivered 8 April 2004)

THE COURT:

[1]	This is an unsuccessful employer’s appeal from a judgment of a single Judge who allowed the respondent worker’s appeal from the Work Health Court.  The Judge ordered the appellant to pay the respondent a certain lump sum as compensation pursuant to s 71 Work Health Act (NT) in respect of the respondent’s assessed whole body permanent impairment.  The judgment sum represented a 2001 assessment of lump sum compensation pursuant to s 71 Work Health Act (NT) from which was deducted a lump sum paid to the respondent in 1997.  The 1997 payment was based on the respondent’s then assessed permanent whole person impairment of 43%.  The respondent’s 1997 payment was 43% of 208 times the respondent’s average weekly earnings calculated at the time of payment in 1997.  The 2001 assessment was based upon the respondent’s reassessed permanent whole person impairment of 60%.  The respondent’s 2001 entitlement was 60% of 208 times the respondent’s average weekly earnings calculated at the time of payment in 2001.  From this was then deducted the 1997 payment as a lump sum.
[2]	The respondent was employed by the appellant as a cleaner.  In 1993 the respondent injured her arm at work.  Following surgery she contracted dermatitis.  The appellant accepted liability under the Work Health Act (NT) to compensate the respondent for the injury and for the dermatitis.  In 1996 the respondent made a claim pursuant to s 71 Work Health Act (NT) for permanent impairment which in virtue of s 70 Work Health Act (NT) means “an impairment or impairments assessed, in accordance with the prescribed guides, as being an impairment, or combination of impairments, of not less than 5% of the whole person”.  Regulation 9(1) Work Health Regulations provides: “For the purposes of the definition of ‘permanent impairment’ in section 70 of the Act, the American Medical Association Guides to the Evaluation of Permanent Impairment (4thedition) are the prescribed guides.”  
[3]	In 1997 the parties agreed that the respondent’s 1996 claim entitled her, pursuant to s 71 Work Health Act, to be paid $60,685.04, she having been assessed as having a permanent impairment of 43%  of the whole person.  The sum payable represented 43% of 208 times her average weekly earnings calculated at the time of payment.  The respondent’s impairment was assessed as 43% of the whole person on the basis that her dermological condition represented 24% of that impairment and that the carpal tunnel syndrome injury to the arm constituted 25% impairment.  According to the combined values chart in the prescribed guides, this combination of impairments resulted in a permanent impairment equal to 43% of the whole person.
[4]	The amount of $60,685.04 was paid by the appellant to the respondent.  Subsequently the respondent sought to reopen her claim.  The matter came before the Work Health Court which rejected her claim on the merits.  An appeal to the Supreme Court in 1999 was dismissed.
[5]	In 1999 the Work Health Court held that the making of the agreement in 1997 in respect of the respondent’s permanent impairment and the payment of moneys pursuant to that agreement did not prevent a further application being made by the respondent if the permanent impairment, as assessed under the prescribed guides, significantly increased or a new impairment arose: Pengilly v Northern Territory of Australia (1999) NTMC 026 at para 54.  The correctness of that decision was not contested in this appeal.
[6]	Subsequently in late 2001 the respondent’s dermatitis deteriorated whilst her carpal tunnel syndrome resolved.  A medical panel certified that she had a 60% permanent impairment of the whole person consequent upon her dermatitis condition.  Although the parties are agreed that the respondent is entitled to make a further claim based on the 60% permanent impairment of the whole person assessment they disagree as to how her new entitlement is to be calculated.  At first instance the Magistrate decided that the respondent was entitled to 60% minus 43%, that is, 17% of the relevant average weekly earnings at the time of payment.  On appeal the Judge allowed the appeal holding that the respondent was entitled to 60% of 208 times the respondent’s average weekly earnings calculated at the time of payment less the sum of $60,685.04 which had been paid to the respondent in 1997.  
[7]	The parties do not contest that the respondent in 2001 could make a second claim based on 60% permanent impairment.  At issue is how her being compensated in 1997 is to be taken into account.  The appellant argues that the Magistrate correctly decided the issue.  The respondent argues that the learned Judge on appeal correctly decided the issue.  The appellant says the respondent is entitled only to 17% of $170,060 (representing 208 times the respondent’s average weekly earnings at the relevant time in 2001) which calculates to $28,910.00.  The respondent on the other hand, says she is entitled to be paid 60% of the $170,060.00 less the 1997 payment (which calculates to $102,036.00 less $60,685.04 equalling $41,350.96).
[8]	Counsel for the appellant submitted that the respondent having been paid on the basis of 43% permanent impairment in 1997, to deduct the 1997 payout sum only from the 2001 assessment took no account that the respondent was receiving not only 43% of 208 times the 2001 as opposed to the 1997 average weekly earnings of the respondent but that the respondent had also had the benefit of the 1997 payment in the meantime.  Thus, it was submitted, there was an illegitimate “doubling up” in favour of the respondent.  This should be avoided, it was submitted, by deducting 43% from the 2001 assessment rather than simply deducting the 1997 payout sum.  Counsel for the appellant submitted that this was the proper consequence both as a matter of statutory construction and applying what he described as “general equitable principles of fairness”.  The avoidance of the alleged “doubling up” was said to be implicit in the fact that the s 71 calculation was to be based on average weekly earnings “at the time the payment is made” in combination with s 24 Interpretation Act (NT) which provides that the words in the singular include the plural and vice versa.  Counsel for the appellant submitted that an intention on the part of the legislature not to compensate the respondent twice for her loss should be inferred and that s 71 Work Health Act (NT) should be read so as to entitle her to receive only the difference between the percentage losses.
[9]	As we have said, the appellant concedes that the respondent could make a further application pursuant to s 71.  That concession having been made, it is a matter upon which we express no opinion.  As the Act does not specifically address the present situation where a second claim is made following a previous payout in respect of earlier permanent impairment arising from the same injury, the answer as to how the previous payment is to be taken into account must be found as a matter of statutory construction and general principle.  It is not simply a question of “construing the Act beneficially towards the worker” nor of “general equitable principles of fairness”.  As Lord Templeman said with the concurrence of the other Law Lords  in Winkworth v Edward Baron Development Co [1987] 1 All ER 114 at 118 b: “Equity is not a computer.  Equity operates on conscience but is not influenced by sentimentality.”
[10]	In our opinion, it is a mistake to approach the issue from the point of view that the appellant has discharged 43% of its current liability.  Pursuant to s 71 the employee is entitled to compensation for a 60% permanent impairment assessed in today’s terms (“at the time the payment is made”).  By way of contrast, the employer discharged a liability in respect of 43% permanent impairment that existed in 1997.  The employee’s present claim is a new claim for a 60% permanent impairment that exists today.  It is not a claim under s 71 for an additional percentage for the increased incapacity over and above the 43% incapacity that existed in 1997.  The concession that the respondent in 2001 can sue for compensation on the basis of 60% permanent impairment carried with it the concession that the appellant did not finally discharge its liability in respect of 43% of the respondent’s current permanent impairment by its payment in 1997.  Counsel for the appellant expressly disavowed any res judicata with respect to the 43% impairment.
[11]	Viewed in this way, the employee is entitled to compensation based upon the 60% permanent impairment and, because the impairment arises out of the same injury which resulted in a 43% in 1997 and for which the employer compensated the employee, the employer is entitled to set off the amount paid in 1997 in pro tanto discharge of its later liability .
[12]	The appeal is dismissed.

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