Aboushadi and Telstra Corporation Ltd

[2004] AATA 35

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 35

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2003/418

GENERAL ADMINISTRATIVE DIVISION		)
Re		YOUSSEF ABOUSHADI

Applicant

And TELSTRA CORPORATION LTD

Respondent

DECISION

Tribunal Michael Sassella, Senior Member

Date19 January 2004

PlaceSydney

Decision The decision under review is set aside and the matter remitted to the respondent for reassessment of the rate of incapacity payments payable to Mr Aboushadi during the relevant period in accordance with the tribunal’s finding that s 19 of the Safety, Rehabilitation and Compensation Act 1988 applies on the basis that the onset of Mr Aboushadi’s incapacity for work and the time of his retirement coincided in time at 4.51 pm on 13 September 1999.  Costs are payable to the applicant in accordance with the tribunal’s general practice direction.

...............................................

Senior Member

CATCHWORDS

WORKERS' COMPENSATION – employee incapacitated for work as a result of adjustment disorder – rate of payment of weekly compensation payments for incapacity for work – employee compulsorily retired from employment - employee received superannuation pension from date of cessation of employment - rate affected by decision that the employee became incapacitated for work and retired at the same time

Safety, Rehabilitation and Compensation Act 1988 ss 4(1) (“superannuation scheme”), (9), 8, 19, 20, 21, 21A, 22, 72

Administrative Appeals Tribunal Act 1975 s 42C, 43(1)

Re Hammerton and Comcare (1995) 21 AAR 204

Re Sullivan and Comcare (AAT 13457, 24 November 1998)

Re Prica and Comcare (1996) 44 ALD 46

House v Department of Defence (1996) 41 ALD 793

REASONS FOR DECISION

19 January 2004 Michael Sassella, Senior Member           

RESULT

The tribunal has decided that Mr Aboushadi should be regarded as having become incapacitated for work and as having retired at the same time. His incapacity payments should be paid in accordance with s 19 of the Safety, Rehabilitation and Compensation Act 1988 rather than in accordance with s 20 of that Act.

BACKGROUND

1.      On 16 February 2001 agreement was reached between the representatives of Mr Youssef Aboushadi (“the applicant”) and Telstra Corporation Ltd (“the respondent”) that Mr Aboushadi had sustained an injury under the Safety, Rehabilitation and Compensation Act 1988 (“the Act”)[1]. He had a compensable adjustment disorder. Up to that time, despite Mr Aboushadi’s claims for compensation since 1996, Telstra had never under the Act accepted liability for any injury affecting Mr Aboushadi. This agreement was reached in the context of an application Mr Aboushadi had made to the Administrative Appeals Tribunal (“the tribunal”) challenging the decision to refuse liability. In accordance with s 42C of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”)[2], the tribunal issued a decision by consent of the parties embodying the terms of the parties’ agreement.

[1] As part of the consent agreement it was agreed that Mr Aboushadi was incapacitated for work during the period from 13 September 1999 to 13 September 2000. Mr Aboushadi qualified for weekly compensation payments in respect of the period of incapacity. These are effectively a replacement for lost salary or wages. The parties agreed that effects of the injury had ceased on and from 14 September 2000. The parties agreed that Mr Aboushadi also qualified for a lump sum payment of compensation in respect of a permanent impairment connected with his injury. He received over $20,000 based on a whole person impairment of 10% in accordance with s 24 of the Act.

3.      Difficulties then arose in the implementation of the tribunal’s consent decision.  In September 2002 Telstra assessed Mr Aboushadi’s weekly incapacity payments.  Their determination contained the following elements:

· Mr Aboushadi’s normal weekly earnings (“NWE”) as at 13 September 1999 were $1,234.31 under s 8 of the Act. This NWE applied on the day of 13 September 1999.

· For the period from 14 September 1999 to 22 December 1999 the incapacity payments were $487.67 a week in accordance with s 20 of the Act. This is manifestly far lower than the weekly rate of $1,200 odd payable before 14 September 1999.

· The NWE effective from 23 December 1999 was $1,259.00. The rate paid Mr Aboushadi under s 20 of the Act from 23 December 1999 until 30 June 2000 was $504.95 a week.

· As of 1 July 2000 Mr Aboushadi was paid $496.17 a week in accordance with s 20 of the Act. This followed from an increase Mr Aboushadi received in his superannuation pension on 1 July 2000.

·     Mr Aboushadi’s incapacity payments were agreed to cease on 13 September 2000. 

Mr Aboushadi considered that the application of s 20 of the Act to his circumstances had been erroneous.

ISSUES

4. The major issue in this application is whether s 19 of the Act or s 20 of the Act should be employed in assessing Mr Aboushadi’s incapacity payments. I note that s 19, on its own terms, is a residual provision that applies where ss 20, 21, 21A and 22 are all inapplicable (s 19(1) of the Act). Figures were presented at the tribunal hearing suggesting that Mr Aboushadi stands to be $14,000 better off if his entitlements can be assessed under s 19 of the Act rather than under s 20, although I note that the respondent did not accept at the hearing that the figures were necessarily accurate.

5. It is arguable that s 20 applies, as Telstra has assumed in assessing Mr Aboushadi’s payments. The section reads:

Compensation for injuries resulting in incapacity where employee is in receipt of a superannuation pension

20. (1) This section applies to an employee who, being incapacitated for work as a result of an injury, retires voluntarily, or is compulsorily retired, from his or her employment at any time after the commencement of this section and, as a result of the retirement, receives a pension under a superannuation scheme.

(2) Comcare is liable to pay compensation to the employee, in respect of the injury, in accordance with this section for each week after the date of the retirement during which the employee is incapacitated.

(3) The amount of compensation is an amount calculated under [a] formula [not here reproduced] …

…

6.      In Re Hammerton and Comcare (1995) 21 AAR 204, 223 the tribunal explained the purpose of s 20 of the Act as being that the Commonwealth will not pay an amount, by way of compensation in respect of a period of time, when it (the Commonwealth) is already paying an equivalent amount for the same period of time but in respect of a different matter (ie superannuation). Only the amount attributable to contributions made by the Commonwealth is deducted from incapacity weekly payments as the superannuation amount.

7. In order to see whether Mr Aboushadi’s payments are properly affected by s 20 I draw from s 20 the following issues against which to test Mr Aboushadi’s situation:

(a)Was Mr Aboushadi an employee incapacitated for work as a result of an injury under the Act?

(b)If the answer to (a) is yes, did Mr Aboushadi retire be it voluntarily or compulsorily?

(c)If the answer to (b) is yes, did he receive a pension under a superannuation scheme?

(d)If the answer to (c) is yes, did he receive the pension as a result of the retirement?

(e)If the answer to (d) is yes, was Mr Aboushadi incapacitated for work before he retired?

FINDINGS ON MATERIAL QUESTIONS OF FACT WITH REFERENCE TO THE EVIDENCE AND OTHER MATERIAL IN SUPPORT OF THOSE FINDINGS

(A) Was Mr Aboushadi an employee incapacitated for work as a result of an injury under the Act?

8.      I find that the answer is yes.  This was agreed between the parties and incorporated into a decision by consent issued by the tribunal on 26 February 2001. 

(B) If the answer to (a) is yes, did Mr Aboushadi retire be it voluntarily or compulsorily?

9.      I find that Mr Aboushadi ceased work involuntarily at the close of business on 13 September 1999.  This is supported by his Comsuper benefit application form.  Dated 12 March 2001 it gives 13 September 1999 as the date of cessation of employment. 

(C) If the answer to (b) is yes, did he receive a pension under a superannuation scheme?

10. Yes. I find that Mr Aboushadi received a pension under a superannuation scheme. On 2 September 2002 the respondent issued a determination recording that on 21 January 2002 Comsuper advised that Mr Aboushadi had elected to receive a maximum pension with effect from 14 September 1999. I find that Comsuper is a “superannuation scheme” as defined in s 4(1) of the Act in that it is a superannuation scheme under which a Commonwealth authority or licensed corporation makes contributions on behalf of employees.

(D) If the answer to (c) is yes, did he receive the pension as a result of the retirement?

11.     Yes.  There is no suggestion that Mr Aboushadi did not retire or that a superannuation pension is payable other than as a result of retirement.

(E) If the answer to (d) is yes, was Mr Aboushadi incapacitated for work before he retired?

12. For Mr Aboushadi it is argued that s 20 is not applicable. Reliance was placed on Re Sullivan and Comcare (AAT 13475, 24 November 1998) in which Senior Member (now Deputy President) Handley held (paragraph 65) that s 20(1) of the Act applies where an employee who is already incapacitated for work then retires, be it voluntarily or involuntarily. He held in the same paragraph that the retirement does not have to be connected with the compensable injury in order that s 20 is applicable. In Sullivan it was held that Mr Sullivan was not incapacitated for work, in accordance with the definition of “incapacity for work” in s 4(9) of the Act, before he retired. Section 20 therefore was not applicable. This analysis was consistent with the tribunal’s approach in Hammerton ([5] above). 

13. An employee has an incapacity for work under s 4(9) of the Act if he or she is unable to engage in any work because of a compensable injury or if unable to engage in work at the same level at which he or she was engaged by a Commonwealth agency or licensed corporation before the compensable injury. In Re Prica and Comcare (1996) 44 ALD 46, 51 the tribunal interpreted an inability to engage in work at the same level as before the injury as a reference to an inability to engage in work of the same nature as before in the sense of its characteristics, which will include its degree of difficulty.

14.     At first blush it appears that Mr Aboushadi was incapacitated for work before he retired.  The tribunal’s consent decision included that Mr Aboushadi was incapacitated for work “during the period 13 September 1999 to 13 September 2000”.  This is expressed so as to appear “inclusive”.  By that I mean that it is not expressed so as to exclude either of those days, a year apart, as part of the period of incapacity.  At the same time the Comsuper benefit application form cites the “cessation date” as 13 September 1999.  The natural interpretation applicable to such an entry is that Mr Aboushadi was employed during the day of 13 September 1999 and completed employment on that day, either at the normal knocking-off time or at a moment before midnight at the transition from 13 to 14 September 1999.  The statement of reasons in the primary decision dated 2 September 2002 shows that Comsuper advised the workers’ compensation insurer on 21 January 2002 that Mr Aboushadi had elected to receive a maximum pension with effect from 14 September 1999.  Mr Polin’s arguments before the tribunal on behalf of Telstra are effectively incorporated in this paragraph.

15.     This case was argued on the papers with no new evidence introduced.  Mr Grey of counsel represented Mr Aboushadi, as he had done in the earlier tribunal proceedings.  He argued that the tribunal’s consent decision should be interpreted to mean that the incapacity for work did not precede Mr Aboushadi’s retirement.  His specific arguments were:

(a)The date, 13 September 1999, was selected as the date of incapacity for work in the consent agreement because it was the date on which Mr Aboushadi retired.  The inference was that the retirement would occur and then the incapacity payments would begin.  Telstra had never accepted that Mr Aboushadi was incapacitated for work before 26 February 2001, at which time Telstra was prepared to accept he was incapacitated from 13 September 1999 but no earlier. 

(b)The phrase “the period 13 September 1999 to 13 September 2000” is capable of being interpreted as applying to an incapacity for work commencing at close of business on 13 September 1999 and ending on 13 September 2000.  The retirement commencing at the same time, the incapacity would not then have occurred before the retirement.

(c)At the date of the consent agreement Mr Aboushadi had not submitted his application to Comsuper seeking superannuation benefits. The consent agreement was negotiated on 26 February 2001. Mr Aboushadi submitted his application to Comsuper on or about 12 March 2001. There was nothing to suggest, at the time of the negotiations, that s 20 of the Act would have any immediate application. Only s 19 could have any application as at that date.

(d)The decision-makers for Telstra had acted in a peremptory fashion in proceeding to find that s 20 was applicable without referring back to Mr Aboushadi before doing so. They did this despite several letters from Mr Aboushadi’s solicitors arguing that s 19 was the applicable section. These solicitor’s letters had never been answered. The Telstra decision-makers should have contemplated a reconsideration on own motion of the tribunal’s s 42C decision if they considered that the literal terms of the consent decision were flawed in that they so disadvantaged Mr Aboushadi.

(e)To the extent that the consent terms are ambiguous any ambiguity should be resolved in Mr Aboushadi’s favour on the basis that the terms were drafted by Telstra’s counsel in the earlier proceeding, albeit cleared by Mr Aboushadi’s advisers.

(f)Section 72 of the Act requires that decision-makers under the Act make determinations guided by equity, good conscience and the substantial merits of the case, without regard to technicalities. That would favour a decision in this proceeding reflecting the presumed intentions of the applicant.

(g)Had the respondent determined how much each week Mr Aboushadi was to receive by way of incapacity payments promptly after the date of the consent decision, only s 19 would have been applicable as Mr Aboushadi would not have been in receipt of a superannuation pension or lump sum. The crucial dates were: decision was dated 26 February 2001; Mr Aboushadi applied for his superannuation benefit on 12 March 2001; Comsuper notified Telstra of Mr Aboushadi’s superannuation status on 21 January 2002; Telstra assessed Mr Aboushadi’s incapacity payments on 2 September 2002 (some 19 months after the operative decision).

16. I am thankful to Mr Grey for his assiduous and thorough arguments in this matter. Mr Aboushadi’s position is most unfortunate. Had the representatives discussing an agreed outcome in the earlier tribunal application turned their minds to the possibilities more fully at the time, it is possible, even likely, that they would have agreed to terms that would have avoided the operation of s 20 of the Act. Mr Polin did not indicate that the respondent in the earlier proceedings saw application of s 20 as a not negotiable matter.

17. In the ACT it is common for the parties, when constructing agreements to request a consent decision under s 42C, to include notes regarding a number of common understandings they have reached in the course of their negotiations. These notes are reproduced in the s 42C decision document but are not presented as a part of the formal decision. They commonly appear below the tribunal member’s signature block and relate to such understandings as that the applicant may have to refund money from the agreed settlement amount to Centrelink and the Health Insurance Commission, that the applicant is accepting a voluntary redundancy, that the applicant will be responsible for his or her medical expenses as of a certain date and a variety of other possibilities. They clarify certain matters that affect a party but which are not strictly within the tribunal’s jurisdiction. These notes appear on s 42C decisions most usually in matters settled at the conciliation stage prior to a hearing. They are less common where a matter settles, as Mr Aboushadi’s did, on the day the matter is listed for a full tribunal hearing. However, there is no reason why they cannot be employed on these latter occasions. It is possible that Mr Aboushadi’s superannuation position would have been addressed (as perhaps it should have been), and the intended consequences, had the parties considered such matters of context more explicitly during the negotiations. I note that in the consent decision that generated this application for review there was no reference to Mr Aboushadi’s superannuation or his retirement.

18. I consider that I could intervene and make a decision in Mr Aboushadi’s favour on either of two bases. If there is an ambiguity in the terms of the tribunal’s consent decision there is a basis for an argument that the Telstra delegates should have made a different decision in assessing Mr Aboushadi’s incapacity payment rate. The correct or preferable decision might then be that Mr Aboushadi’s retirement preceded, or was simultaneous with, his becoming incapacitated. This might flow from the knowledge a decision-maker has regarding the costly implications for Mr Aboushadi of the opposite finding, ie the finding actually made in this case. The correct or preferable decision could reasonably take account of Parliament’s edict in s 72 of the Act (see [15(f)] above) and the loss of advantage to Mr Aboushadi from Telstra’s failure to act promptly in making an assessment (see [15(g)] above).

19.     However and unfortunately, I cannot discern any ambiguity in the terms of the decision.  As I said in [14] above, the apparent meaning of paragraph 1(b) of the decision, “as a result of that injury the Applicant was incapacitated for work during the period 13 September 1999 to 13 September 2000”, is that, by agreement, Mr Aboushadi was incapacitated from immediately after midnight on 13 September 1999 until the end of the day on 13 September 2000. 

20. An alternative possibility is that I exercise the tribunal’s powers under s 43(1) of the AAT Act to stand in the shoes of the original decision-maker and exercise that person’s powers and discretions as conferred by the Act. I would do this effectively to conduct the reconsideration that Mr Grey argued in [15(d)] above should have been done by Telstra’s decision-makers. This is what the tribunal always does in any event in making a decision on an application before it. I need to be satisfied that this would be an exercise involving me in making the correct or preferable decision and not in breach of the principle of functus officio..  I would also see doing this as highly significant in that it might be regarded as remaking a decision of the tribunal that, on its face, is perfectly sound.  At the same time I am conscious that the better view regarding issue estoppel, as it applies to a tribunal decision on the record, is that a tribunal decision does not create an issue estoppel preventing later decision-makers, armed with appropriate powers, from reviewing that decision unless the previous decision resolved all issues that are before the later decision-maker.  House v Department of Defence (1996) 41 ALD 793 is an example of a Federal Court case consistent with that proposition[3]. 

[3] The matter is discussed comprehensively by Professor D Pearce in Administrative Appeals Tribunal (2003, LexisNexis Butterworths, Australia) 153-155.

21.     I find from these considerations that the consent decision was not ambiguous on its face but that, by the time Telstra’s decision-makers came to consider it in the process of making the decisions that led to the present application, they had additional information in the form of several letters from Mr Aboushadi’s solicitors and information about Mr Aboushadi’s superannuation status that were not available when the consent terms were drafted.  While Telstra’s decision-makers made no legal error in acting as they did, it would have been preferable if they had considered whether a reconsideration on own motion of the consent decision was in order so as to ensure that Mr Aboushadi was not disadvantaged by events that had become clear after 26 February 2001. 

22. I find that the correct or preferable decision, in accordance with s 43(1)(c)(ii) of the AAT Act, is to set aside the decision under review and remit the matter to the respondent for reconsideration of the rate of incapacity payments payable to Mr Aboushadi during the relevant period in accordance a tribunal finding that s 19 of the Act applies on the basis that Mr Aboushadi’s incapacity for work and retirement coincided in time at 4.51 pm on 13 September 1999. I am conscious that s 19 contains provisions governing the assessment of an incapacity payment relating to part of a week. That should facilitate assessment of the payment attributable to the day of 13 September 1999.

CONCLUSION

23. I have decided that the decision under review was not the correct or preferable decision. I consider that it would have been preferable for the delegates involved to reconsider the decision they were implementing, taking account of the additional information in their possession. This should have resulted in Mr Aboushadi’s incapacity payments being assessed under s 19 rather than s 20 of the Act.

DECISION

24. The decision under review is set aside and the matter remitted to the respondent for reconsideration of the rate of incapacity payments payable to Mr Aboushadi during the relevant period in accordance with the tribunal’s finding that s 19 of the Safety, Rehabilitation and Compensation Act 1988 applies on the basis that the onset of Mr Aboushadi’s incapacity for work and the time of his retirement coincided in time at 4.51 pm on 13 September 1999.  Costs are payable to the applicant in accordance with the tribunal’s general practice direction.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Michael Sassella, Senior Member

Signed:         .......................................................................................
  Associate

Date of hearing  25 September 2003
Date of decision  19 January 2004
Counsel for the applicant          Mr Leo Grey
Solicitor for the applicant          Carroll & O'Dea, Solicitors
Counsel for the respondent      Mr Nick Polin
Solicitor for the respondent      Sparke Helmore, Solicitors