Australian Telecommunications Commission v Novak, L.F
[1989] FCA 75
•14 MARCH 1989
Re: AUSTRALIAN TELECOMMUNICATIONS COMMISSION
And: LYNN FRANCINE NOVAK
No. G1042 of 1988
FED No. 75
Administrative Law
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)
CATCHWORDS
Administrative Law - Compensation (Commonwealth Government Employees) Act 1971 - function of Commissioner for Employees' Compensation to determine all matters and questions arising under the Act - whether decisions made by the Commissioner are a form of delegated legislation - distinction between statutory source of liability to pay compensation and machinery for determining the amount of liability for compensation.
HEARING
SYDNEY
#DATE 14:3:1989
Counsel and Solicitor Miss R.M. Henderson instructed
for Applicant: by Australian Government
Solicitor.
Counsel and Solicitors Mr. L. King instructed by
for Respondent: Kencalo and Rimes
ORDER
The appeal be allowed.
The decisions of the Administrative Appeals Tribunal dated 22 April and 18 May 1988 be set aside.
Liberty to either party to apply, on seven days' notice, for further relief be reserved.
Costs be reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
On 24 October 1977, Lynn Francine Novak, the respondent in these proceedings, made a claim for compensation for an injury suffered on 1 October 1977 pursuant to s.54 of the Compensation (Commonwealth Government Employees) Act 1971 ("the Act"). On 3 November 1977, a Delegate of the Commissioner for Employees' Compensation ("the Commissioner") determined, in accordance with s.27 of the Act, that the injury arose out of her employment and that compensation was payable in accordance with s.45. Subsequent determinations were made of further entitlement to compensation. On 26 May 1986, a Delegate determined that the respondent was entitled to compensation from 1 November 1985 to 30 April 1986. The respondent was paid compensation until 27 November 1986.
No explanation was given to the respondent why payments of compensation ceased on 27 November. Her solicitors complained to the Commissioner and sought a determination of the respondent's entitlement. On 29 June 1987, the respondent commenced proceedings against the Commissioner in this Court (No. G.266 of 1987) alleging that there had been unreasonable delay in making a determination and seeking an order under the Administrative Decisions (Judicial Review) Act 1977 that the Commissioner make a determination.
By letter to the respondent's solicitors dated 13 July 1987, the Acting Assistant Commissioner indicated that he would make a determination before 30 July when the matter was next listed for a directions hearing in this Court. The Acting Assistant Commissioner added:
"In accordance with section 20 of the Act, you are now
given an opportunity to show cause why a determination finding that (the respondent) is no longer totally incapacitated as a result of the personal injury of 1 October 1977 should not be issued. In the absence of a response by 24 July 1987, we intend to so determine in this matter."
(By s.2O(1) of the Act, the function of the Commissioner is to determine all matters and questions arising under the Act. In so determining, the Commissioner shall be guided by equity, good conscience and the substantial merits of the case without regard to technicalities (s.2O(2)(a)). The Commissioner is not required to hold a formal or oral hearing but shall give to any person who will be directly affected by the determination a fair opportunity of presenting his case (s.20(2)(b)).
On 27 July 1987, the Commissioner's Delegate found that the respondent "was on and from 13 November 1986 no longer totally incapacitated for work as a result of the personal injury sustained in the incident on 1 October 1977." The Delegate determined that "on and from 13 November 1986, (the respondent) (was) no longer entitled to receive weekly payments of compensation under (s.)45 of the said Act in respect of total incapacity for work."
On 14 August 1987, the respondent applied to the Administrative Appeals Tribunal ("the Tribunal"), pursuant to s.29(1) of the Administrative Appeals Tribunal Act 1975, for the review of the determination made on 27 July.
On 22 April 1988, the Tribunal, constituted by Mr. J.O. Ballard, Senior Member, published reasons for decision in the matter. The Tribunal said that, after a number of directions hearings, both parties had applied for an adjournment of the matter but that the Tribunal had indicated that certain issues arose on the face of the determination on which it would wish to hear submissions and make rulings before the matter proceeded to hearing of the substance. The issues were said to be:
"1. Whether the determination of the 27th July 1987
was made in contravention of (s.) 20(2)(b) of the
(Act); and
2. Whether it is effective in terminating retrospectively the applicant's accrued rights to the payment of compensation for total incapacity under determinations of 26th May 1986 (or any later determinations)."
The Tribunal was of the opinion that the respondent had a continuing right to payment of compensation under a determination lawfully made at the time that the Commissioner elected to terminate that payment; that ss.8 and 48 of the Acts Interpretation Act 1901 applied to preserve rights under statutes and regulations respectively; that determinations under the Act were a form of delegated legislation; and that the principles embodied in ss.8 and 48 of the Acts Interpretation Act should be applied to the determinations made in the present case.
The Tribunal was further of the opinion that the powers of the Commissioner would extend to the issue of a determination in the form of a stay of the kind referred to in s.4l(2) of the Administrative Appeals Tribunal Act. The Tribunal said:
"In this case the reason for the stopping payment in
November 1986 was to enable the respondent to investigate the applicant's continued entitlement and make a submission upon it to the Commissioner as a result of those investigations. A determination staying the operation (of) the determination awarding weekly payments would have been appropriate. One was not made. As a result, between the 13th November 1986 and the 27 July 1987 the respondent unlawfully withheld the applicant's compensation to which it had a liability to pay (Commonwealth v. Goodfellow 31 ALR 533 at 536 and 549). In my opinion this presents a quite different situation from that which arises where there has been no determination creating such a liability."
The Tribunal was of the view that the Acting Assistant Commissioner's letter dated 13 July 1987 gave the respondent's solicitors "an indication that what was intended was a prospective revocation of the (respondent's) entitlement." Yet, the Tribunal held, the respondent was given no opportunity to present a case against the "retrospective application of the determination." The Tribunal concluded its process of reasoning as follows:
"9. In my view a determination cannot be made to
terminate retrospectively an accrued right of an applicant as a matter of natural justice. It seems to me that the principles applicable to legislation and specifically those in sections 8 and 48 of the Acts Interpretation Act 1901 apply to determinations under the Act.
10. Even if that is not the case on these facts the
retrospective application of the determination, (although not the determination of itself) was effected without giving the applicant or her advisors a fair opportunity of presenting a case against this. Therefore the determination must be invalid pursuant to section 20(2)(b) of the Act, to that extent.
11. Accordingly I direct the Registrar that the matter
be listed for a directions hearing without further delay. At that directions hearing the applicant will be required to state whether she wishes to challenge the substance of the determination on its facts. If she does not, the Tribunal will proceed under paragraph 43(1)(b) of the AAT Act to vary the decision under review to remove the retrospectivity with the consequence that the applicant will be entitled to receive arrears of compensation up to the date of the determination but not thereafter..."
(see also Re Kime and Commonwealth of Australia (1988) 15 ALD 63).
On 18 May 1988, the Tribunal published a decision that, for the reasons given in the preliminary decision of 22 April, the determination under review be varied by deleting "13 November 1986" and substituting "27 July 1987".
Australian Telecommunications Commission ("the Commission") now appeals from these decisions. On behalf of the Commission, it is submitted that the Tribunal erred in finding that the Commissioner's determinations were a form of delegated legislation and that ss.8 and 48 of the Acts Interpretation Act applied here. It is further submitted on behalf of the Commission that the Tribunal erred in deciding that the Commissioner had power to issue a determination in the form of a stay. The Commission also challenges the Tribunal's ruling that the Commissioner cannot make determinations "retrospectively denying liability to make payments of compensation." The Commission further says that the Tribunal erred in holding that the determination under review was vitiated by any failure to observe the requirements of s.2O(2)(b) of the Act. The Commission then seeks orders setting aside the Tribunal's decisions and consequential relief.
Mr. King, counsel for the respondent, frankly, and, in my opinion, correctly, conceded that the Tribunal's process of reasoning could not be sustained.
The relevant statutory scheme is that if personal injury arising out of or in the course of the employment is caused to an employee, the Commonwealth is liable to pay compensation (s.29(1)). Where an injury to an employee results in the employee being totally incapacitated for work, compensation at the rate prescribed is payable (s.45(1)). Where the injury results in partial incapacity, a different rate of compensation is payable (s.46). As has been seen, the function of the Commissioner is to determine all matters and questions arising under the Act (s.20(1)). In Goodfellow, supra, cited by the Tribunal, Northrop J. said (1980) 31 ALR at p 549:
"The policy of the Compensation Act is to impose
liabilities upon the Commonwealth to make payments of compensation to its employees or their dependants in the circumstances specified in the Act. The Act constitutes the Commissioner and empowers him to give effect to that policy by conferring upon him functions and powers. As a result of exercising those functions and powers, the Commissioner may make a determination which imposes a liability on the Commonwealth to make payments of compensation, or which may not impose a liability on the Commonwealth to make payments of compensation, or which may vary or revoke an existing determination."
In my opinion, a distinction must be drawn, for present purposes, between the statutory source of the liability to pay compensation on the one hand and the machinery for determining the amount of that liability on the other. I would not interpret anything said by Northrop J. to contradict the existence of these different concepts. A distinction of the kind I would make here arose for consideration in Ocean Coal Company, Limited v. Davies (1927) AC 271. Section 14 of the Workmen's Compensation Act 1923 (UK) provided that "an employer shall not be entitled otherwise than in pursuance of an agreement or arbitration to end or diminish a weekly payment under the principal Act except in the following cases..." and the section proceeded to deal exhaustively with the circumstances in which a termination or diminution might occur. By a voluntary agreement an employer paid an employee a weekly sum by way of compensation in respect of a disease until 3 September 1925. Payment was stopped on the ground that the employee had completely recovered. On 21 September, the employer served on the employee a request for arbitration, asking for the termination of the weekly payment as from 3 September. Before the arbitration hearing, the employee admitted that he had recovered but argued that, by virtue of s.14, the weekly payments could not be terminated until an award had been made. The argument was rejected by a majority of the House of Lords. It was held that the arbitrator had no jurisdiction under s.14 to award any payment after the incapacity had ceased, and that he ought to make a retrospective award terminating the weekly payments as from the date of recovery. Lord Shaw, after referring to the statutory liability to pay compensation imposed by s.1 of that Act, said (at p 287):
"It is really unnecessary to insist on the essentiality
of this condition of liability. As has been pointed out in previous cases, it is not the award which creates the liability; an award is merely part of the machinery for determining its amount and for having it enforced. But the liability is imposed by the statute itself, and the statute uses no doubtful language as to the period and purpose of compensation. Where an accident has occurred arising out of and during the course of a workman's employment the statute says that the workman is to receive compensation during the period of the incapacity resultant from that accident. It is most necessary in view of the numerous questions which have arisen in applying the machinery and procedure prescribed by the Act to effectuate the payment of this compensation to reaffirm that unless it is impossible to avoid such a result the Act should not be made the instrument of recovering payment for a period during which that incapacity had ceased, which incapacity was the fundamental reason and condition upon which compensation was given." (Emphasis added)
Likewise, in the present case, a distinction should be recognised between the existence of a liability to pay compensation, which is created by virtue of the statute itself, on the one hand and, on the other, the function of the Commissioner in ascertaining whether facts exist which match the provisions of the statute, which is a machinery provision only. The former creates the substantive liability; the latter is adjectival only.
The Ocean Coal Case was followed by the High Court in The Western Australian Coastal Shipping Commission v. Wallner (1980) 144 CLR 110 where the operation of s.7A of the Workmen's Compensation Ordinance 1949 (NT), which is in terms similar to s.14 of the United Kingdom Act, was considered. It was held that a voluntary payment of compensation was a payment "due under" the Ordinance because it was paid by reason of, and by reference to, the Ordinance. Once such a payment was made, the worker had a right to its continuance until the issue of liability was determined in the employer's favour.
As Wilcox J. pointed out in Commonwealth of Australia v. Ford (1986) 65 ALR 323 at p 327, upon the lodgement of the respondent's claim for compensation, it became the duty of the Commissioner to make such determinations from time to time as were necessary to confer upon the respondent the particular benefits to which she was, on the facts as they may be from time to time, entitled. In making those determinations, the Commissioner was exercising executive and not judicial or legislative power. The Commissioner was administering the relevant parts of the Act in the sense explained by Professor Zines in his work "The High Court and the Constitution" (2nd ed. at p 163):
"The executive function - described in s 61 of the
Constitution as extending to 'the execution and maintenance of this Constitution, and of the laws of the Commonwealth' - emphasises existing law. In executing and maintaining those laws it will be necessary to make determinations of existing rights and duties, for example, a postal official deciding whether a parcel conforms to the postal regulations or a customs official deciding whether duty is payable on an imported product."
In my opinion, it cannot be said that the determinations made by the Commissioner by way of a procedural function were delegated legislation (see Pearce "Delegated Legislation" pp 1-2). It must follow that the provisions of the Acts Interpretation Act cannot apply in the manner suggested by the Tribunal. Nor, in my view, did the Commissioner fail to observe the rules of natural justice or the requirements of s.20(2)(b). The respondent was given adequate notice of the Commissioner's intention to make a fresh determination.
As has been said, upon the lodgment of the initial claim for compensation, it was the function of the Commissioner to consider from time to time whether a particular liability existed under the Act, and if so, in respect of what period that liability existed. The Commissioner purported to perform this function by his determination made on 27 July 1987. It is true that the determination purported to speak in respect of a period ending before 27 July. But this was within the power of the Commissioner. Whether the decision was correct in terms of the merits of the matter is, of course, another question which is yet to be reviewed. With all respect to the Tribunal, I cannot agree that it was beyond the powers of, or ultra vires, the Commissioner to make such a determination. It was then open to either party to apply to the Tribunal to review the Commissioner's determination pursuant to s.63(1) of the Act.
The Tribunal has not yet embarked upon its review of the determination. Instead of doing this, it raised a preliminary point of law, of its motion, which it held to be decisive of the dispute adversely to the Commission. The Tribunal's decisions cannot be justified and must be set aside so that the Tribunal may now embark upon its process of review of the merits of the continuing claim for compensation. I propose to set aside the decisions dated 22 April and 18 May 1988 and to reserve liberty to apply for further relief should this be necessary. I will reserve costs.
0
2
0