Baker, B.R. v Secretary, Department of Social Security
[1991] FCA 275
•28 MAY 1991
Re: BRETT RONALD BAKER
And: SECRETARY, DEPARTMENT OF SOCIAL SECURITY
No. G661 of 1990
FED No. 275
Social Security - Practice and Procedure
13 AAR 429
23 ALD 305
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Davies J.(1)
CATCHWORDS
Social Security - whether a sum paid in settlement of a workers' compensation claim was a "payment by way of compensation" under the Social Security Act - whether applicant's resignation from work was relevant.
Practice and Procedure - considerations regarding the grant of an extension of time to institute an appeal.
Social Security Act 1947 (Cth) - s.152
HEARING
SYDNEY
#DATE 28:5:1991
Counsel for the applicant: Ms Y.F. Holt
Solicitors for the applicant: Armstrong and Partners
Counsel for the respondent: Mr A. Robertson and Mr S.J. McMillan
Solicitor for the respondent: Australian Government Solicitor
ORDER
The appeal be dismissed.
The applicant pay the respondent's costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
In these proceedings, the applicant, Brett Ronald Baker, sought an extension of time in which to institute an appeal against a decision of the Administrative Appeals Tribunal, constituted by the Deputy President B.J. McMahon, given on 13 February 1990. The notice of appeal intended to be relied upon was filed in Court during the course of this hearing on 17 April 1991. With the concurrence of counsel, I heard argument both on the application for leave and on the appeal should leave be granted.
Prompt and efficient decision-making is an integral part of good administration. It necessarily follows that reviews of and appeals against decisions of an administrative character should be brought promptly. Accordingly, an extension of time will not be granted without good cause or when the grant of the extension will inhibit effective, ongoing administration. But in the present case, it has been shown that Mr Baker acted promptly in seeking legal advice and legal aid. It was many months before that aid was granted; but ultimately it was. Ongoing administration will not be prejudiced by the grant of an extension of time. And the issue is one of wide application which ought to be resolved. In these circumstances, and as I have heard the merits of the appeal, I think it proper that I should grant an extension of time so as to validate the notice of appeal filed on 17 April 1991. In so doing, I have in mind that my decision will amount to a final order which may be the subject of appeal to a Full Court if the aggrieved party is dissatisfied with it.
The issue arises under Part XVII of the Social Security Act 1947 (Cth) ("the Act"), which deals with the recovery, from or in respect of a person who receives or has received a pension, of sums which the person receives or is entitled to by way of compensation in respect of incapacity for work. Section 152 of the Act provides, inter alia:-
"(2) In this Part -
(a) a reference to a payment by way of compensation is a reference to -
...
(iii) a payment, whether with or without admission of liability, in settlement of a claim under such a scheme or of a claim for damages; ... whether made within or outside Australia, being a payment received on or after 1 May 1987 that is, in whole or in part, in respect of an incapacity for work;
...
(c) a reference to the compensation part of a lump sum payment by way of compensation is a reference to:
(i) if the lump sum payment was made (whether with or without admission of liability) in settlement of a claim that is, in whole or in part, related to disease or injury and:
(A) in a case where a judgment by consent was entered in respect of the settlement - the judgment was entered on or after 9 February 1988; or
(B) in any other case - the settlement was made or entered into on or after 9 February 1988;
50% of the lump sum payment; ... ..."
The Tribunal recited the following facts:-
"1. These two applications, which were heard together, arise out of a decision of a Social Security Appeals Tribunal, given on 10 July 1989. The applicant, Mr Baker, then a butcher employed by GJ Coles Limited, alleged that he had suffered an injury in the course of his employment. In evidence before me, he said that he was not aware of the exact nature of the injury but that doctors had told him that repeated lifting had affected his back, thus disabling him from carrying out the trade of a butcher in the future. He was paid weekly sums of workers' compensation and subsequently commenced proceedings in the Compensation Court of New South Wales. That application (which forms part of the s 37 documents) alleged total incapacity from 22 October 1986 to the date of the application and thereafter and claimed compensation at a rate of $208-20 per week, from 19 May 1987 `to date and continuing'. The application for compensation was dated 29 June 1987.
2. Mr Baker gave evidence that on the day on which his application for compensation was to be heard, negotiations took place between the legal advisers on both sides. He said his barrister said to him: `They will give you $10,000 to drop the proceedings but you would have to resign. They will also pay your medicals up to $5,000'. Mr Baker said that his barrister told him that `social security would have no come back' as the payment was to be ex gratia.
3. No terms of settlement were signed and no written record of the agreement was in evidence before me. The formal order of the court (which is in the s37 documents) simply dismisses the application for compensation and enters an award in favour of the respondent."
It appears that the settlement occurred on 10 November 1988.
Prior to the proceedings in the Compensation Court, Mr Baker had been in receipt of sickness benefits. When the Department of Social Security received notice of the settlement, notices were given to the insurer of G.J. Coles Limited and to Mr Baker under ss. 154 and 155 of the Act. In compliance with these notices, the insurance company paid the amount claimed, $2,716.68, to the Department of Social Security. The Tribunal said as to this sum:-
"6. In accordance with s 152 of the Act, the Department calculated a lump sum payment of 15 weeks, based upon 50% of the total amount of $15,000, ie $7,500, which was then divided by the average weekly earnings as at date of settlement, namely $481-70. As Mr Baker was paid periodical compensation to 18 May 1987, the lump sum payment period was from 19 May 1987 to 31 August 1987. The amount of sickness benefit paid during this period (2 June 1987 to 31 August 1987) was $2,716-68, the amount that was recovered by the Department from the insurance company."
In this appeal, Ms Y.F. Holt, counsel for Mr Baker, made no challenge to the Tribunal's calculation of the amount. The notice of appeal raised the issue of medical expenses. However, Ms Holt made no submission in this matter, presumably because of the decisions of von Doussa J. in Secretary Department of Social Security v Banks (1990) 23 FCR 416 and Secretary Department of Social Security v a'Beckett (1990) 12 AAR 212, and the decision of O'Loughlin J. in Secretary Department of Social Security v Hulls (unreported, delivered 28 February 1991).
The submission was put, however, that the amount of $2,716.68 was not compensation as defined by the Act. Before the Tribunal, the principal argument put was that the sum payable by G.J. Coles Limited was a mere ex gratia payment and was not paid under an award of the Compensation Court. This argument was not pursued before me by Ms Holt. Ms Holt conceded that the sum paid was payable pursuant to a contractual arrangement into which Mr Baker and his employer had entered. Ms Holt submitted, however, that as it was a term of the contract that Mr Baker should resign from his employment, it could not be said that the payment was a payment by way of compensation or a payment in respect of an incapacity for work.
However, this submission overlooks the terms of s.152(2)(a) whereby a payment by way of compensation is defined to include a payment in settlement of a claim under a scheme of compensation provided by law of the Commonwealth or of a State or Territory. The claim made by Mr Baker was such a claim. It was that claim which was settled and the fact that the settlement included a term that Mr Baker should resign from his employment did not preclude the payment under the settlement being a payment "in whole or in part, in respect of an incapacity for work". Mr Baker's claim had been a claim in respect of his incapacity for work. The settlement was made with respect to that claim and the clause as to his retirement was not inconsistent with the settlement of that claim. Mr Baker had claimed that he had suffered an injury in the course of his employment which disabled him from carrying on the trade of butcher in the future. His claim in the Compensation Court alleged that he was totally incapacitated. The provision for his retirement, therefore, merely brought his relationship with the employer to an end, thereby accepting his total incapacity for work as a butcher with G.J. Coles Limited. On this basis, he agreed to receive and his employer agreed to pay him the sum of $15,000 in respect of the incapacity which he claimed.
Once the payment is characterised as a payment received in whole or in part in respect of an incapacity for work, then s.152(2)(c) operates and, in the circumstance that there was a settlement after 9 February 1988, it provides that 50% of the lump sum payment is to be deemed to be the payment by way of compensation. This is a purely arbitrary figure but it overcomes the problem which might otherwise arise in a case where the consideration for the lump sum payment contains an element referable otherwise than to incapacity for work. A number of cases were cited to me in the course of argument but I need not discuss them. The present provisions of s.152 have overcome many of the difficulties which the Administrative Appeals Tribunal and this Court have earlier encountered in this aspect of the law.
It appears to me that the decision of the Administrative Appeals Tribunal was correct for the reasons given by the learned Deputy President. The device which was adopted in the settlement arrived at on 10 November 1988 was ineffective to avoid the provisions of Part XVII of the Social Security Act. In this respect, I agree with the submissions put by Mr A. Robertson, with whom Mr S.J. McMillan appeared for the respondent.
For these reasons, the appeal must be dismissed with costs.
0
1
0