Baker, W.G. v Australian Telecommunication Commission

[1987] FCA 333

CATCHWORDS

Administrative Law \ - Compensation (Commonwealth Government Employees) Act - recovery of overpayment - review of decision determining rate of repayment.

Administrative Decisions (Judicial Review) Act 1977

i	Compensation (Commonwealth Government Employees) Act 1971
Minister fo r Aboriginal Affairs & Anor. v. Peko Wallsend & Ors.
(1986) 66 A.L.R. 299
No. G89 of 1986 WILLIAM GREGORY BAKER V. AUSTRALIAN TELECOMMUNICATION CONMISSION
FORSTER, J. ADELAIDE 26 JUNE, 1987

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IN THE	FEDERAL COURT OF AUSTRALIA	)
)

SOUTH AUSTRALIA DISTRICT REGISTRY	)	No. G89 of 1986
)
GENERAL DIVISION	1

B E T W E E N :

WILLIAM GREGORY BAKER

i

Applicant

- and -

AUSTRALIAN TELECOMMUNICATION

COMMISSION

Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER	FORSTER J.
WHERE MADE	ADELAIDE
DATE OF ORDER	26 JUNE 1987

THE COURT ORDERS THAT:	, _
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1. The decision of the respondent made on 8 December 1986 I .

to deduct $127-89 per week from the compensation payable to the

applicant be quashed.

2. The order quashing the decision of 8 December 1986

operate from 8 December 1986.

3 . (a) the respondent within 42 days of this day determine

I according to law the rate of deductions to be made from

compensation payable to the applicant from 8 December 1986;

should the amount of the deductions in fact made between 8 December 1986 and today exceed the total to be deducted in

(b)

2.

accordance with the decision to be made pursuant to sub-paragraph t

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(a) in respect of that period, the respondent shall not make any

deductions to be made after this day until the amount of any

excess has been exhausted;

(C) should the amount of deductions in fact made between 8

December 1986 and today be less than the total to be deducted in

accordance with the decision to be made pursuant to sub-paragraph

(a) in respect of that period, the respondent shall not increase

the amount deducted from the compensation payable to the

applicant beyond the amount determined pursuant to sub-paragraph

(a).

4 . The respondent be allowed 28 days after it makes its

determination in accordance with the preceding order to make any

adjustments which are necessary to the payment of compensation to

the applicant.

- Note: Settlement and entry of orders is dealt with in Order 36

of the Federal Court Rules.

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IN THE FEDERAL COURT OF AUSTRALIA )

)

SOUTH AUSTRALIA DISTRICT REGISTRY ) No. G89 of 1986

1 , -:

DIVISION	GENERAL	1
B E T W E E N : WILLIAM GREGORY BAKER

Applicant

; -.

- and -

AUSTRALIAN TELECOMMUNICATION

COMMISSION

Respondent

REASONS FOR JUDGMENT

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CORAM: Forster, J.:

In this matter the applicant, William Gregory Baker

("Baker")	seeks	the	review	pursuant	to	the	Administrative
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Decisions (Judicial Review) Act of three decisions made by the

respondent, the Australian Telecommunication Commission or its

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delegate concerning the recovery of overpayments of compensation. - -.

The facts giving rise to the overpayment of compensation

pursuant to the Compensation (Commonwealth Government Employees)

- 1971 Act ("the Act") are not in dispute. The applicant

sustained personal injury arising out of his employment with the

Commonwealth on 16 February 1981 - namely aggravation of

polymorphous light eruption by exposure to fluorescent lighting.

On 26 January 1986 a delegate of the Commissioner for Employees

Compensation determined that the applicant was deemed to have

been totally incapacitated fo r work since 21 December 1982 and

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l - * &

2.

that the respondent was liable to pay compensation to him in

accordance with s.45 of the Act from 21 December 1982.

From 21 December 1982 the applicant was also in receipt of a superannuation pension, part of which was not attributable

to contributions made by him. The amount of compensation

payable to the applicant was calculated without regard to that

part of the superannuation pension not arising from the

applicant's contributions and also without taking into account

the applicant's partial earning capacity. The failure of the

Commissioner for Employees Compensation to take these two factors

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into account resulted in an overpayment of compensation. As at

8 December 1986 this overpayment was assessed at $9,035-32.

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The respondent sought to recover the overpayment.

Following discussions between the parties two amounts of $20-00

were deducted in October 1985, but these deductions were

terminated due to the absence of a complete agreement.

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Due to a misunderstanding of the application of the Act,

a delegate of the respondent, Hr Ireland believed that he was not

entitled to recover any overpayments made prior to 26 July 1984.

Submissions were made as to the effect of what amounted, it was

said, to a waiver and whether or not it could be revoked. Hr

R.G. Griffiths ("Griffiths") a senior delegate of the respondent

gave evidence that the waiver was first put to Baker in a letter

from Ireland dated 4 October 1985 in the form of a proposal that

recovery "will only take place over a twelve month period prior

to 25.7.85." I take this to mean that it is proposed that

3 . i;-

recovery will only take place with respect to overpayments which

took place during this twelve month period. Griffiths said that

this proposal was "decided against" by him in October 1986

following the receipt of legal opinion.

The applicant was given leave on the final day of the

hearing to include this decision to recover overpayments made

outside this twelve month period in the application for review.

The applicant submitted that the decision to revoke the proposed

waiver was improperly made as the receipt of legal opinion

correcting the misapprehension was an irrelevant consideration.

F . I

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I have no trouble in rejecting this submission. It is I

obvious that a correct interpretation of the relevant statutory

i	provision is necessary to the proper exercise of a delegate's
power. A failure to consider the correct legal position would
be an abuse of the administrative process. Therefore the
application to review the first decision is refused.

On 4 November 1986 a decision was made to deduct $106-89

per week from the compensation payable to Baker. Following the	I (
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receipt of further information	in regard to Baker's partial	t
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earning capacity, on 8 December 1986 a further decision was made

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to deduct $127-89 per week which was the entire weekly amount of

compensation payable to the applicant. The decision of 4

November 1986 was overtaken by the decision of 8 December 1986

and I see no point in examining the earlier decision to see if it

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should be reviewed.

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The decision as to the amount to be deducted in recovery

of the overpayment was the main issue of dispute. This Court is not concerned with an assessment of the merits of the decision but rather whether the applicant has established a ground for the

granting of a review in s.5 of the Administrative Decisions

(Judicial Review) Act. Griffiths was the delegate responsible

for deciding the amount of the deductions from compensation. objective assessment of Baker's ability to repay the overpayments

of compensation. Griffiths admitted that if Baker had been, in

his view, an honest man a lesser deduction would have been

adopted and that, apart from the fact that there was money owed,

Baker's perceived dishonesty was the most important factor in

making his decision. The likelihood of hardship to Baker caused

by the level of repayments to be deducted from compensation was

not taken into account. On the last day of the hearing it was

conceded by the respondent that the decision of 8 December 1986

should be reviewed on the footing that the decision-maker had not

taken into account Baker's capacity to pay when fixing the amount

of the deduction to be made.	In	my view this concession was
rightly made.

While Griffiths is to be commended for the frank nature

of his testimony he must be criticised for the method by which he

exercised his power to make the relevant decision. The reasons

stated by Griffiths in evidence show an improper exercise of the

power delegated to him under the Act.

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The decision of the respondent made on 8 December 1986

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must be quashed and remitted to the delegate so that a fair and

reasonable assessment of the rate of repayment can be made in

good faith and taking into account relevant considerations in

particular Baker's capacity to pay bearing in mind his reasonable

commitments.

l The applicant submitted that I should determine the

amount of repayment or direct the respondent as to a possible

range of amounts of repayment. This mistakes the role of this

Court. Section 16(l)(b) ofthe Administrative Decisions

(Judicial Review) Act does not empower the Court to substitute

its decision for that of the decision-maker -

I "The limited role of a court reviewing the exercise

of an administrative discretion must constantly be	i.,
borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which
the legislature has vested in the administrator. discretion, and a decision made within those

boundaries cannot impugned be (wesnesbur

Cor oration at 228). I' (Minister for A or1 Lna 4

&Another v. Peko Wallsend and Others

(1986) 66 A.L.R. 299 at 309 per Mason J.)

This principle does not prevent me from making orders

with respect to the operation of the order to quash and the operation of the fresh determination. It is appropriate that the order quashing the decision of 8 December 1986 operates as

from 8 December 1986. Any deductions made after 8 December 1986

must be taken into account together with the rate of deduction as

lawfully assessed. This may result in a surplus or shortfall of

assessed deductions. No further deduction should be made until

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the surpluc, if any, is exhausted but in the event of a shortfall

no greater deduction should be levied.

The respondent should determine the rate of deduction

within forty-two days of this date and should make any

adjustments to the rate of payment of compensation which are

necessary within a further twenty-eight days.

The applicant submitted one further matter and this is

that s.119 of the Act only gives the Commonwealth power to

recover amounts of overpayment where a debt arises from a

judgment in proceedings to recover the overpayment.

*'119. (1) Where -

(a)	an amount of compensation under this Act has been paid to a person in consequence of a false or misleading statement or
representation or in consequence of a

failure or omission to comply with a

I provision of this Act:

(b) an amount of compensation that has been paid to a person under this Act should not have been paid; or

(c) a person is liable to pay an amount to

the Commonwealth under this Act,

the amount concerned is recoverable by the

I	Commonwealth from the person as a debt due to the Commonwealth by action i a court of competent jurisdiction.
(2) where an amount is recoverable by the !
Commonwealth from a person in pursuance of
the last preceding sub-section and n amount
is payable under this Act to or for the
benefit of that person, the first-mentioned I'
amount deducted be may from the l

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second-mentioned amount."

7.

The interpretation submitted applicant by he

I ' misconstrues the section. The effect of s.119(1) is to empower

the Commonwealth to take legal action to recover any overpayment

if it is necessary to do so. The effect of s.119(2) is that

where an amount is capable of recovery under sub-s.(l) it can be

recovered by making deductions from compensation payable to a

person under the Act. There is no requirement that a judgment

debt must exist before deductions can be made.

For these reasons the application to review the decision

of 8 December 1986 must succeed, the decision be quashed and the

matter ecommitted to the respondent or its delegate to

reconsider the appropriate rate of deduction. I will hear

counsel on the question of costs.

I certify that this and

the preceding pages are

a true copy of the Reasons

for Judgment of Mr Justice

Forster. II

Associate ({A. c

Counsel for the applicant	Mr D. Willson
Solicitors for the applicant	Lee and Partners
Counsel for the respondent	Mr J.J. O'Halloran
Solicitors for the respondent	Australian Government
Solicitor
Date ( S ) of hearing	27 March, 27 May & 10 June,
1987

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