Barbaro v Leighton Contractors Pty Ltd

[1980] FCA 73

Re: ANTONIO BARBARO
And: LEIGHTON CONTRACTORS PTY. LIMITED (1980) 44 FLR 204
F.C. No. 8 of 1979
Workmen's Compensation Ordinance 1951 - Evidence

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Smithers(1), Connor(2) and Franki(3) JJ.

CATCHWORDS

Workmen's Compensation Ordinance 1951 - Payments of compensation on basis of total incapacity made voluntarily - Cessation of such payments without agreement or arbitration - Effect of paragraph 12 of First Schedule of Ordinance - Application by worker for arrears of payments and for award on basis of continuing total incapacity or alternatively partial incapacity - Whether onus of proof as to continuance of total incapacity on employer or worker - Whether onus of proof of partial incapacity on worker.

Workers' Compensation - Incapacity - Liability admitted by employer - Voluntary weekly payments made by employer to worker pursuant to Ordinance - Payments based on total incapacity - Payments stopped by employer - Application for arbitration by worker - Whether payment may be stopped or varied without agreement or arbitration - Onus of proof - Whether employer to prove continuing total or partial incapacity - Workmen's Compensation Ordinance 1951 (A.C.T.), s. 7 (1), First Schedule pars. 1 (b), 1 (c), 12.

Evidence - Onus of proof - Workers' compensation - Incapacity - Liability admitted by employer - Employer made voluntary weekly payments to worker pursuant to Ordinance - Payments based on total incapacity - Payments stopped by employer - Worker applied for arbitration - Whether employer to prove continuing total or partial incapacity - Workmen's Compensation Ordinance 1951 (A.C.T.), s. 7 (1), First Schedule pars. 1 (b), 1 (c), 12.

HEADNOTE

The appellant was accidentally injured in the course of his employment with the respondent. The respondent promptly admitted liability and made weekly payments to the appellant in accordance with the provisions of the Workmen's Compensation Ordinance 1951 ("the Ordinance") on the basis that the appellant was totally incapacitated for work. The respondent discontinued the weekly payments in March 1977 and the appellant commenced proceedings two months later in the Court of Petty Sessions of the Australian Capital Territory seeking arbitration with respect to compensation payable to him. The court dismissed the application and an appeal was made to the Supreme Court of the Australian Capital Territory which in turn dismissed the appeal. The appellant then appealed to the Full Court of the Federal Court of Australia.

Held: Per Smithers and Franki JJ., Connor J. dissenting - The appeal should be dismissed because: (1) The onus of proof lay with the respondent to show that total incapacity had ceased.
(2) In the present case the appellant was not totally incapacitated for work at the relevant time.
(3) When it was shown that the total incapacity had ceased then the onus passed to the appellant to prove, on the balance of probabilities, his entitlement to an award on the basis of partial incapacity.

Phillips v. Commonwealth (1964), 110 CLR 347, applied.

Commonwealth v. Muratore (1978), 53 ALJR 98, distinguished.

J & H Timbers Pty. Ltd. v. Nelson (1972), 126 CLR 625, referred to.
(4) The appellant had failed to prove that during the relevant period he had suffered any economic loss.

Held, per curiam - that the effect of par. 12 of the First Schedule of the Workmen's Compensation Ordinance 1951 was that once weekly payments "payable under" the Ordinance have been made, such payments may be varied by agreement or arbitration but may not be ended or varied otherwise.

Thiess Bros. Pty. Ltd. v. Carbone (1976), 15 ACTR 15, referred to with approval.

Quinn v. McCallum (1908), 2 BWCC 339; Cory Bros. & Co. Ltd. v. Hughes, (1911) 2 KB 738; North's Navigation Co. Ltd. v. Batten (1933), 26 BWCC 525; Western Australian Coastal Shipping Commission v. Wallner (1979), 26 ALR 591, referred to.

HEARING

Canberra, 1979, July 25-27; 1980, May 27. #DATE 27:5:1980

APPEAL.

Appeal from a decision of the Supreme Court of the Australian Capital Territory, (Blackburn C.J.).

F. X. Costigan Q.C. and G. J. D. Richardson, for the appellant.

I. F. Byrne and F. Gordon, for the respondent.

Cur. adv. vult.

Solicitors for the appellant: Romano & Verducci.

Solicitors for the respondent: Sneddon Hall & Gallop.

E. F. FROHLICH

ORDER

1. The appeal to this Court is dismissed.

2. There shall be no order as to the costs of the appeal to this Court.

JUDGE1

Section 7(1) of the Workmen's Compensation Ordinance 1951 (as amended) (the Ordinance) provides that:-

"If personal injury by accident arising out of or in the course of his employment by his employer is caused to a workman, his employer shall, subject to the Ordinance, be liable to pay compensation in accordance with the First Schedule to this Ordinance."

On 22 September 1975 the appellant suffered injury arising out of or in the course of his employment with the respondent. Immediately after the appellant was injured the respondent commenced weekly payments to him of an amount equal to the weekly payment payable pursuant to para. (1)(b) of the First Schedule. It is conceded that the original payment and indeed all payments thereafter were made on the basis that injury was suffered by the appellant and that at least for some substantial period after sustaining his injury he was thereby totally incapacitated for work. Weekly payments were made until a date in March 1977. From that stage the respondent made no payments at all.

However, it is provided by para.12 of the First Schedule, so far as material, that "A weekly payment . . . payable under this Ordinance may be varied or ended by agreement or by arbitration under this Ordinance". It would appear that the effect of para.12 of the Schedule is that once weekly payments "payable under" the Ordinance have been made not only may such payments be varied or ended by agreement or by arbitration but the same may not be ended or varied otherwise. The consequence of this is in my view, for reasons disclosed below, that where the weekly payments have been made on the basis of total incapacity the relationship between the employer and the workman is in substance the same as would exist if there were an award on the basis of total incapacity in favour of the workman. As was pointed out by Northrop J. in Thiess Bros. Pty. Ltd. v. Carbone and Anor (1976) 15 A.C.T.R. 15 the appropriate procedure to be adopted by an employer desiring relief from payment of weekly payments which he has paid, even voluntarily, is to apply for such relief by an application pursuant to rule 7 of the Workmans Compensation Rules using Form No. 5 provided in such rules.

In this case, the employer having ceased to make the weekly payments but not having taken any legal proceeding seeking to have the same ended or varied by agreement or arbitration, the appellant on 20 May 1977 commenced proceedings under the ordinance seeking an arbitration "with respect to the compensation payable to him". The terms of the application showed that questions had arisen:-
"(a) As to whether the said Applicant is a workman whom the abovementioned Ordinance applies;

(b) As to the liability of the said Respondent to pay weekly compensation under the abovementioned Ordinance in respect of the injury.

(c) As to the liability of the said Respondent to pay medical, hospital expenses incurred by the Applicant since the 22 day of September, 1975.

(d) As to the liability of the said Respondent to pay arrears of weekly payments to the Applicant."

Paragraph 3 of the application stated, "An arbitration under the abovementioned Ordinance is requested between the said Applicant and the said Respondent for the settlement of the said questions". Under the heading, "Particulars of incapacity for work, whether total or partial and estimated duration of incapacity" the information supplied was "total and permanent."

Notwithstanding the absence of a separate initiatory proceeding on the part of the respondent seeking to have the weekly payments which had been paid varied or ended in accordance with para. 12 of the First Schedule, the terms of the applicant's application were comprehensive enough to permit and indeed require an adjudication on the issue as to whether such weekly payments should be varied or ended. But although that is so, it was necessary that it be recognised that the appellant should have full advantage of the situation arising from the payment of the weekly payments, namely that until it appeared that the weekly payments ought to be varied or ended the respondent's liability to continue to pay the same persisted. Unfortunately para. 12 of the First Schedule appears to have been overlooked by all parties and not brought to the notice of the learned Magistrate.

It is apparent that as a matter of evidence the appellant's case rested in the first instance on the fact that weekly payments had been made. Had the matter stopped there the case for an award on the basis of total incapacity would have been complete. Whether or not this would have been so in the absence of para.12 of the First Schedule it is clear that in the presence of para.12 and in the absence of evidence that the appellant was no longer totally incapacitated for work the appellant would have been entitled to an award. But more did occur, namely evidence was given going to the question of the existence and extent of the appellant's incapacity on the basis of which it was contended by the appellant and contested by the respondent that there should be an award for the appellant. Issues were raised with respect to which the Magistrate stated "for practical purposes the issue before me is whether the applicant has any and if so what incapacity for work since March 1977".

The learned Magistrate approached this issue on the basis that the onus of proof of the existence and extent of incapacity for work was on the appellant. It is said by the appellant that in this he was in error. The decisions of the High Court, in particular J.H. Timbers Pty. Ltd. v. Nelson (1971-72) 126 C.L.R. at 625, were relied upon. The Magistrate correctly accepted the view that for the purpose of entitlement to workman's compensation it was necessary that there be not only physical incapacity but also economic incapacity supervening thereon. Because para. 12 of the First Schedule was overlooked he took the view that the appellant carried the onus of proof of both elements of incapacity. The Magistrate's finding was that although the appellant demonstrated a continuing physical incapacity he had not demonstrated to his satisfaction that economic loss had supervened. The result was that he made an award in favour of the respondent.

On appeal it is put by the appellant that because of the operation of para.12 he was entitled to an award unless the respondent satisfied the learned Magistrate that the total incapacity by reference to which the weekly payments had been made had ceased. This is a sound view. But because of the error which had crept into the proceedings in that para.12 was overlooked the Magistrate did not address himself to the question as to whether or not he was affirmatively satisfied that the incapacity by reference to which the weekly payments had been made had ceased. And if the appellant relied on the situation arising out of the weekly payments having been made, it was necessary that the Magistrate should have directed his mind to the question whether on the evidence he was satisfied that the total incapacity by reference to which those weekly payments had been made had ceased. If such a finding had been made the question would have arisen as to whether there was any, and to what extent, economic loss supervening upon physical incapacity to support the making of an award on the basis of partial incapacity under para. 1(c) of the First Schedule. The result was that the prima facie case entitling the appellant to an award securing to him the continuance of weekly payments was ignored and the case upon which the respondent might have contested the making of such an award was not dealt with.

It is fundamental to the issues raised in the proceedings, that the entitlement if any of the appellant depended upon the provisions of s.7 of the Ordinance to the effect that in the case of compensible personal injury the liability of the employer is to pay compensation in accordance with the First Schedule to the ordinance. The First Schedule is headed "Scale and Conditions of Compensation". Paragraph 1 provides that:-
"The amount of compensation shall be -

(a) where the death of the workman results from the injury - . . . (a sum specified);

(b) where the workman is totally incapacitated for work by the injury - a weekly payment during his incapacity of . . . (sums specified according to circumstances) . . . ; and

(c) where the workman is partially incapacitated for work by the injury - a weekly payment during his incapacity . . . (sums specified according to circumstances) . . . ".

It appears to me that in the proceedings before the Magistrate, the issues before the Court were:-

(a) whether pursuant to para.12 of the First Schedule there was in respect of the period between March 1977 and 20 May 1977, any liability in the respondent to pay compensation on the basis either of total or partial liability;

(b) whether as at and from 20 May 1977 there was a liability in the respondent to pay compensation in accordance with para. (1)(b) of the First Schedule; and,

(c) if the answer to issue number two be in the negative, whether as at and from 20 May 1977 there was a liability in the respondent to pay compensation in accordance with para. 1(c) of the First Schedule.

In proceedings for compensation where weekly payments have not theretofore been made and there is no previous award the workman would bear the onus of proof of injury, of that injury having arisen out of or in the course of his employment, and of the extent to which the saleability of his labour in the market was reduced by his injury. But in relation to the appellant's application of 20 May 1977 for an award of compensation the situation was different because weekly payments on the basis of total incapacity had been made by the respondent to the appellant for some eighteen months. The respondent had ceased to make such payments as from March 1977 without any agreement or sanction pursuant to para.12 of the First Schedule. This was contrary to law. The respondent could not gain any benefit from this breach of the law. Accordingly in respect of issues (a) and (b) above the result is that in the proceedings of 20 May 1977 the applicant was entitled to an award for weekly payments on the basis of total incapacity unless it were established, not that there was no continuing incapacity for work, but that total incapacity had ceased.

On issue (c) above, if it arose, the onus of proof was on the appellant to satisfy the Court that he was partially incapacitated for work to some particular degree within the meaning of para.1(c) of the First Schedule.

Once the weekly payments had been proved there was no further onus of proof on the appellant until it was established that total incapacity had ceased.

It is convenient to notice, at this stage, that the touchstone of incapacity for work for the purpose of paragraphs 1(b) and 1(c) of the First Schedule is not merely the continuance of physical effects of the injury originally suffered but the non-saleability or reduced saleability of the workman's labour by reason of those continuing effects in a market for his labour reasonably accessible to him.

It is apparent from the learned Magistrate's reasons for his decision that he was not satisfied that, with respect to any material time, the appellant was totally incapacitated for work. But by reason of the payments of compensation on the basis of total incapacity the appellant was entitled to an award continuing such payments unless the respondent satisfied the Court that total incapacity had ceased. It is not apparent from the reasons of the learned Magistrate what his finding would have been if he had asked himself whether he was satisfied on the evidence that the appellant was not totally incapacitated for work with respect to the period commencing on 17 March 1977.

Because of the course taken by the parties in the proceedings the Magistrate did not ask himself this question. He did not realise that it was an essential question. His view was that it was for the appellant to satisfy him that he was totally incapacitated for work or partially incapacitated and to what extent. He was not satisfied on either counts, but that does not mean that the Magistrate would have made the finding that total incapacity did not exist as from March 1977 or from 20 May 1977 if he had addressed himself to the task of considering whether such a finding was appropriate on the evidence. All that the Magistrate was satisfied about was that some physical effects of the original injury persisted. He was not satisfied, however, that partial incapacity for work in the relevant sense, existed as and from May 1977. But this question would never have arisen unless it had been established by the respondent that total incapacity in the relevant sense did not exist.

It is necessary therefore to consider whether, on the evidence, a finding should have been made that, with respect to the period from 17 March 1977 to 20 May 1977, the appellant was not totally incapacitated.

General Factual Setting

On 22 September 1975 the appellant was 31 years of age. He was a native of Italy. He purports to have little or no skill in the English language and to be unable to read or write in his own language. He came to Australia in 1964 and worked as a contractor until some time in 1974 when he suffered a gall bladder infection. Having lost work because of his illness he decided to abandon contracting and work for wages. He said that by the date of the accident in which he sustained his injuries he was able to perform heavy labouring work. He had then been working for the respondent for about seven months. He stated that since the accident of 22 September 1975 he had been unable to lift heavy items or bend down. He also stated that he suffers persistent pain in his back, and has painful episodes of a few days duration two or three times a month. He said that he can no longer perform heavy labouring work and that he has done no work since September 1975. He would like to work but is not able to.

At the time of the accident the appellant lived with his wife and four children at Narrabundah in a house owned by him. Before the accident he had purchased a block of land in the suburb of Spence in the A.C.T. where he intended to build another family home. It was not that this existing home was too much to manage. It was that he wanted to build a new house. He said that during 1975 and 1976, but after his accident, he did erect a family home of 25 squares on that land.

The builder employed in connection with the erection of the new house was one Nino Raza. There was no contract with Raza. He did not give evidence. The new house is valued by the appellant at some $100,000, although he said that an insurance company, asked to lend money on the security of the house, valued it at $80,000. The appellant said that he did no work in the building of the house, that it was built by Raza assisted by the appellant's relatives. The appellant said that to finance the building at Spence he borrowed money from a finance company and a bank and obtained loans from friends and relatives. He said that since the respondent ceased to make weekly payments he had had no income and existed on money lent to him by both friends and relatives. According to the appellant he owed at November 1977, a total of $69,000, $48,000 on mortgages and $21,000 to relatives and friends for money borrowed from them. None of the lenders gave evidence and there was no evidence of the terms of the loans or the circumstances in which they were made. It was from these loans that he fed and clothed and generally maintained himself and his family. Included in his expenditure was the cost of a new Holden motor car which he acquired on hire purchase because his previous car was "no good". In respect of the mortgages on his house and the hire purchase agreement concerning his car the monthly commitments of the appellant as at November 1977 were more than $500.

During the period between the accident in September 1975 and November 1977 he had borrowed an additional $15,000 to invest in a toy joinery business in a partnership or company with a brother and two other persons. According to the appellant the returns from this business were insufficient to produce any income for him and after about seven months he withdrew, receiving back his $15,000 in full. The terms of the $15,000 loan do not appear in the evidence. During the same period he took the part of a guarantor in relation to a loan of approximately $15,000 obtained by his Brother Rocco Barbaro from a finance company. This loan was to enable Rocco to become a partner in the Little Joinery business. Rocco worked in that business for a time and was paid for doing so. The appellant said that he did not work at the joinery but went out "a couple of times to the office". According to the appellant it was just to see how the business was going.

The appellant's wife worked at the joinery for a short period and was paid $100 per week. In connection with obtaining loans from banks and finance companies the appellant made statements which he now says were untrue. He said he told these untruths because otherwise he could not have obtained finance for his house and for going into the joinery business and would not have been able to obtain finance for the new car and would have had to sell his new house. The substance of the untrue statements made were:-

1. that the joinery business was going quite well;

2. that as at May 1977 he was receiving an income of $650 per month;

3. that he was in receipt of a substantial sum, possibly $200 per week from the Little Joinery;
4. that he was working; and

5. that he was self employed in the Little Joinery.

The appellant said that since his accident he had not attempted to obtain any work. He said he had told the Insurance Company that he would take light work if the company found it for him. As to whether he could do light work he said that it depends, sometimes he feels well and sometimes he does not. He said that he did not look for work because he did not feel well and he did not know where to go about finding a job with light duties. He had not registered with the Commonwealth Employment Service; nor had he looked at newspaper advertisements. He had not thought of getting a part time job or getting a job at all. It is apparent that he has never applied for unemployment relief. He said that he has done no work in his garden since his accident and did no work in the building of the house at Spence. There was evidence from two neighbours at Narrabundah that from January 1976 until the appellant went to live at Spence they had never seen the appellant work in the garden. They said that he was not crippled but walked with a slow easy walk. There was evidence of a neighbour at Spence that he had never seen the appellant work in the garden or otherwise around his house and that he never saw the appellant do any work in the building of the new house.

The appellant's wife gave evidence that the appellant is not able to do anything, is not able to work, is not allowed to lift heavy things and is not able to go into the garden. She said that since September 1975 the appellant sometimes gets up, walks around a while and then goes back to bed. He sleeps in a normal bed. She did not mention that he wears a surgical neck collar at night.

Beyond those matters Mrs. Barbaro was rather vague. She said that all business matters were attended to by the appellant. Although she went with him on business occasions to help with his language problem she could not remember what had been said to the finance company or banks. Although she had made quite large payments to the bank, once as much as $13,000, she was unable to remember the circumstances or where that money came from. She explained "Tony handles all the papers. I don't know anything about these things".

One Gerardo Barillaro, a partner in the joinery business, confirmed that Rocco Barbero and the appellant paid $30,000 as part of an anticipated $58,000 to purchase shares in the business, but after a little while they decided to leave because there was not enough profit. He said that although the appellant came to the business on a few occasions he had never seen him do any work.

Medical Evidence Relative to Capacity for Work Physical or Other

So far as the medical evidence is concerned several doctors gave evidence viva voce or in writing. The doctor most favourable to the appellant was Dr. Newcombe. He first examined the appellant on 24 September 1977. He prescribed a collar to support the appellant's neck and advised that he sleep on a hard bed. Dr. Newcombe's opinion was that some permanent partial incapacity would appear to be inevitable because it would be inadvisable for him to return to heavy labouring duties. He accepted that the appellant suffered exacerbations of pain of between one and three weeks duration every three or four weeks. He appears to be of the opinion that the appellant had a condition of disc protrusion at the 4/5 lumber spine level. If that condition were confirmed by myelogram then an operation should be performed. Presumably this would relieve the appellant's symptoms. Dr. Newcombe attached significance to a neck and shoulder injury although he did not regard it as a major element in the injury. There were no X-ray records relating to the shoulder. The appellant had no recollection of injury to his shoulder or neck in the accident and apparently first mentioned it to a doctor on 19 November 1975. Dr. Newcombe conceded that although there were objective signs of injury his opinion rested basically on the appellant having been truthful to him in describing his symptoms.

It was the view of Dr. Golski who examined the appellant on a number of occasions between September and November 1976 that there was some injury to the appellant's left shoulder and some evidence of disc deterioration at L5 and S1. Under his direction the appellant underwent physiotherapy but found no change in his condition as a result thereof. Dr. Golski's conclusion was that "the situation should be accepted and the appellant should just avoid performing any heavy work".

Dr. Stenning on 6 October 1977 observed some slight narrowing of the L4/5 disc. He described the appellant's back as "powerful, stocky build with posture good". He found forward bending restricted so that outstretched fingers reach just below the knees. Other movements were not restricted but all are associated with low central back pain.

Dr. Cairns attended the appellant from November 1975 until June 1976. It was his opinion that the appellant had suffered a minor injury to his lumbo sacral spine and that he had at least a minimal organic basis for his continued complaints. He believed that there was a significant degree of psychological magnification of the appellant's symptoms and he doubted the accuracy of the appellant's symptoms. It was his final conclusion when he said:-
"I refer to all these findings simply to support my present opinion that the significant component in this man's continuing inability to return to work is largely psychogenic. All reasonable forms of conservative management have been tried, and at this point the only alternative treatment which can be offered to this man in my opinion is surgical, if his symptoms are in fact legitimately based upon an organic problem. However I cannot satisfy myself that this is in fact so and I do not believe therefore that he is a candidate for any form of spinal surgery.

I have therefore informed Mr. Barbaro that I can offer him nothing further in the form of management of his back pain and that my advice to him is to return to work allowing for the fact that he may not be able to return to heavy manual occupations but that he should certainly be capable of performing all but the most arduous of occupations.

It would seem therefore on the whole of the evidence as to the appellant's physical capacity for work the proper inference is that he is capable of work in any occupation which does not involve heavy lifting and repetitive bending. Accordingly there is a range of occupations which are suitable for the appellant's capacity. It is always difficult to specify such occupations, but vehicle driver, watchman, ticket collector, gate keeper, supervisor of workers in an establishment such as the Little Joinery or any factory and in modern industry there are sedentary occupations where watching processes are concerned.

However in the case of the appellant there are difficulties. His lack of knowledge in English is a serious handicap and greatly reduces the range of establishments in which he can expect to obtain work. In the search for light work he is likely to meet much competition and other applicants may be persons with no physical disabilities. On the other hand his nationality may assist him to find work in the Italian community. Obviously he has business initiative, is not without business acumen and it is far from clear that he would be rendered unable to earn money by being excluded from heavy labouring work. It is relevant that the applicant has made no attempt to find light work and had hardly given a thought to doing so. It is apparent that the appellant is not really interested in employment on light duties. The question is why this is so. The answer could be that the appellant is more interested in engaging in some business.

Credibility

The Magistrate observed that the appellant had received substantial sums of money and had given an unsatisfactory explanation in respect thereof. He found that the applicant was a person who would tell lies in order to achieve his own ends. This was manifestly so on the appellant's own statements. His credibility is thus inevitably very low.

Considerations Relevant to Inferences to be Drawn

According to the appellant, notwithstanding his accident, and shortly thereafter, while he was suffering its effects and under medical treatment which was not showing signs of bringing relief, he decided to erect the new house. He was then receiving weekly payments on the basis of total incapacity. The contemplated house was quite large and the project involved borrowing a large sum of money. Although he had an unspecified sum of money, possibly about $5000 it would be clear to the appellant that he would necessarily incur heavy interest payments and probably recurring payments on account of capital. He arranged for both bridging and long term finance. The sum borrowed could not be less than $40,000 which at interest rates common and notorious in 1975 and 1976 would involve payments of $80 per week at least. His wage as an employee of the respondent had been between $130 and $140 per week nett. On the appellant's evidence from September 1975 the appellant knew that he could not work, and, with increasing certainty thereafter, he must have realised that his chances of earning money by working were minimal. To keep himself and his four children on workman's compensation was a daunting prospect but to add to it another $80 per week would create a serious situation. And it was not that the house at Narrabundah was shown to have been too small or too difficult to manage, merely that the appellant wanted to build the new house. Not only did the appellant decide to build the new house but also to buy a new car. This he did about May 1976. The price is not disclosed but finance therefor involved repayments at the rate of $119 per month. In addition to the above the appellant borrowed $15,000 from a finance company to go into the Little Joinery project. These transactions were quite large for a man with a wife and four children on compensation with a disabling back condition, and no prospects of being able to work. It is said that to help him with his financial obligations he received loans from relatives and friends.

By March 1977 his monthly commitments were said to be $395 for loans on the house and $119 with respect to the car - $504 in all.

By that stage the appellant, according to his evidence, had been disabled for eighteen months and there was no sign of improvement. According to the appellant some short time before March 1977 he had commenced to borrow money from his relatives and friends and between about the beginning of 1977 and November 1977 he borrowed $21,000. From early in 1976 the appellant was faced with payments out of about $500 per month and he had to keep a family of six on workman's compensation and no prospects of any more. And yet throughout 1976 and until November 1977, he never gave thought to obtaining light work. From March to November, when he had no income at all, he did not register for light work or attempt to obtain unemployment or sickness relief. It seems that the house at Narrabundah was sold in January or February 1977. When he actually moved from Narrabundah to Spence does not appear.

It was apparently throughout 1977 that he was paid large sums of money by relatives and friends, namely $5000 by Rocco Andessa, $5000 from Antonio Pangello, $5000 from Carlo Pachiki and $3000 from Domenico Romeo who were apparently friends. Throughout 1977 until at the earliest about October 1977, it was the apparent intention of the appellant to continue to live in the new house and pay for it. During that time his hope of returning to work must have seemed very remote.

The reality of the situation must have been clear to the appellant in 1976. At that stage he still had the Narrabundah house and could have returned there, sold the new house, and satisfactorily resolved his financial problems. He did not do that but in 1976 borrowed $15,000 himself and guaranteed a further $15,000 loan for his brother and took on additional liabilities in respect of a new car. The purpose of the new car was said to be to go to the doctor and other unspecified journeys. But in the appellant's difficult situation that expenditure seems to have been an extravagance, especially as Mrs. Barbero said that his normal day was to get up move around the house for a couple of hours and then return to bed. But the one thing the neighbours did see the appellant do was drive his car.

It may well be that Italian families and friends are generous to their relatives and friends who need money. But if at the time the money was lent it was the intention of the appellant to continue to live in the house then there was no prospect of them ever being repaid, except perhaps out of some workers compensation settlement. In this latter event the appellant would have his large house and car but no income and no chance of any income. The appellant repudiated or at any rate put aside the notion that he hoped to repay them out of some redemption of workers compensation. Asked if he intended to sell the new house and if so, when, he said "as soon as anyone comes along to buy it". It was not until about a month before the hearing of the Workers Compensation case that, according to himself, he put the new house in the hands of an agent for sale. No particulars of price were suggested as having been discussed or arranged, and the appellant was unable to remember the name of the agent. When pressed he identified him as the agent who sold the Narrabundah house.

It is relevant that whatever the appellant's educational limits he was quite a successful business man. After being in Australia for 11 years he had accumulated a house at Narrabundah, a block of land at Spence suitable for a large and expensive house, an interest worth $7000 in land at Gunning, a car and some thousands of dollars in the bank. He had done this not by working for companies like Leightons, but by contracting on his own account. It was he who arranged for the loans and the joint investment supported by loans and a guarantee for the Little Joinery venture. It was he who controlled all the signing by himself and his wife and the payments in respect of the mortgages. It was he who had the initiative and the determination to tell lies, if they were lies, that he was working, and about the receipt of income, in order to raise the bank and finance company loans. To read the evidence is to confirm the Magistrate's finding that the appellant's evidence is unsatisfactory. He did not satisfy the Magistrate that he was not gaining from employment or business what may be called a full wage.

If he had addressed himself to the question whether on the evidence he should make a finding that by May 1977 the appellant had ceased to be totally incapacitated for work it would have been by reference to considerations such as those mentioned above that the answer would have been found. I do not doubt that the answer should have been, "Yes".

The question would have been whether he should or should not draw the inference with respect to the period from March 1977 to 20 May 1977 that the appellant was not totally incapacitated, in other words that notwithstanding his injury he was earning, or was able to earn, in some suitable employment or business at least some significant remuneration. In this connection it is apparent that the only occupation from which the appellant was excluded by his injury was one involving heavy lifting and repeated bending. It is clear that the appellant has not even attempted to seek any other class of employment. In addition it may be thought reasonably that the evidence reveals that since September 1975 the appellant has chosen a life-style and undertaken financial obligations beyond the capacity of a person whose only income was Workman's Compensation or at least has adopted a course of financial conduct out of accord with that to be expected in the light of common experience of a rational person in his postulated financial position. Where such a state of affairs exists it is proper for the Court to consider whether inferences may be drawn, as on a balance of probabilities, that there is an undisclosed explanation of the apparent improbabilities in the conduct disclosed. As was said by Dixon C.J. in Plomp v. The Queen (1963) 110 C.L.R. 234 at p.243 repeating what he had said in Martin v. Osborne (1936) 55 C.L.R. 367 at p.375:-
"If an issue is to be proved by circumstantial evidence, facts subsidiary to or connected with the main fact must be established from which the conclusion follows as a rational inference. In the inculpation of an accused person the evidentiary circumstances must bear no other reasonable explanation. This means that, according to the common course of human affairs, the degree of probability that the occurrence of the facts proved would be accompanied by the occurrence of the fact to be proved is so high that the contrary cannot reasonably be supposed. The circumstances which may be taken into account in this process of reasoning include all facts and matters which form constituent parts or ingredients of the transaction itself or explain or make intelligible the course of conduct pursued. The moral tendencies of persons, their proneness to acts or omissions of a particular description, their reputations and their associations are in general not matters which it is lawful to take into account, and evidence disclosing them, if not otherwise relevant, is rigidly excluded. But the class of acts and occurrences that may be considered includes circumstances whose relation to the fact in issue consists in the probability or increased probability, judged rationally upon common experience, that they would not be found unless the fact to be proved also existed." (See also Morgan v. Babcock & Wilcox (1929) 43 C.L.R. 163)
It should be observed that, certainly in a civil case, such an inference may be made not only where it provides the only rational explanation of the situation but where on balance it provides the probable explanation. In this case the fact to be proved by the respondent on the evidence was in the first instance that the appellant had other undisclosed income. There can be no doubt that on the evidence this inference is open. Even if the loans from relatives and friends were a reality the probabilities are little affected because the decision to take a course of action involving the assumption of heavy repayments was made before the loans were received and in any event the loans had to be repaid. Perhaps the most significant feature is that until, at any rate, a month before the hearing in November 1977 the appellant's intention was to continue to use the new house as his family home. To have built the house as an investment would have been one thing but to build it to live in must almost necessarily have proceeded on the basis that the appellant had other income. If the inference is drawn that the appellant had other undisclosed income regard might then be had to the most probable source of income. If the appellant chose to adopt some undisclosed method of earning money it is open to the Court in the case of a man with business ability, and experience to find that it was earned in business or employment. Accordingly it is open to the Court to draw the inference from the evidence that as at and shortly before 20 May 1977 the appellant did earn or was able to earn at least some substantial remuneration by way of wages or the proceeds of engaging in business. The history of the appellant's business activities, his experience as a contractor, his general entrepreneurial initiative and skill manifested in his association with the Little Joinery and otherwise, the necessity for the new car, the capacity to arrange large and complicated finance and the determination to transfer to a new large house all point to a confident man of business. To treat his conduct as that of a man who never expected to work again could well be regarded as quite unreal, indeed more than irrational. The question whether it was shown that the appellant had ceased to be totally incapacitated was not dealt with. The respondent was entitled to have it dealt with. In the circumstances this Court should deal with this actual question. In my opinion the evidence is such as to enable it to do so and I have no doubt that the appellant at the relevant time was not totally incapacitated for work.

Consequence in relation to the location of the onus of proof that total capacity has ceased

In the light of the foregoing, the appellant is entitled to an award only if he proves, on the balance of probabilities, that the circumstances are such as to entitle him to an award in accordance with clause 1(c) of the First Schedule on the basis of partial incapacity. It is, of course, arguable that it would be for the respondent to prove that the appellant was not partially incapacitated for work or that the degree of partial incapacity for work was of such minor degree that the weekly payments should be terminated or reduced. In this connection the form of award, set forth as Form 17 in the First Schedule to the rules under the Ordinance, is relevant:-
"Having duly considered the matters submitted, the Court hereby orders and awards as follows:-

(Here insert any introductory recitals of findings on which the award is made which the Court may direct.)

1. That the respondent, C.D. , do pay to the applicant, A.B., , the weekly sum of as compensation for personal injury caused to the said A.B. on the day of , by accident arising out of and in the course of his employment as a workman employed by the said respondent, such weekly payment to commence as from the day of , and to continue during the total or partial incapacity of the said A.B. for work, or until the same shall be ended, diminished, increased, or redeemed in accordance with the provisions of the above-mentioned Ordinance."
This form has been judicially approved. See Higgins v. Poulson (1912) 2 K.B. 292.

It may be accepted therefore that the Ordinance contemplates that in a case where an award has been made for weekly payments on the basis of total incapacity, the respondent remains liable, except, at least in special circumstances, to make such payments notwithstanding the cessation of total incapacity until the award is terminated or varied by a competent Court or perhaps by agreement. It may be argued from this that on an application to vary such an award the employer carried the onus of showing that circumstances had so changed, that not only had the workman ceased to be totally incapacitated for work but was not partially incapacitated for work or was able to earn in work or business an amount which would reduce the weekly payments on the basis of partial incapacity to some specified amount less than the current weekly payments.

In my opinion this does not follow. The form of the award provided for by Form 17 no doubt reflects the policy of Workmen's Compensation legislation that once an award is made the payments therein provided for shall continue until terminated or varied by the Court or by agreement. The workman is not to be harassed by an employer unilaterally terminating or reducing his payments on the allegation that the workman's incapacity for work had decreased, thereby putting the workman in the position of having to take action to prove, perhaps repeatedly, that his incapacity has not ended or decreased. It is a policy more than reasonable that the employer desiring relief from an award based on total incapacity should be required to obtain that relief from a Court on proof that there has been a change of circumstances going to the basis of that award. That policy is reflected in para. 12 of the First Schedule. Once weekly payments are made, on whatever basis, they are to continue until terminated or varied by agreement or by award. See Quinn v. McCallum (1908) 2 B.W.C.C. 339, Cory Bros & Co. Ltd. v. Hughes (1911) 2 K.B. 738, North's Navigation Co. Ltd. v. Batten (1933) 26 B.W.C.C. 525, and compare Western Australian Coastal Shipping Commission v. Wallner (1979) 26 A.L.R. 591 a decision of the Full Court of the Federal Court of Australia. But it does not appear to me that the factors abovementioned go to the question of the location of the onus of proof when relief is sought from weekly payments theretofore voluntarily made or under an award.

When relief is sought from an award based on total incapacity, no doubt the onus is on the employer to show a critical change in the circumstances upon which the award was based. Those circumstances comprise, in the words of s.7 of the Ordinance and para. 1(b) of the First Schedule, that the workman had suffered injury arising out of or in the course of his employment with the employer and that in consequence thereof the workman was totally incapacitated for work. When it is shown that one vital circumstance has changed, namely that total incapacity has ceased, then it is the turn of the workman to raise a case depending upon a new circumstance and a different statutory provision, namely para. 1(c) of the First Schedule activated by s.7 of the Ordinance. It is logical enough that the onus should then pass generally to the workman, particularly in relation to his lack of capacity to earn money in business or employment. In that connection the facts are necessarily known to him and not necessarily or even probably to the employer. The comments of Gibbs J. in J & H Timbers Pty. Ltd. v. Nelson (1971-1972) 126 C.L.R. 625 at 651 concerning the relative unimportance of the actual location of the legal onus of proof are very much in point because it may well happen, and no doubt does happen in countless cases, that the evidence for instance, of cessation of total incapacity may well indicate a continuance of partial incapacity. But in a case like the present there was danger to both parties if the location of the onus of proof were not clearly perceived.

There is a sense in which an employer who seeks termination or reduction of weekly payments, the subject of an award based on the total incapacity or of payments being made voluntarily on the basis of total incapacity, is alleging change of circumstances as a result of which the payments should be terminated or reduced. If the matter is looked at in this way and the application is seen as directed to liability, both for total and partial incapacity, as though the award were for total and partial incapacity, then proof of every circumstance necessary to reduce the award, as if it were an award for partial incapacity, would lie on the employer.

It is argued that the English decisions mentioned above should be read as proceeding on this basis, but I am not satisfied that this is necessarily so. However, in view of the decision in Phillips v. The Commonwealth (1964) 110 C.L.R. 347 and the remarks of Jacobs J. in Commonwealth of Australia v. Muratore (1979) 53 A.J.R. 98 concerning Phillips' Case this Court should not proceed according to that view. Upon my interpretation of those last mentioned cases I feel bound to adopt what seems the more analytical view. It would appear that the members of the High Court, while recognising the authority of the English cases, have taken the view that they are not incompatible with the general thrust of the decision in Phillips' Case. It may be noted that the liability of an employer under s.7 of the Ordinance is a liability "to pay compensation in accordance with the First Schedule to this Ordinance". According to that schedule the scale and conditions of compensation are laid down in paragraphs 1(a), 1(b) and 1(c). Proof of death, total incapacity or partial incapacity as the case may be, is a condition of an award based on the particular event relied on. The structure of the English Workmen's Compensation Act 1906 (as amended) is different. Section 1 of the Act created a liability in similar terms to s. 7 of the Ordinance of the A.C.T. but the First Schedule to the 1906 Act omits what is para. 1(c) of the Schedule to the Ordinance and para. 1(b) provides as follows:
"1 (b) where total or partial incapacity for work results from the injury, a weekly payment during the incapacity not exceeding fifty per cent of his average weekly earnings during the previous twelve months, if he has been so long employed, but if not then for any less period during which he has been in the employment of the same employer, such weekly payment not to exceed one pound."
To obtain an award under the 1906 Act proof of incapacity total or partial would provide the required basis. In such a case, mere proof of cessation of total liability would not go to the basis upon which the award rested but only to the measurement of the weekly payments payable. The 1906 Act was not affected materially save by the enactment of the English Workmen's Compensation Act (1925). The structure of that Act itself differs from the Ordinance of the A.C.T. under consideration in this case.

What I have called the analytical view, as I under stand it, is that an award based on total incapacity is not, in substance, an award based on total and partial incapacity and is subject to avoidance on proof of the circumstance that the total incapacity on which it was based has ceased. In this connection the provisions of Form 17, referred to above, are justified by the policy of the legislation that for the protection of the workman, an award shall persist so long as there is incapacity, be it total or partial, until set aside but this should not be seen to imply that an award based on total incapacity is inherently an award based on total and supervening partial incapacity. This more analytical view appears to me to reflect the policy of the legislation in combination with convenience logic and justice. It analyses the liability as arising under either para. 1 (b) or para. 1 (c) and places on those seeking relief from liability under one or other the onus of proving a change of circumstances relevant to the particular grounds of liability established by voluntary payments or awarded under para. 1 (b) or 1 (c), as the case may be. Once there is a finding that the appellant has ceased to be totally incapacitated for work liability under para. 1 (b) of the First Schedule as activated by s.7 of the Ordinance has ceased. If that is the only finding, it may be a question whether it operates in respect of the earlier total incapacity by way of subtraction, so to speak, so that some degree of incapacity either physical or economic remains. And, if economic incapacity remains, how much remains? It appears to me that the better view is that once the critical factor of total incapacity for work has been removed the respondent has destroyed the basis of the liability established by an award under para. 1 (b) of the Schedule or the liability which he had admitted by making payments at the rate for total incapacity and there is no ground for casting on the respondent any further burden, by saying to the respondent - "Well you have discharged total liability but you are liable for partial incapacity at some rate unless you show there is no partial incapacity for work or establish the amount payable pursuant to para. 1 (c) of the schedule."

In my opinion the true view is that in a situation such as existed in this case the appellant was at the outset of the proceedings in as strong a position as though there were an existing award in his favour imposing liability upon the respondent on the basis of total incapacity. If there had been an award it would have been based on an established incapacity for work, constituted in the words of Lord Loreburn in Ball v. William Hunt & Sons Limited (1912) A.C. 496, by "a physical defect in the appellant which made his labour unsaleable in any market reasonably accessible to him". It is this basis of liability which would terminate if the respondent established the change of circumstances on which he relies. When that occurrs, there is no basis of liability on the ground of partial incapacity on the theory that it had been wrapped up in the concept of total incapacity and was revealed by way of subtraction from that concept. In the case mentioned, Lord Loreburn said at p.500
". . . there is partial incapacity for work when such a defect (i.e. a physical defect in a man) makes his labour saleable for less than it would otherwise fetch."

It is a condition of entitlement to an award, in respect of partial incapacity, that there be proof that as a consequence of physical incapacity the workman's labour is saleable for less to a specified degree. It is logical that the burden of proving this, when there is no antecedent finding of partial incapacity under the Ordinance, should be on the appellant. In a case in which cessation of total incapacity for work is established, there may still be evidence of residual physical incapacity which has made the appellant's labour saleable for less than it would otherwise fetch. But that would merely mean that there was evidence available to the workman on the issue with respect to which the legal onus of proof is on him. And even in such a case, the degree of unsaleability would be peculiarly within the knowledge of the appellant. For the purpose of making an award on the basis of partial incapacity, in accordance with s. 7 of the Ordinance and para. 1 (c) of the First Schedule, the extent of the diminution of saleability of that labour would have to be established to implement the provisions of para. 1 (c).

In a case in which liability is established for payment of a weekly sum at a rate established by a workman on the basis of partial incapacity, it may be that at a later date the employer may desire to seek reduction or cessation of those weekly sums. In such a case the onus of proof would be upon the employer. This is because an employer challenging an award based on total incapacity or on partial incapacity must prove the relevant change of circumstances on which he relies. Where the award under challenge was based on total incapacity, the relevant change of circumstance is cessation of total incapacity (para. 1 (b)).

Where the award under challenge was based on partial incapacity and reduction of payments is sought, the relevant change of circumstances would be reduction in the diminuition of earning capacity suffered by the workman. In this exercise the employer is at the disadvantage that the relevant facts may be exclusively in the knowledge of the workman. However, there is a difference between the situation of an employer when he faces an original claim based on partial incapacity and that when he subsequently challenges an award based on partial incapacity. In the former, nothing has been established in relation to the workman's partial incapacity. In the latter, the employer has at least an established position to work from. In any event it is inevitable that an employer challenging an award should prove the relevant change of circumstances.

It would seem that arising out of the provisions of the Ordinance the concept of total incapacity for work differs in nature from that of compensible partial incapacity for work. The cause of action in respect of total liability depends upon s.7 of the Ordinance and para. 1(b) of the First Schedule, that in respect of partial incapacity depends on s.7 and para 1(c) of the First Schedule. The decision of Kitto, Taylor and Owen JJ. in Phillips v. The Commonwealth (1964) 110 C.L.R. 347 appears to me to be directly in point. In that case an employee received payments of compensation under para. 1(b) of the First Schedule of the Commonwealth Employees Compensation Act 1930-1956 (Cth) upon the basis of her total incapacity for work because of an employment injury. Later the Commissioner for Employees' Compensation determined that payments should end because she was no longer totally incapacitated. Upon appeal to the County Court she contended that she was still totally incapacitated, alternatively, partially incapacitated and thus entitled to compensation under par.1(c) of the First Schedule. It appears that,
"At the rehearing in the County Court the appelland submitted that on the evidence before him the delegate should have found that as from 16th November 1961 she was totally incapacitated for work, but his Honour Judge Dunn held that both on the finding in a certificate of a medical board given pursuant to s.19 of the Act and on the evidence before him it was clear that the appellant was not totally incapacitated for work. The appellant also argued that she was partially incapacitated for work, but the Judge held that on the material before him he was unable to find that the appellant was not capable of earning, in some suitable employment or business, a weekly amount not less than her pay at the date of the injury as since varied. He went on to say 'It was urged on behalf of the appellant that the onus of proof as to the amount the appellant is capable of earning in some suitable employment or business is on the respondent. In my opinion, that is not correct. I have not been able to find much authority on this point, but there is a decision of the Supreme Court of Queensland that the burden of proof of past and present earning capacity rests on the claimant for compensation (Adams v. Scott (2)). I think as a matter of principle that that is the proper view to take." (p.348)
At p.350 - 351 the Court said:-
"In the present case what had been initially established was that the appellant was totally incapacitated as, indeed, was the basis of her original claim for compensation, and immediately before the final determination of the delegate she held, in effect, an award establishing her entitlement to compensation in accordance with par.1(b) of the First Schedule to the Act. That award however, could survive only so long as she remained totally incapacitated. Apparently the delegate of the Commissioner was satisfied that she did not so remain after 16th November 1961 and upon the rehearing of the appeal to the County Court it was found as a fact that she was not totally incapacitated after that date. This finding is not challenged in this Court and indeed it could not be challenged, for it was founded upon a certificate of a medical board which s.19(4) makes conclusive evidence of the matters certified. Accordingly, it is clear that the applicant has no further right to compensation under par.1(b). But it is contended on her behalf that in order to secure the dismissal of her appeal to the County Court it was incumbent upon the Commonwealth not only to establish that fact, but also that after the date in question she was not partially incapacitated or, alternatively, that any remaining residual incapacity did not diminish her earning capacity. That is to say, that it was the appellant's contention that the onus lay upon the Commonwealth of proving facts showing, not only an absence of liability on its part under par.1(b) of the First Schedule, but also an absence of liability under par.1(c). There is, we think, some confusion in this contention. It may be that the issues before the County Court were not precisely defined but that the appeal had dual aspects is beyond question. In the first place, there arose for determination the question whether the liability of the Commonwealth to pay compensation to the appellant as a totally incapacitated employee should be brought to an end. Upon this issue the onus rested fairly upon the Commonwealth but, as already appears, it was discharged and the finding of the County Court cannot be challenged. Then arose the question whether compensation should be awarded to the appellant as a person partially incapacitated and with a diminished earning capacity. This, in effect, constituted the basis of a new claim not previously pronounced upon before its rejection by the Commissioner. On this issue the onus was, we think, clearly upon the appellant. Accordingly, we do not think that the learned County Court Judge made any error of law upon this point."

It was argued by Mr. Costigan that this decision should be seen as nothing more than an application of what was decided by the majority of the members of the High Court in J. & H. Timbers Pty. Ltd. v. Nelson (1971-72)126 C.L.R. 625, namely that in the case of a workman seeking an initial award the onus is on the claimant to prove "not only injury and incapacity for work but, where that incapacity is less than total, financial loss", per Menzies J. at 637. Mr. Costigan contended that in Phillips' Case the appellant was really seeking an initial award. He said, as I understood, that the proceeding in which the appellant lost the award in her favour, because it was shown that she was no longer totally incapacitated, was, or at least should be considered, quite separate from the proceeding in which she sought an award on the basis of partial incapacity for work.

He contended that this followed from the form of the proceedings and from the fact that the Commissioner under the Commonwealth Employees' Compensation Act was entitled not only to make determinations ab initio, but was entitled himself to vary or terminate any payment of compensation. It was argued that the Commissioner was the employer and to equate his position to that of the respondent in this case would be to say, but wrongly, that the respondent had the right to vary or terminate payments of compensation as did the Commissioner. It was also argued that the situation in the case before this Court was similar to that dealt with in Commonwealth of Australia v. Muratore (supra) at p.98 rather than that dealt with in Phillips' Case.

I am unable to accept the first contention. It appears to me that because the procedure was by way of rehearing (see Phillips' Case (supra) at p.349) the situation on the appeal to the County Court was precisely that obtaining in this case. At the outset of the proceedings the appellant was able to rely on the previous award having been made on the basis of total incapacity. It was held that the onus was on the Commonwealth to displace that award. This was accomplished by evidence in the appeal. The fact that it was accomplished easily by production of the certificate is not to the point. When that had been accomplished the appellant, as in this case, sought an award based on partial incapacity and was required to prove the elements necessary to support such an award. This she failed to do. It was in the same proceeding, namely the appeal, that all these issues were dealt with. It was that one proceeding which was said by the Court to have a dual aspect. The claim by the appellant in this case, in the proceedings brought by him, had similarly a dual aspect. In its first aspect the award equivalent arising from para. 12 of the First Schedule was in issue. As from 20 May 1977 that equivalent ought not to have survived if the finding had been made that total incapacity for work had then ceased.

In its second aspect the appellant's claim for an award on the basis of partial incapacity for work was in issue. On that the appellant carried the onus of proof.

In Muratore's Case (supra) the workman had the benefit of the equivalent of an award on the basis of partial incapacity for work. It was held that the Commonwealth's challenge to that award was on the ground of changed circumstances and that the Commonwealth carried the onus of proving a diminution of incapacity. In the case under appeal before this Court there is no challenge to any award already made in respect of partial incapacity. In Muratore's Case the previous finding of partial incapacity for work was regarded as critical. It was pointed out that the approach of the majority of the Court in Thompson v. Armstrong and Royse Pty. Ltd. (1950) 81 C.L.R. 585 does not support the submission that despite the reasoning in Phillips's Case the onus always lies on the employee to prove economic loss, even if he has in his favour a finding of partial incapacity for work. See per Jacobs J. at p.100. While deciding in Muratore's Case that the onus was upon the Commonwealth to prove diminution of the worker's incapacity for work, in the relevant sense, his Honour said at p.100 "The position is quite different if there has been no previous finding of partial incapacity with a consequent assessment of the compensation payable." It is established that in such a case the employee bears the onus of proving the partial incapacity for work and the degree of his loss of ability to earn. J.& H. Timbers Pty. Ltd. v. Nelson (1977) 126 C.L.R. 625.

The emphasis in Muratore's case is upon the indivisibility of the concept of partial incapacity for work in relation to its physical and economic aspects. As Jacobs J. pointed out:-
"An employee who has been found to be partially incapacitated for work has his incapacity measured by the extent that the amount per week that he is able to earn in some suitable employment or business is less than his average weekly earnings before his injury (see s.46(2) of the 1971 Act). His partial incapacity for work is only relevant in so far as such a measurement can be made, that is to say, in so far as it produces incapacity to earn the wages which he was previously able to earn. Therefore the Commonwealth, when it alleges that the employee is physically able to earn, in some suitable employment or business, a weekly amount which is not less than his weekly pay at the date of injury is alleging nothing relevantly different from an allegation that he has no physical incapacity for work producing an incapacity to earn those wages. The position would be no different if it were alleged that his degree of incapacity for work had diminished so that his compensation should be reduced. In both situations the Commonwealth is, or would be, alleging that the circumstances of the employee had changed; and the onus lies upon the party alleging the change of circumstances to prove it." (page 180)

The remarks of Fullagar J. at p.613 and Kitto J. at p.621 in Thompsons Case (supra) appear to me to anticipate what was said above by the learned Justice. In the critical phrase "incapacitated for work" the economic aspect is wrapped up in the words "for work". Thus in the words of Fullagar J. "A man is, totally incapacitated for work when he is by reason of his injury, physically unable to work" p.613. Kitto J. said at p.621: "Thus compensation is awarded, not for loss of wages, nor for impairment of physical condition per se, but for the economic aspect of that impairment, namely a lost or diminished ability to obtain wages by working."

In Muratore's Case (supra) Mr. Justice Murphy in a separate Judgment stated the effect of Phillips' Case in words which appear to summarise the matter with compelling clarity. At pp. 101-102 he said:-
"The problem in Phillips was somewhat different. The Commissioner varied his determination of total incapacity by finding that there was no total incapacity; in these circumstances the court held that on an appeal by way of re-hearing, the onus was on the Commonwealth to show that total incapacity had ceased, but if that onus were discharged (and there were questions whether the worker was partially incapacitated, if so and to what extent) the onus was on the worker to show that there was partial incapacity and the degree of partial incapacity."

In the result I find that between 17 March 1977 and 20 May 1977 the appellant, despite physical injuries supervening upon those he suffered in September 1975, was able to earn a substantial income in some employment or business and was not then totally incapacitated within the meaning of para. 1(b) of the First Schedule to the Workman's Compensation Ordinance 1951 of the Australian Capital Territory. Accordingly, the appellant at all times carried the onus of proving partial incapacity for work within the meaning of para.1(c) of the First Schedule of the Act. I am satisfied that the finding of the learned Magistrate that he was not satisfied that the appellant suffered any economic loss by reason of such injuries during the period referred to was one open to the Magistrate on the evidence and should not be disturbed.

Partial Incapacity

It was pointed out that the Magistrate said that but for certain aspects of the evidence he would have thought it proper to adjourn the matter to afford to the appellant an opportunity to call further evidence if he so desired. But in this case there was no reason to think that the appellant had not fully presented his case so far as he desired to do so. The appellant was under the impression that he carried the onus on the issues both of total, as well as partial, incapacity and in both the physical and economic aspects thereof. As was pointed out by the learned Magistrate, the case had not really been fought on partial incapacity. It is not to be thought that the course adopted by the appellant was not advisedly taken. He was not without advice. Reference to the course of proceedings before the learned Magistrate indicates that the appellant had every opportunity to supply any omissions in or tender any additions to the evidence he had submitted in the course of four separate hearing occasions between 18 October 1977 and 22 November 1977. After the case was closed it was stated on behalf of the appellant that it was not desired to call any other evidence. In those circumstances the question of whether the Magistrate of his own motion should suggest an adjournment for the purpose of giving the appellant an opportunity to call further evidence to support what was really an alternative case of partial incapacity was a matter purely in the discretion of the Magistrate. Indeed, I do not consider that the Magistrate would have been at fault had he not considered the matter at all. However, having considered it and having exercised his discretion for the reasons stated by him I see no reason why his decision should be treated as unsound. The Magistrate stated that he exercised his discretion in the way that he did because:-
". . . having regard to the unsatisfactory evidence and to the unsatisfactory explanation for these large sums of money that the applicant has undoubtedly received. I am not persuaded, on the balance of probabilities that the applicant has, as a consequence of this accident in fact an incapacity to earn money. I am not satisfied that he has suffered economic loss as a consequence of the injury in the period that is relevant for my present decision."

To my mind, the decision of the Magistrate not to adjourn the matter for further evidence reflected a conclusion by him that further evidence would not avail, and that this conclusion was really the effect on his mind of the total unreality of the alleged financial conduct of the appellant, considered as a person with no income and no prospects. Just as inferences might be drawn from these factors, as discussed above, in relation to the existence of a condition of total incapacity for work, so inferences may be drawn in relation to partial incapacity for work.

Mr. Costigan argued that there was really no need for further evidence, that in relation to a subject such as Workers Compensation the experienced tribunals dealing therewith frequently did and should recognise the impossibility of a workman providing precise evidence of the comparison of earnings he might have earned and can now earn and make a kind of experienced assessment on a broad basis. He contended that the Magistrate should have done that, and that if partial incapacity is relevant to this case, this Court should do it. But in this case one cannot really do this. The procedure to which Mr. Costigan refers is no doubt very sound in the ordinary case where physical incapacity is the governing factor in earning money and general bona fides are apparent. But in a case like the present it is impossible to feel any satisfaction that the Court has anything like a true picture of the appellant concerning his conduct in relation to earning money. Accordingly, like the Magistrate, I could not feel on a balance of probabilities that the appellant has satisfied me that during the relevant period he suffered any economic loss.

In the event therefore, the appeal should be dismissed. I consider that the costs of the proceedings before the Magistrate should be borne by the appellant in accordance with the order made by that Court. As to the costs of the appeal to the Supreme Court, it was the fault of both parties that an appeal to that court eventuated.

It being apparent that the basic cause of the difficulties arising in these proceedings was the conduct of the respondent in ceasing to make weekly payments in March 1977 in the absence of an agreement or arbitration authorising the same, and the respondent having successfully maintained in the Supreme Court that the respondent did not carry the burden of proving circumstances entitling it to end or vary the payments made by it until March 1977 with the result that the necessary finding of fact as to the continuance or cessation of total incapacity was not made or provided for in the Supreme Court, it is my view that each party to the appeal should bear its costs of these proceedings.

JUDGE2

This is an appeal from the Supreme Court of the Australian Capital Territory where Blackburn C.J. dismissed an appeal from the Court of Petty Sessions which in turn had dismissed an employee's claim for workers compensation and made an award in favour of the employer.

On 22 September 1975 the appellant Antonio Barbaro, (the workman) was employed by the respondent Leighton Contractors Pty. Limited (the employer). In the course of his employment he was walking on a concrete stormwater pipe which was placed across a trench. He slipped and fell to the bottom of the trench, a distance of two metres. Two fellow workers assisted him to the employer's site office where instructions were given that he be taken to the Woden Valley Hospital. At the hearing before the learned magistrate, who was the arbitrator, the workman was extensively cross-examined about other matters but was not asked any questions about the accident. The two workers who assisted him out of the trench, one of whom took him to the hospital, were at the hearing but neither was called by the employer who did not dispute that the workman attended the hospital. His back was there x-rayed and he was referred to an orthopaedic surgeon. He was at the hospital for three or four hours and then came under the care of his general practitioner who prescribed bed rest at home.

On 18 November 1975 the workman first saw the orthopaedic surgeon to whom he had been referred at the hospital. He was then complaining, amongst other things, of low back pain and pain in the left shoulder which had been present for a few weeks, although the workman had no recollection of having injured his neck or shoulder. This orthopaedic surgeon, whose reports were tendered by the employer concluded that the workman had sustained a combination of twisting injuries and a direct blow to the lumbar spine resulting in a minor injury to his lumbo-sacral spine.

The employer's insurer then began making weekly payments to the workman on the footing of total incapacity. The insurer continued making these payments and the workman continued to accept them for a period of about eighteen months until 13 March 1977 when the payments were unilaterally ended by the insurer. There was neither an award nor a recorded agreement in respect of these weekly payments. It was not suggested that the employer had requested a medical examination of the worker under paragraph 10 of the First Schedule of the Workmen's Compensation Ordinance 1951 as amended (the Ordinance). On 20 May 1977 the workman's solicitors took out an application claiming compensation. The learned arbitrator treated this as an original claim for compensation and on that basis regarded the workman as having the onus of proof on all issues. The learned arbitrator held that the workman had failed to discharge the onus principally because of unsatisfactory explanations he had given for large sums of money which he had undoubtedly received. Consequently the learned arbitrator made an award in favour of the employer.

In giving his reasons the learned arbitrator said that the worker was seeking an award for compensation on the basis of total and permanent incapacity for work. He said further that "for practical purposes the issue before me is whether the applicant has any and if so what incapacity for work since March 1977 . . ." (italics supplied). He said further:-
"I am satisfied on the evidence that the applicant suffered an injury to his back at work on 22 September 1975 and that . . . between the date on which compensation ceased and now the applicant has had, in the physical sense, a partial incapacity for work. I am not persuaded on the evidence that he is totally incapacitated for work, let alone totally and permanently incapacitated for work."
After examining the law the learned arbitrator, correctly in my view, concluded that he was concerned ultimately not with physical incapacity but with economic incapacity. He then went on to say:-
"So that the applicant has to persuade me, on the balance of probabilities, that he is unable to earn his pre-injury earnings. In order to succeed in a claim before me the applicant has to show that he is not able to earn the equivalent of his pre-injury earnings allowing the changes that may have occurred since the date of the injury and what people, in the category that he was, were earning. Now, of course, this case was not conducted on the basis of partial incapacity although the issue as to whether the applicant was incapacitated at all was very much raised by the respondent's counsel".

The learned arbitrator then went on to say that there was no evidence before him of what the worker could earn from his own physical efforts. Referring to the unsatisfactory evidence which the worker had given concerning his financial affairs, the learned arbitrator said that were it not for this feature of the case it may have been that the proper course for him to take would be to refrain from finalising the matter in order that the worker might have the opportunity of placing some evidence before him of what the minimum wage would be for someone who was partially incapacitated or even perhaps to attempt to establish that although he had only a partial incapacity for work he should nevertheless in the circumstances be treated as a person who was totally incapacitated for work as was done in Ruiz v. Canberra Rex Hotel Pty. Ltd. (1974) 5 A.C.T.R. 1. The learned arbitrator then concluded his reasons by saying:-
"But here having regard to the unsatisfactory evidence and to the unsatisfactory explanation for these large sums of money that the applicant has undoubtedly received I am not persuaded, on the balance of probabilities, that the applicant has, as a consequence of this accident, in fact an incapacity to earn money. I am not satisfied that he has suffered economic loss as a consequence of the injury in the period that is relevant for my present decision. There will be an award for the respondent".

I have come to the following conclusions and will deal with each of them in turn:-

1. The employer ceased payments in breach of the Ordinance;

2. The worker's application should have been treated on the footing that it was an application by the employer to vary or end existing weekly payments;

3. On an employer's application to review weekly payments the onus is on the employer either to show that the weekly payments should be ended or to put the learned arbitrator in a position to determine by what amount they should be reduced;

4. The learned arbitrator did not deal fully with the question of the worker's capacity to earn;

5. There should be a new trial.

The Employer Ceased Payments In Breach Of The Ordinance

Section 7(1) of the Ordinance provides that if personal injury by accident arising out of or in the course of his employment by his employer is caused to a workman, his employer shall, subject to the Ordinance, be liable to pay compensation in accordance with the First Schedule to the Ordinance.

The First Schedule provides in paragraph 1(b) and (c) for weekly payments for total and partial incapacity. Paragraph 10 provides that any workman receiving weekly payments shall, if so required by the employer, from time to time submit himself for examination by a legally qualified medical practitioner provided and paid by the employer and if the workman refuses to do so his right to such weekly payments shall be suspended until the examination has taken place. Paragraph 12, in so far as material to the present case, provides as follows:-
"A weekly payment . . . payable under this Ordinance may be varied or ended by agreement or by arbitration under this Ordinance".

The ratio of this decision has, with respect, proved to be elusive - see J. & H. Timbers Proprietary Limited v. Nelson (1971-1972) 126 C.L.R. 625 per Barwick C.J. at pp. 635, per Menzies J. at p.637, per Owen J. at pp.644, 645, per Gibbs J. at pp.650, 651 and The Commonwealth of Australia v. Muratore (1979) 53 A.L.J.R. 98 per Jacobs J. at pp.99-100 and per Murphy J. at p.101.

Phillips' Case seems in part at least to have turned on the nature of the appeal provision, namely s.20 set out above. It provided for a hearing de novo in the County Court leaving that Court "to pronounce anew upon the rights of the parties as disclosed by the evidence before it" (see p.350). In that situation the Court said "if a claim for compensation be rejected by the Commissioner or his delegate the onus of proving the necessary facts to entitle the applicant to what is virtually an award of compensation will be upon the claimant in later proceedings before the County Court" (see p.358). At p.351 the Court said:-
"Then arose the question whether compensation should be awarded to the appellant as a person partially incapacitated and with a diminished earning capacity. This, in effect, constituted the basis of a new claim not previously pronounced upon before its rejection by the Commissioner. On this issue the onus was, we think,clearly upon the appellant. Accordingly, we do not think that the learned County Court Judge made any error of law upon this point".

In The Commonwealth of Australia v. Muratore (1979) 53 A.L.J.R. 98 the employee had in his favour a determination of partial incapacity. The High Court held that the onus of proof of matter entitling the Commonwealth to have that entitlement of the employee reduced to nothing lay on the Commonwealth and not on the employee. The Court took the view that the Commonwealth was alleging a change of circumstances and therefore the Commonwealth had the onus.

On one view of Phillips' Case there would appear, with respect, to be a logical difficulty in reconciling the two decisions. It might be said that Phillips' Case is authority for the proposition that an employer seeking to end weekly payments, which are being made to a worker on the footing of total incapacity, has the onus of showing that the worker has fully recovered his capacity to work; but, if he seeks only to diminish such weekly payments, the employer has the onus merely of showing that the worker is no longer totally incapacitated and thereafter the onus passes to the workman to put the Court in a position to determine the amount by which his compensation should be reduced. On this footing the employer presumably would retain the heavier onus of showing that the worker had totally recovered his earning capacity but could discharge with comparative ease the lighter onus of showing that he had partially recovered it. Muratore's Case, on the other hand, holds that an employer seeking to end or diminish a weekly payment for partial incapacity has the onus of putting the Court in a position to determine the amount by which the compensation should be diminished.

The explanation appears, with respect, to be that the High Court in Phillips' Case did not consider that the issue of partial incapacity was encompassed in the issue whether a worker was or was not able to earn her pre-injury pay, but was an entirely new claim. So treated, the employee clearly had the onus of proof on all issues. I think this view of Phillips' Case is supported by the approval of the High Court of Quinn v. McCallum, Smeaton v. Taylor and Cory Bros. v. Hughes, all supra. In Quinn v. McCallum the Court of Sessions said:-
"It is for the employer who wishes to bring the payments to an end to establish his case by proof" (2 B.W.C.C. at p.341).
In Smeaton and Sons Ltd. v. Taylor the Court of Appeal said:-
"Where there is a recorded agreement and the application is to review, the onus is on the person making it to prove the change of circumstance on which the application is based." (26 B.W.C.C. at p.370).
In Cory Bros. and Co. Ltd. v. Hughes, Cozens-Hardy M.R., with whom Buckley and Kennedy L.JJ. agreed, said:-
"there is an express power given to either party to review the amount of compensation, which may be either increased or diminished or terminated. The employer may say 'I am now paying you too much'; the man may say "You are now paying me too little'; or the employer may say "I ought now to pay you nothing at all'. But whoever makes that application is the person on whom the burden of proof lies." - (1911) 2 K.B. at p.743.
In Phillips' Case the High Court said (at p.350):-
"We do not doubt the authority of those cases and think they clearly establish the validity of the propositions we have set out."
One of the propositions which the High Court had just set out was the following (also at p.350):-
". . . the application of the ordinary principles relating to the determination of disputed questions of fact by judicial tribunals requires the conclusion that if a claim for compensation be rejected by the Commissioner or his delegate the onus of proving the necessary facts to entitle the applicant to what is virtually an award of compensation will be upon the claimant in later proceedings before the County Court. Likewise, the application of the same principles may well mean that in some cases the onus of proving critical facts may rest upon the Commonwealth. Such a case would be where the Commissioner has purported to terminate an employee's right to compensation under an antecedently existing determination by reason of a material change of circumstances."
In the light of this I interpret Phillips' Case, with respect, to mean that where it is clear that the proceedings are by way of review of weekly payments, and not by way of original claim, the onus of proof on all issues is with the party alleging changed circumstances whether the existing payment is on the footing of total incapacity of partial incapacity; and that it was only because of the scheme of the Act, including the appellate provisions, and the course of the particular litigation that the Court held in Phillips' Case that the application for an award for partial incapacity was in effect a fresh application for an award of compensation and that consequently the onus of proving it lay upon the employee.

For these reasons I am of opinion that in an employer's application to review weekly payments the employer has the onus either of showing that the weekly payments should be ended or of putting the arbitrator in a position to determine by what amount they should be reduced.

The Learned Arbitrator Did Not Deal Fully With The Question Of The Workman's Capacity To Earn

The learned arbitrator, in a passage I have quoted above, said that for practical purposes the issue before him was whether the workman had "any and if so what incapacity for work since March of 1977". He did not, however, go beyond holding that the workman had not persuaded him that he was totally incapacitated. Prima facie the workman had some incapacity for work because he was a builder's labourer who had a partial physical incapacity. The learned arbitrator did not find that the worker had no economic incapacity. He contemplated that further evidence might have quantified a partial economic incapacity or might even have established a total economic incapacity. The scheme of the legislation is that in general an agreement has the same effect as an award - see Birch v. Pease and Partners Limited (1941) 1 K.B. 615. The authorities, which I have cited above, show that, in an application to review, weekly payments which have been agreed are treated as being on all fours with weekly payments under an award. Had the payments in this case been the subject of an award, that award would have provided that they "continue during the total or partial incapacity of the (workman) for work, or until the same shall be ended, diminished, increased or redeemed in accordance with the . . . Ordinance" - see Form 17 supra. When either an employer or a workman applies for a review of weekly payments, the application opens up the whole question of the workman's state of health and his capacity or incapacity to earn - see Bagley v. Furness and etc. (1914) 7 B.W.C.C. 560 per Cozens-Hardy M.R. at p.564, per Swinfen Eady L.J. at pp.564-565. In the present case the learned arbitrator ended the payments without considering the matter of partial incapacity. In my view he should either have considered the matter on the evidence before him or, if he took the view that further evidence was necessary, he should have so advised the parties. He should not, in my view, have made an award for the employer unless he found that the workman had totally recovered his earning capacity; and, as I understand the learned arbitrator's reasons, he made no such finding. I think, with respect, that the observation of the Master of the Rolls in Cory Bros. and Co. Ltd. v. Hughes (1911) 2 K.B. 738 at p.743 (which was specifically approved by the High Court in Muratore's Case) is in point, namely that "the burden is on the employers to satisfy the Court that the man at this moment is not under any incapacity by reason of the accident which admittedly befell him".

For these reasons I am of the view that the learned arbitrator did not properly or fully consider the question of the workman's capacity for work.

New Trial

The appeal from the learned arbitrator was heard in the Supreme Court of the Australian Capital Territory by Blackburn C.J. who, in his reasons for judgment, said:-
"For myself, I am not convinced that the mere fact that an employer commences to make payments to a workman, when he is not under an obligation to do so by reason of an award or agreement under the Ordinance, creates a legal obligation on the part of the employer to continue those payments until he is relieved of that obligation by an award under the Ordinance or by some other provision of the Ordinance."
Because His Honour took this view he considered that the workman had the onus of proof on all issues before the learned arbitrator. For the reasons I have given I think there was an agreement to pay compensation, albeit that it was not registered under the Ordinance, and also that the employer had the onus of proof, as I have described it. It follows that I consider that His Honour was in error in holding otherwise. For these reasons I would uphold the appeal. The question then arises as to whether the matter should be sent back to the learned arbitrator or whether the employer, if so advised, should be left to make an application to end or diminish the weekly payments. In the latter case the worker would arguably remain entitled to weekly payments from March 1977 until such time as they were ended or diminished by any application which the employer chose to make, a period already longer than three years. When the matter of the worker's incapacity has been fully investigated it may emerge that his capacity for work during this substantial period has been such that it would be unjust for the employer to be liable to pay him as for total incapacity. It might be said that the employer has brought such a result on himself by unilaterally ending the weekly payments. On the other hand a substantial amount of the three year period has been occupied by the appeal to the Supreme Court of the Australian Capital Territory and by this appeal.

Had Blackburn C.J. taken another view, it would not have been open to His Honour to remit the matter to the learned arbitrator - see s.26(2) of the Workmen's Compensation Ordinance 1951 as amended and ss.208(1)(h), 215, 218 and 219F of the Court of Petty Sessions Ordinance 1930 as amended.

Section 28(1) (c) of the Federal Court of Australia Act gives this Court power to remit a proceeding to the Court from which the appeal was brought for further hearing and determination, subject to such directions as the Court thinks fit. I do not think it would be satisfactory to remit the matter for further hearing and determination to the Supreme Court of the Australian Capital Territory. It is not a trial court for such matters and has no power to remit to the learned arbitrator. This provision gives no power to this Court to remit direct to the learned arbitrator. Such a power might be spelt out of s.28(1)(b) which enables this Court on appeal to make such order, as, in all the circumstances, it thinks fit; but quaere whether paragraph (b) should be read down in the light of paragraph (c). I do not find it necessary to decide this matter because of the presence of paragraph (f) which provides that this Court, in the exercise of its appellate jurisdiction, may "grant a new trial in any case in which there has been a trial, either with or without a jury, on any ground upon which it is appropriate to grant a new trial". I do not think that any narrow view should be taken of this provision by reading into it a proviso that the power exists only when the intermediate appeal court could also order a new trial by the trial court, which in the Australian Capital Territory is the Court of Petty Sessions, Canberra.

I turn, therefore, to consider whether this is an appropriate matter in which to grant a new trial. For the reasons I have given I consider that the learned arbitrator misdirected himself on the onus of proof and failed to consider properly or fully the question of the workman's incapacity. Section 27 of the Federal Court of Australia Act 1976 provides that in an appeal the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact.

I have reread the whole of the evidence which was given before the learned arbitrator. I have endeavoured to make full allowance for the fact that I have not had the advantage of seeing or hearing the workman and that he did not impress the learned arbitrator at all favourably. Even so I am unable to say whether or not the learned arbitrator would have come to the same conclusions if he had not misdirected himself as to the onus of proof and if he had fully considered the question of incapacity. For myself I would not have been satisfied that the employer had shown, on the balance of probabilities, that there was work available in Canberra at the time of the hearing for an illiterate builder's labourer, who spoke very little English, who had no other skill, who had a back and neck injury for each of which he was wearing a brace and who was also a potential candidate for spinal surgery. Moreover there were some unsatisfactory aspects about the evidence concerning the source of the payments which the worker had received; and I think there is a real question as to the extent to which it was possible to make a rational inference from such evidence that the workman had any capacity to earn. I note also that the learned arbitrator discouraged the workman's solicitor from investigating these matters fully - see Appeal Book pp.89-90 (original transcript pp.86-87) and Appeal Book pp.105-108 (original transcript pp.102-105).

I must also bear in mind that the learned arbitrator suggested that further evidence might be desirable. If that be so, then, in deciding matters under beneficial legislation which enjoins the Court to act "according to the substantial merits of the case" (paragraph 6A(c) of the Fourth Schedule), I think the parties should have been given the opportunity to get such evidence. All these considerations lead me to the conclusion that justice will be served best by an order for a new trial in which the matter will be settled by the Court of Petty Sessions by arbitration. It follows from what I have said that I consider that when the matter comes on anew it should be treated as an application by the employer under paragraph 12 of the First Schedule of the Workers Compensation Ordinance to end or vary weekly payments,in which the onus is on the employer to prove changed circumstances. It is impossible to indicate in advance how such an onus will be discharged in any given case. In some cases if the employer by medical or other evidence can show that a workman has a partial physical capacity for work there might be an evidentiary onus on the workman to lead evidence of his inability to obtain work, particularly if his inability is based on facts which are peculiarly within his knowledge.

For the foregoing reasons I would uphold the appeal, set aside the judgment below and the award of the learned arbitrator and order a new trial in the Court of Petty Sessions at Canberra in accordance with s.24 and the Fourth Schedule of the Workers Compensation Ordinance 1951. I would order the employer to pay the workman's costs of the hearing before the learned arbitrator, of the appeal to the Australian Capital Territory Supreme Court and of this appeal.

JUDGE3

On 22 September 1975 the appellant, whilst working for the respondent, was injured when he slipped and fell into a trench. Thereafter compensation was paid by the respondent to the appellant at the rate appropriate for total incapacity until a date in March 1977 when the respondent unilaterally terminated the payments. On 20 May 1977 the appellant applied for arbitration under the provisions of the Workmen's Compensation Ordinance 1951 of the Australian Capital Territory ("the Ordinance") for the determination of the following questions:

"(a) As to whether the said Applicant is a workman to whom the abovementioned Ordinance applies;

(b) As to the liability of the said Respondent to pay weekly compensation under the abovementioned Ordinance in respect of the injury.

(c) As to the liability of the said Respondent to pay medical, hospital expenses incurred by the Applicant since the 22nd day of September, 1975.

(d) As to the liability of the said Respondent to pay arrears of weekly payments to the Applicant."

Particulars given in the application included the following:
"5. Particulars of incapacity for work, whether total or partial and estimated duration of incapacity - total and permanent."

The learned magistrate who heard the application made an award for the respondent.

In his decision he said, inter alia:
"I am satisfied on the evidence that the applicant suffered an injury to his back at work on 22 September 1975 and that between March of 1977 and the date on which the - or put more precisely that between the date on which compensation ceased and now the applicant has had, in the physical sense, a partial incapacity for work. I am not persuaded on the evidence that he is totally incapacitated for work, let alone totally and permanently incapacitated for work."

He also said:
"So that the applicant has to persuade me, on the balance of probabilities, that he is unable to earn his pre-injury earnings. In order to succeed in a claim before me that applicant has to show that he is not able to earn the equivalent of his pre-injury earnings allowing for changes that may have occurred since the date of the injury and what people, in the category that he was, were earning."

He then pointed out that the case was not conducted on the basis of partial incapacity but rather on the basis of total incapacity and continued:
"But here having regard to the unsatisfactory evidence and to the unsatisfactory explanation for these large sums of money that the applicant has undoubtedly received I am not persuaded, on the balance of probabilities, that the applicant has, as a consequence of this accident, in fact an incapacity to earn money. I am not satisfied that he has suffered economic loss as a consequence of the injury in the period that is relevant for my present decision."

Pursuant to s.215 of the Court of Petty Sessions Ordinance 1972 the appellant appealed from this arbitration to the Supreme Court of the Australian Capital Territory and that Court dismissed the appeal and confirmed the award. This appeal is by the appellant from the judgment of the Supreme Court. Section 7(1) of the Ordinance provides:

"If personal injury by accident arising out of or in the course of his employment by his employer is caused to a workman, his employer shall, subject to this Ordinance, be liable to pay compensation in accordance with the First Schedule to this Ordinance."

Paragraphs 1 (b) and 1 (c) of the First Schedule, together with the provisions of s.12A of the Ordinance, provide the formula for calculating the payments to which a workman is entitled in respect of total incapacity and partial incapacity for work respectively. Section 12A of the Ordinance provides for the adjustment of certain figures in accordance with a specified Index number. Paragraph 12 of the First Schedule provides:
"A weekly payment ( . . . ) payable under this Ordinance may be varied or ended by agreement or by arbitration under this Ordinance."

The learned magistrate held that he was not satisfied that the appellant was totally incapacitated for work and the learned trial judge found:
"The medical evidence showed and in my opinion the preponderance of evidence was, that the appellant was, as a result of the injury, incapacitated for heavy labouring work, and that he was thereafter capable of other work not being heavy labouring work."

Both the magistrate and the learned trial judge were satisfied that it had not been shown that the appellant was totally incapacitated for work. The appellant argued before us that the appellant was totally incapacitated for work by the injury but I consider that this was not so. Paragraph 1(c) of the first schedule which deals with partial incapacity provides:
"1. The amount of compensation shall be -
(a) . . .
(b) . . .
(c) where the workman is partially incapacitated for work by the injury-a weekly payment during his incapacity-
(i) of the amount (if any) by which the weekly amount that he is earning, or is able to earn in some suitable employment or business, after the injury is less than his weekly pay at the date of the injury, or of the amount of Fifty-seven dollars, whichever is the less; or
(ii) of the amount (if any) by which the weekly amount that he is earning, or is able to earn in some suitable employment or business, after the injury is less than the weekly amount that would have been payable to him under sub-paragraph (b) of this paragraph, if he had been totally incapacitated,
whichever is the greater."

It will be seen that the amount, if any, to which an injured workman is entitled where he is partially incapacitated for work by injury depends upon ascertaining the amount he "is earning, or is able to earn in some suitable employment or business."

The principal argument advanced for the appellant before us was that the onus of establishing the amount the appellant was able to earn in some suitable employment or business did not fall upon the employee as had been found by the magistrate. The learned trial judge in his judgment said:
"In my opinion this case is one in which the appellant, as applicant in the proceedings below, failed to persuade the learned magistrate that he was totally incapacitated, and also failed to provide the learned magistrate with evidence that the amount that he was earning, or was able to earn in some suitable employment or business, after the injury, was less than his weekly pay at the date of the injury, or that that amount was less than the weekly amount that would have been payable to him if he had been totally incapacitated, or evidence from which the learned magistrate could made a decision on these matters.

I would therefore uphold the decision of the learned magistrate. But counsel for the appellant submitted that it was open to me to make other orders."

Before dealing with this argument in detail it is relevant to point to the findings of the magistrate that the applicant was shown to be a person who would tell lies in order to achieve his own ends, and that he had received substantial sums of money and that the account of the circumstances in which these monies were received, in so far as they had been disclosed in the evidence, was not convincing. The magistrate then said:
"I am not satisfied that he has suffered economic loss as a consequence of the injury in the period that is relevant for my present decision."

On the question of onus the respondent argued that the words "payable under this Ordinance" in paragraph 12 of the First Schedule were only applicable where weekly payments were made pursuant either to an arbitration in accordance with the provisions of the Fourth Schedule or to an agreement which had been registered pursuant to paragraph 9 of the Fourth Schedule. Paragraph 12 of the First Schedule does not refer to the variation of a weekly payment payable as a result of agreement or arbitration under this Ordinance but only to a weekly payment payable under this Ordinance. It then says that such a weekly payment may be varied or ended by agreement or by arbitration under this Ordinance. The word "agreement" is not defined in the Ordinance or in the Workmen's Compensation Rules and it is used in a number of places both in the Ordinance and in the Schedules and in the Rules.

I can see no reason why the agreement cannot be an oral agreement. Certainly one might expect an oral agreement ultimately to be recorded in a memorandum which was registered as provided in paragraph 9 of the Fourth Schedule. The evidence was entirely silent about the way in which payments had been made and accepted in respect of the period from 27 September 1975 to March 1977 and, in particular, there was no evidence of any letters accompanying the payments or of any documentation with respect to the payments. It was said in the application for arbitration by the appellant that "the respondent admitted liability and made compensation payments for some time thereafter." It seems that no answer was filed by the respondent but when the matter was first before the magistrate counsel for the respondent indicated that he was not taking any technical defences and said "I would expect that the appellant would be able to prove that he has received payments. So there is no point taken." The only possible inference is that the respondent regularly paid compensation based on total incapacity for work from the date of the accident for a period of about 18 months. In my opinion these payments were not suggested to be by way of gift or for any other purpose than to satisfy a liability under s.7(1) of the Ordinance and must be regarded as payments "payable under this Ordinance" within the meaning of par.12 of the First Schedule. This view is compatible with that expressed by the majority of the Full Court of this Court when it was considering a section of the Workmen's Compensation Ordinance (N.T.) in The Western Australian Coastal Shipping Commission v. Wallner (1979) 26 A.L.R. 591.

In Phillips v. The Commonwealth of Australia (1964) 110 C.L.R. 347 Kitto, Taylor and Owen JJ., in a joint judgment, were considering the position under the Commonwealth Employees Compensation Act 1930. In that case it appears that determinations had been made that Miss Phillips was entitled to payments for total incapacity and at a later date a further determination was made by a delegate that she was able to earn an amount which was not less than her pay at the date of the injury as since varied. From that determination she appealed to the County Court where the appeal was dismissed and she then appealed further to the High Court which also dismissed her appeal. As appears from the joint judgment at p.351 it was found as a fact in the County Court that she was no longer totally incapacitated and the judgment continues:
"This finding is not challenged in this Court and indeed it could not be challenged, for it was founded upon a certificate of a medical board which s.19(4) makes conclusive evidence of the matters certified. Accordingly, it is clear that the applicant has no further right to compensation under par.1(b)."

Paragraph 1(b) provided the measure of compensation in the case of total incapacity and par.(c) the measure in relation to partial incapacity. The Court held that although the onus lay upon the Commonwealth to establish that it no longer had liability to pay compensation to Miss Phillips as a totally incapacitated person since that onus had already been discharged by the finding of the County Court which cannot be challenged, the question whether compensation should be awarded to Miss Phillips as a person partially incapacitated and with a diminished earning capacity then arose. The Court said that this, in effect, constituted the basis of a new claim not previously pronounced upon before its rejection by the Commissioner and on this issue the onus was on Miss Phillips.

Senior counsel for the appellant before us sought to distinguish the lastmentioned case upon the basis that any issue in relation to total incapacity was determined conclusively by the certificate of the medical board whereas in the case before us there was nothing corresponding to that certificate and on the contrary par.12 of Schedule 1 of the Ordinance required an agreement or arbitration before a weekly payment under the Ordinance could be varied or ended. In my opinion this argument should be rejected because I consider that there was adequate proof that at the relevant date the appellant was no longer totally incapacitated.

In Commonwealth of Australia v. Muratore (1978) 22 A.L.R. 176 the High Court considered a somewhat similar question. The main judgment was delivered by Jacobs J. with whom Gibbs, Stephen and Aickin JJ. agreed.

This case involved an appeal by special leave and the High Court had to decide who bore the onus in proceedings brought by way of judicial review from the determination of a Commissioner. It was conceded that the appeal by way of judicial review was a hearing de novo. The facts of this case differed from the facts in Phillips v. The Commonwealth of Australia, supra, in that there had been a determination in 1966 that Muratore was partially incapacitated and the decision from which the relevant appeal was brought was that of a commissioner who determined that Muratore was able to earn in some suitable employment or business an amount not less than his average weekly earnings before the injury. (p.178 11.22-30). It was held by Jacobs J. the the onus was on the Commonwealth, which was alleging a change in circumstances, to prove that change of circumstances. (p.180 11.35-38).

Jacobs J. next stated:
"The position is quite different if there has been no previous finding of partial incapacity with a consequent assessment of the compensation payable."
Reference was then made to J. & H. Timbers Pty. Ltd. v. Nelson (1972) 126 C.L.R. 625. His Honour at p.179 11.27-30 said:
"It has always been recognised that 'incapacity for work', those words being taken to refer to physical incapacity, is only relevant where it produces an economic incapacity."
and at p.180 11.12-15 his Honour referred to judgments in Thompson v. Armstrong and Royse Pty. Ltd. (1950) 81 C.L.R. 585 and said that they do not justify a conclusion that economic loss can be regarded as an element wholly separate from incapacity for work. Murphy J. at p.182 11.8-11 expressed the view that Phillips v. The Commonwealth of Australia incorrectly differentiated between total incapacity and partial incapacity. Jacobs J. on the other hand at p.180 1.45 to p.181 1.14 cited Phillips v. The Commonwealth of Australia without expressing any disapproval. In my opinion Phillips v. The Commonwealth of Australia and The Commonwealth of Australia v. Muratore are compatible because a distinction is made between total incapacity and partial incapacity. In the subject case, in my opinion, the employer has satisfied the onus of establishing that the appellant is no longer totally incapacitated. The onus of showing the extent of incapacity then lies with the appellant. This conclusion is also consistent with the judgment of the majority of the High Court in J. & H. Timbers Pty. Ltd. v. Nelson, supra.

Both the learned magistrate and the learned trial judge proceeded upon the basis that in the circumstances the appellant bore the onus of establishing that he was totally incapacitated and to this extent I consider that they were in error. Nevertheless, it is clear that both the learned trial judge and learned magistrate proceeded upon the basis that they considered that the appellant was not totally incapacitated for work during the relevant period. Looking at the evidence, as I think we ought, I consider that it is sufficient to establish that during the relevant period the appellant was not totally incapacitated for work. This conclusion is assisted by the assessment by the learned magistrate of the reliability of the appellant as a witness.

Another ground of appeal was against the refusal of the learned trial judge to permit the appellant to call further evidence under the provisions of s.215(3) of the Court of Petty Sessions Ordinance 1930. This section provides that the appeal shall be heard on the evidence before the Court of Petty Sessions together with any evidence admitted pursuant to leave granted by the judge upon the ground that the evidence is evidence in relation to matters which have occurred after the hearing of the proceedings in the Court of Petty Sessions or for any other special reason. The evidence which it was sought to have called was that of a doctor who had given evidence in the proceedings and it was sought to introduce evidence of the results of a myelogram performed after the hearing and which was said to be confirmatory of that doctor's evidence. The learned trial judge refused the application and in my opinion that was a proper exercise of his power. I consider that no adequate special reason has been shown for the admission of the evidence nor do I think in any real sense is it evidence in relation to a matter which had occurred since the first hearing. It is simply evidence said to be confirmatory of the opinion expressed by the doctor.

Before us, senior counsel for the appellant, did not seek a fresh trial but sought firstly that we should determine that the onus rested on the employer to establish that there was no incapacity for work at all and that this court should order payment on the basis of total incapacity. The second submission was that this court ought itself to attempt to assess the measure of partial incapacity. The third submission was that the court should remit the matter back to the learned trial judge with a direction that it was appropriate to admit fresh evidence of the doctor (Dr. Newcombe) and, any further evidence if the trial judge thought fit, with a direction that in assessing the compensation to be paid to the appellant the onus rested on the employer in all respects.

No suggestion was made to us that we should consider whether we had power to, and if so, whether we should, remit the matter back to the magistrate. Before the learned trial judge it was common ground that he had no power to so remit the matter. What I have already said shows that I would not make an order based on total incapacity.

Before this Court could make any order based on partial incapacity there must be sufficient material before it for it to be able to assess in money the entitlement, if any, which the appellant had to compensation for partial incapacity during the relevant period and the onus lay upon the appellant in this regard. In my opinion the material before the Court is not sufficient for this purpose. The learned magistrate clearly indicated that he did not believe the appellant. No assessment of money payable for partial incapacity can be made without an assessment of the amount which the appellant was "earning or is able to earn in some suitable employment or business". Although a Tribunal which handles regularly large numbers of workmen's compensation cases may draw upon certain of its judicial knowledge (e.g. J. & H. Timbers Pty. Ltd. v. Nelson, supra, Gibbs J. at p.651), it is different when a Court such as this is considering this matter or indeed when the learned trial judge was considering the matter. It is appropriate to note that the learned magistrate held that he was not satisfied that the appellant had suffered any economic loss in the relevant period. I would reject the appellant's second submission.

I see no reason to accede to the third submission. In any event I would direct that the onus, in relation to partial incapacity, rests on the appellant. The appellant has already failed to satisfy the learned trial judge on the issue of partial incapacity.

I am of the opinion that it is appropriate for this Court to dismiss the appeal. I would mark my disapproval of the respondent's conduct in terminating the payments which it had made other than in accordance with paragraph 12 of the First Schedule, by making no order as to the costs of the appeal to this Court.