Comcare Australia v Murphy, Kathleen Dorothy
[1996] FCA 83
•13 FEBRUARY 1996
IN THE FEDERAL COURT OF AUSTRALIA )
)
NORTHERN TERRITORY DISTRICT REGISTRY)
)
GENERAL DIVISION ) No. DG15 of 1995
B E T W E E N:
COMCARE AUSTRALIA
Applicant
- and -
KATHLEEN DOROTHY MURPHY
Respondent
REASONS FOR JUDGMENT
CORAM: O'Loughlin J.
PLACE: Adelaide (Heard in Darwin)
DATE : 13 February 1996
On 26 May 1992, the applicant, Comcare Australia ("Comcare") made a determination which, so far as it is relevant to these proceedings, provided that:
"... the effects of the aggravation of endogenous eczema suffered by the said Kathleen Murphy has ceased and she is therefore no longer entitled to compensation."
That determination was reviewed by Comcare on 17 August 1992, but the reviewing officer affirmed the earlier determination saying:
"I am not satisfied that Mrs Murphy's present condition is contributed to by her former employment. I find that Mrs Murphy's condition of endogenous eczema is no longer aggravated by her former employment and is the natural progression of an underlying condition."
Mrs Murphy, who is now the respondent to this appeal, applied to the Administrative Appeals Tribunal ("the Tribunal") for a
review of the decision of 17 August 1992. Her application was partially successful in that the Tribunal, on 28 April 1995, varied Comcare's determination by adding a determination that Mrs Murphy was entitled to a payment of compensation under s39 of the Compensation (Commonwealth Government Employees) Act 1971 (Cth) ("the 1971 Act") for "the partial loss of the efficient use of a part or parts of her body". Comcare has now appealed against that determination.
Before turning to the grounds of appeal, it is necessary to set out the relevant background with respect to Mrs Murphy's work and medical history. On 11 September 1985 she lodged a claim for compensation for dermatitis of her hands and arms. For the purposes of this appeal, nothing turns on the interchange of the words "dermatitis" and "eczema". At that time Mrs Murphy, who was born in 1931 and was then aged 54, was employed by the Northern Territory Department of Education ("the Department"); her duties were primarily clerical. On 8 May 1986, a delegate of the Commissioner for Employees' Compensation ("the Commissioner"), the predecessor in title to Comcare, determined that the Department was liable to pay her compensation in respect of the aggravation of her eczema. In fact, the determination referred, not only to her hands, but also to her feet. There has been some inconsistencies in the history of this matter with respect to the extent of Mrs Murphy's suffering but it is not necessary, for a determination of this appeal, to investigate that matter. It can be accepted that Mrs Murphy suffers from dermatitis and the core issue is the extent to which, if at all, it is work related thereby entitling her to a lump sum compensatory payment. The determination of 8 May 1986 was made under the 1971 Act. Mrs Murphy was retired from the Department on the grounds of invalidity on 22 October 1986.
On 17 February 1988, a delegate of the Commissioner made a determination that the Department was no longer liable to pay compensation to Mrs Murphy; she applied to the Tribunal for a review of that determination and her application was ultimately successful. On 17 June 1988, the Tribunal ordered that ongoing payments of compensation be made to Mrs Murphy at half of the rate payable prior to that date.
On 16 January 1989, a delegate made yet another determination adverse to Mrs Murphy. Mrs Murphy, once again, challenged the determination and on this occasion the parties reached an agreement. On 24 October 1989, by which time the 1977 Act had been repealed and replaced by the Safety Rehabilitation and Compensation Act 1988 (Cth) ("the 1988 Act"), the parties consented to the Tribunal entering an order with respect to Mrs Murphy's capacity for employment and entitlement to compensation. A copy of that order was not available to the Tribunal but the parties and the Tribunal were prepared to accept and proceed upon a note or memoranda compiled by Mrs Murphy's solicitors. So far as relevant, the Tribunal's orders of 24 October 1989 were to the following effect:
-"That from 17.2.88 until 24.10.89 (Mrs Murphy) was totally incapacitated for employment."
-"That on and from 24.10.89 (Mrs Murphy) is permanently partially incapacitated for employment and is declared able to earn income."
-"That the present rate of weekly compensation payable to Mrs Murphy is $53.85."
Those orders apparently related only to an application for weekly payments of compensation. It has not been suggested that they related to an application for any lump sum compensation and there was no evidence that any such application had then been made.
A week later, on 31 October 1989, Mrs Murphy applied to redeem her weekly payments. As a consequence of that application, a determination was made by Comcare on 14 November 1989 that she was entitled to redeem her entitlement to weekly payments of compensation for incapacity pursuant to s137 of the 1988 Act. A payment of $64,373.92 was made to her.
Two years or so later, on 16 September 1991, Mrs Murphy applied for a lump sum payment pursuant to s24 of the 1988 Act. She claimed that, by virtue of s124 of that Act, her entitlement to a lump sum was to be found in s39 of the 1971 Act. She made her claim in respect of her loss of function in her hands and feet for normal work. Ultimately, as previously indicated, her application was rejected on 26 May 1992 and again on 17 August 1992 after a review of the May decision on the ground that her condition of endogenous eczema was no longer aggravated by her former employment.
When the matter came on for hearing before the Tribunal, it identified three issues that it had to consider. Only the second of those is now before the court. It is however, in my opinion, of material importance to note the first of the issues that was resolved by the Tribunal; the first question was whether Mrs Murphy's earlier employment with the Department continued to be a contributing factor to the aggravation of her skin condition or whether it had ceased. As to this, the Tribunal's finding, which has not been challenged was:
"... I find that Mrs Murphy's employment with the Department in 1985 is not contributing to her continuing constitutional or endogenous eczema and that it has not been since 26 May, 1992 when Comcare made its initial determination."
The second issue before the Tribunal and the only issue now before the court was whether Mrs Murphy was entitled to a lump sum payment by way of compensation under s39 of the 1971 Act.
Mrs Murphy's chequered compensation history can therefore be summarised as follows: from 1986 to early 1988 she was on full compensation; as a result of challenges to her medical
condition, the parties ultimately agreed to the Tribunal entering orders by consent that affirmed her totally incapacitated up to 24 October 1989 and her permanent partial incapacity from that date. As a result of a further challenge to her medical condition, commencing with Comcare's determinations of 26 May and 17 August 1992, the Tribunal has ruled that her employment with the Department in 1985 has not, since 26 May 1992, contributed to her eczema.
The crux of the appeal, may be shortly stated. Did the Tribunal correctly decide Mrs Murphy's application for a lump sum payment only on the evidence and other material that was available at the time when Mrs Murphy lodged her claim on 16 September 1991? In other words, was the Tribunal correct in not taking into account the information that was available to it at the time of the hearing, including its own finding, based on the medical evidence that had been presented before the Tribunal, that Mrs Murphy's employment with the Department in 1985 had not contributed to her eczema since 26 May 1992?
Although the 1988 Act has been in force since 1 December 1988, the parties were agreed, both before the Tribunal and on this appeal, on the effect of the transitional provisions of that Act. It was agreed that if Mrs Murphy was entitled to a lump sum payment of compensation, it would be because she fell within the umbrella of the 1971 Act and, in particular, the provisions of s39 of that Act. That being the case it is not
necessary to give consideration to the transitional provisions of the 1988 Act.
Section 39 of the 1971 Act provided that where an injury to an employee resulted in a loss of a type specified in the section, a compensatory lump sum that was to be calculated in accordance with the provisions of the section was payable to the employee. The "loss" had to be a "permanent loss": subs39(15) and "permanent" meant "likely to continue indefinitely": subs5(1). Subsection 39(11) of the 1971 Act, so far as relevant to these proceedings provided as follows:
"The compensation payable under this Act in respect of an injury resulting in partial loss by an employee of the efficient use of a part of the body... is such percentage of the amount of compensation that would be payable under sub-section (3) in respect of an injury resulting in the loss by the employee of that part of the body as is..." (determined in accordance with the further provisions of the subsection).
The litigation, both in this court and before the Tribunal, has proceeded upon the premise that Mrs Murphy's condition has resulted in a partial loss of the efficient use of a part of her body such that if it is regarded as a permanent loss due to her former employment, it would be compensable under s.39.
The Tribunal, in 1995, commenced its consideration of Mrs Murphy's entitlement to a lump sum payment by accepting that the Tribunal had previously made a determination of permanent
partial incapacity in her favour when it entered the consent order of 24 October 1989: (par119). It went on to say:
"123. The Tribunal had decided on 24 October, 1989 that Mrs Murphy's incapacity was permanent as from that date (24 October, 1989) and that decision was still operative on 16 September, 1991 when she made her claim under section 24. Therefore, on the date of her claim, she had a compensable injury that resulted in a permanent impairment."
The Tribunal was of the opinion that the time at which it must consider the relevant facts was 16 September 1991, the date when she made her claim; it said:
"Given that the 1971 Act does contemplate that the effects of an injury will change and that it contemplates that determinations must be made even when the future cannot be predicted with certainty but only with likelihood and makes provision for the changed effects of an injury, I consider that I should consider the claim under section 39 at the date it was made."
The reference to the effects of an injury changing was a reference to subs39(14) and s50 of the 1971 Act. Subsection 39(14) provided that the section did not refer to total incapacity or the likelihood of total incapacity (as s45 was the provision covering that eventuality). But s50 stated that if, in a case of total incapacity, there had been an earlier lump sum payment under s39, the amount of that payment had to be taken into account in calculating the benefits that were payable as a consequence of total incapacity.
The Tribunal said in its reasons that the earlier determination of the Tribunal of 24 October 1989 (with its reference to permanent partial incapacity) had not been challenged by Comcare. That statement was vigorously contested by counsel before this court. Mr Waters, counsel for Mrs Murphy, by consent, handed up extracts from the transcript of the proceedings before the Tribunal and drew attention to statements made by counsel who then appeared on behalf of Comcare. Those statements were ambiguous but, having reflected on the matter, I have concluded that it was incorrect for the Tribunal to state that the determination of 24 October 1989 had not been challenged by Comcare. That determination had created specific entitlements in favour of Mrs Murphy, including an entitlement to weekly compensation at the rate of $53.85 per week because of her partial incapacity; in turn, that had given her the right to redeem those weekly payments and receive a payment on redemption of $64,373.92.
I interpret the remarks of counsel before the Tribunal as meaning that Comcare was not challenging Mrs Murphy's right to those weekly payments and to that lump sum payment. But the statement by counsel before the Tribunal that Comcare did not concede that there was any contribution from her work environment towards her present condition could only have meant that Comcare was challenging her entitlement to make a claim under s39 for a lump sum payment. This interpretation is more easily accepted when it is emphasised that the application of 16 September 1991 was the first occasion upon which Comcare was faced with the risk of having to make a lump
sum payment under s39. Comcare was entitled, if it saw fit, to challenge such a claim and it clearly did so. That part of the determination of 24 October 1989 as related to her permanent partial incapacity being work related was clearly challenged. The manifestation of that challenge was Comcare's determination of 24 May 1992 and its further determination on review of 17 August 1992. On those two occasions it asserted that, although Mrs Murphy was still suffering from eczema, her condition was no longer aggravated by her former employment. In Comcare's opinion, any perception in 1989 of permanent incapacity due to her former employment had been dispelled by the medical evidence that Comcare had subsequently assembled consequential upon its receipt of her claim.
In any event, the consent order of the Tribunal of 24 October 1989 and its reference to permanent partial incapacity for employment could not be regarded in any sense as determinative of Mrs Murphy's application. The order of 24 October was made only as a consequence of and in respect of an application for compensation of weekly payments; the issue of "permanency" in relation to her former employment was not one that was then before the Tribunal for consideration - nor was the issue of an application for a compensatory lump sum payment under s39. One can not say what Comcare would have done in 1989 if Mrs Murphy had then made an application under s39 but one is entitled to allow for the possibility that it might have done that which it did in 1991 when such a claim
was made - it might have obtained medical evidence that her eczema was no longer aggravated by her former employment.
There is authority stating that a determination by a determining authority, such as the Tribunal, does not create an estoppel - that an earlier decision is not binding on a subsequent decision maker: see s62 of the 1988 Act dealing with the reconsideration of a determination: see also Hanna v Australian Postal Corporation (1990) 12 AAR 511. In that case Davies J had to consider the effect of a consent order in the Administrative Appeals Tribunal and its effect (if any) on the power of the respondent Corporation to make a subsequent contrary decision. On 4 August 1988 the parties consented to an order that made the respondent liable to pay ongoing compensation under the 1971 Act. Fifteen months later on 1 November 1989 the respondent determined under the 1988 Act that it was no longer liable. The applicant unsuccessfully challenged this determination; the court held that the respondent had power pursuant to subs62(1) of the 1988 Act to reconsider the applicant's entitlement to compensation.
The decision makers in May and August 1992 who dealt with Mrs Murphy's claim were not bound by the decision of the Tribunal of 24 October 1989 - nor was the Tribunal in 1995 when it reviewed those decisions. The decision in Hanna v Australian Postal Corporation was referred to by Lockhart J (with whose reasons Black CJ and Gummow J agreed) in Plumb v Comcare (1992) 39 FCR 236 at 241 his Honour said:
"This case is concerned with the 1971 Act and the 1988 Act. Those enactments define the powers of the determining authority, the decisions of which may be reviewed by the AAT. The determining authority's powers include the power of reconsideration conferred by s62 of the 1988 Act upon the relevant determining authority, which in this case is the respondent, Comcare. Thus the combined operation of those provisions and s43(6) of the AAT Act demonstrates that the decision of a determining authority may be reconsidered by it: see Hanna v Australian Postal Corporation (1990) 12 AAR 511."
Fisher and Lockhart JJ held in Minister for Immigration and Ethnic Affairs v Daniele (1981) 39 ALR 649 at 654 that:
"Issue estoppel, generally but not universally seen as a rule of evidence, can not have any place in proceedings of the Tribunal and is, to the extent that it is a rule of evidence, expressly excluded by the provisions of s33 of the Administrative Appeals Tribunal Act. Sub-section 33(1)(b) directing that proceedings should be conducted as far as possible with little formality and technicality and sub-s33(1)(c) to the effect that the Tribunal is not bound by the rules of evidence would appear conclusively to point to exclusion of the doctrine. It is our opinion that the Tribunal is entitled to consider all evidence."
See also Blackman v Commissioner of Taxation (1993) 43 FCR 449 and in particular the remarks of Gray J at pp456-457 rejecting any suggestion of issue estoppel.
In Commonwealth of Australia v Sciacca (1988) 17 FCR 476 at 480 the Full Court there said that:
"A finding by an administrative tribunal will not give rise to an issue estoppel."
The court went on to note that in W J & F Barnes Pty Ltd v Federal Commissioner of Taxation (1957) 96 CLR 294 at 315 Kitto J said that a taxation board of review's decision was not an adjudication; it was administrative in character and could not create an issue estoppel. The application of those authorities to the facts of this case means that there was no issue estoppel impeding the Tribunal from making its assessment afresh. It means that the Tribunal erred in law when it decided that the October 1989 determination was not challenged and that it could not go behind that determination.
There have been some minor reservations about the subject. The Full Court in Sciaccas' case (supra) went on to add at 480:
"The question is not a straightforward one and it was not fully argued before us. Because of our view that the judgment of Gallop J did not give rise to any relevant issue estoppel, it is unnecessary to decide the point and, accordingly, we express no view upon it."
And in Plumb v Comcare (supra) at 241, Lockhart J concluded:
"There is no necessity in this case to consider the interesting questions of issue estoppel and cause of action estoppel which were touched on, though briefly, in argument."
However, in my opinion, until a Full Court intervenes to the contrary, I am bound by the decisions to which I have referred. Subject to what I am about to say, there was no estoppel at law preventing the Tribunal from going behind its earlier decision.
In any event, I am of the opinion that no issue estoppel could arise, as a matter of fact, in this case. I have come to that conclusion because the issue for determination that was under review materially differed from the issue that was the subject of the consent order of 24 October 1989. That order, despite its language - "permanently partially incapacitated" - was concerned with Mrs Murphy's total incapacity for employment from 17 February 1988 until 24 October 1989 and with her partial incapacity for employment thereafter. The issue of "permanency" in relation to her former employment was, at that stage, surplusage. "Permanency" and its relationship to her former employment only had to be considered for the first time in 1991 when she made her application for a lump sum payment. At that stage the decision makers and the Tribunal were required to consider Mrs Murphy's entitlements afresh based on the evidence and other material then properly before them. In my opinion, the remarks of Wilcox J in Commonwealth of Australia v Ford (1986) 65 ALR 323 at 328 accurately summarises the Tribunal's duties and responsibilities:
"In the present case the Commissioner made a determination under the Act: that of 16 May 1984. Ms Ford, a competent party, requested review of that determination. The jurisdiction of the tribunal was thus invoked. In the exercise of that jurisdiction the tribunal had 'all the powers and discretions that are conferred by any relevant enactment on the person who made the decision' and, in particular, had power to set aside the decision under review and to make a decision in substitution for that decision: see s43 of the Administrative Appeals Tribunal Act 1975. Those provisions mean that the tribunal had power to reconsider the determination of 16 May 1984 and to make a decision varying that determination; as, for example, by awarding benefits under the Act to which the claimant was entitled but which were not referred to in the Commissioner's determination. And, of course, the tribunal was bound to consider the facts as they were proved in evidence before the tribunal, making the decision which upon that material and at that time was the correct or preferable administrative decision. The tribunal was not confined either to the material which was before the Commissioner, as primary decision-maker, or the events which had occurred up till that time: see Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589; Nevistic v Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639 at 640-1. If upon consideration of the evidence before the tribunal, it appeared that Ms Ford was entitled to benefits over a longer period - including a period after the date of the Commissioner's determination - than that covered by the determination under review, it was the duty of the tribunal to so find and to award compensation accordingly. If, upon that evidence, it appeared that Ms Ford was entitled to benefits different in kind to those referred to in the determination under review, it was obliged to so find and to award accordingly."
Those remarks cannot be read in a vacuum; they cannot be applied only to those cases where their application would have constituted a beneficial result for the worker: they must apply universally across the board. In this case the medical evidence before the Tribunal led it to a conclusion that although there was, at the time of the making of the claim and at the time of the making of its decision, the requisite degree of permanency, there was no longer the requisite connection with her employment. Whatever may have been the position on 24 October 1989 there had been a material change. Perhaps Mrs Murphy might have received a lump sum payment if she had made such a claim in 1989; that is a speculative issue because one does not know what medical evidence about permanency and its relationship to her former employment might have been forthcoming. That, alone, points to the illogicality of not having regard to the current and topical material when the Tribunal made its decision in 1995. In my opinion, the Tribunal erred in law when it said:
"At the time the claim was made for a lump sum on 16 September, 1991, there was a decision of the Tribunal and subsequent determinations by Comcare that she was permanently partially incapacitated as a result of her injury. That decision is not subject to review in these proceedings and I cannot look behind it...
As I have decided that the claim should have been considered at the date it was made, it follows that, in the particular circumstances of this case, Mrs Murphy is entitled to a lump sum under section 39 even though she is not, after 26 May, 1992, entitled to compensation at all..."
The decision of the Tribunal was in the following terms:
"The Tribunal:
varies the determination of the respondent dated 17 August, 1992 by adding a determination that the applicant is entitled to a payment of compensation under section 39 of the Compensation (Commonwealth Government Employees) Act 1971 for the partial loss of the efficient use of a part or parts of her body;
otherwise affirms the determination of the respondent dated 17 August, 1992; and
adjourns further consideration of the assessment of the applicant's entitlement under section 39."
In the peculiar circumstances of this case, there seems no point in remitting the matter to the Tribunal for further hearing and determination in accordance with these reasons. If I were to do that, the outcome is obvious; the Tribunal acknowledged at par129 of its reasons that if the correct test was to assess Mrs Murphy's claim based on all the evidence and other material properly before the Tribunal she must fail for she "does not now suffer from any loss due to the aggravation of her condition by her employment." I therefore order that the appeal be allowed and that the decision of the Administrative Appeals Tribunal be set aside and the determination of Comcare dated 17 August 1992 be affirmed.
In its Notice of Appeal, Comcare did not seek an order for costs but it did seek "such further orders as the court sees fit". I will therefore adjourn these proceedings with liberty to any party to apply on seven days notice with respect to any consequential matter.
I certify that this and the preceding pages are a true copy of the Reasons for Judgment of Justice O'Loughlin.
Associate
Dated:
Counsel for the Applicant : Mr T J Riley QC
Solicitors for the Applicant : Australian Government
Solicitor
Counsel for the Respondent : Mr John Waters
Solicitors for the Respondent : Messrs Cridlands
Date of Hearing : 29 September 1995
CATCHWORDS
ADMINISTRATIVE LAW - workers' compensation - earlier decision of Tribunal - whether that decision raises a question of estoppel - whether Tribunal correctly decided application for a lump sum payment only on the evidence available at time of lodgment of claim - whether Tribunal should have taken into account information that was available to it at the time of the hearing.
Compensation (Commonwealth Government Employees) Act 1971 (Cth)
Safety Rehabilitation and Compensation Act 1988 (Cth)
Hanna v Australian Postal Corporation (1990) 12 AAR 511
Plumb v Comcare (1992) 39 FCR 236
Minister for Immigration and Ethnic Affairs v Daniele (1981) 39 ALR 649
Blackman v Commissioner of Taxation (1993) 43 FCR 449 Commonwealth of Australia v Sciacca (1988) 17 FCR 476
W J & F Barnes Pty Ltd v Federal Commissioner of Taxation (1957) 96 CLR 294
Commonwealth of Australia v Ford (1986) 65 ALR 323
No. DG15 of 1995
COMCARE AUSTRALIA Applicant
- and -
KATHLEEN DOROTHY MURPHY Respondent
O'LOUGHLIN J.
ADELAIDE (Heard in Darwin)
13 FEBRUARY 1996
IN THE FEDERAL COURT OF AUSTRALIA )
)
NORTHERN TERRITORY DISTRICT REGISTRY)
)
GENERAL DIVISION ) No. DG15 of 1995
B E T W E E N:
COMCARE AUSTRALIA
Applicant
- and -
KATHLEEN DOROTHY MURPHY
Respondent
MINUTES OF ORDER
JUDGE MAKING ORDER : O'LOUGHLIN J.
WHERE MADE : ADELAIDE (Heard in Darwin)
DATE OF ORDER : 13 FEBRUARY 1996
The Court Orders that:
The appeal be allowed
The Decision of the Tribunal be set aside.
The determination of Comcare dated 17 August 1992 be affirmed.
The proceedings be adjourned with liberty to any party to apply on seven days notice with respect to any consequential matter.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
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