Comcare v Davies

Case [2008] FCA 393

FEDERAL COURT OF AUSTRALIA

Comcare v Davies [2008] FCA 393

COMPENSATION – no question of law arises where Tribunal does not resolve a contention not advanced before it – suitable employment – the significance of a Statement of Facts and Contentions – a contention not raised for resolution – equating of “net loss” with “ability to earn” – inadequacy of Tribunal’s reasons – an absence of findings or reasons

Administrative Appeals Tribunal Act 1975 (Cth), ss 2A, 33(1AA), 39(1), 43(2B)

Safety, Rehabilitation and Compensation Act 1988 (Cth), s 19(2)

Cage Developments Pty Ltd v Schubert (1983) 151 CLR 584 followed

Chen v Minister for Immigration & Multicultural Affairs [2000] FCA 1901, 106 FCR 157 followed

Comcare Australia v Woodbridge (Unreported, Federal Court of Australia, O’Loughlin J, 13 February 1996) considered

Comcare v Holt [2007] FCA 405, 94 ALD 576 considered

Comcare v Line [2002] FCA 553 followed

Dodds v Comcare Australia (1993) 31 ALD 690 followed

Drake v Minister for Immigration & Ethnic Affairs (1979) 46 FLR 409 followed

Federal Commissioner of Taxation v Raptis (1989) 19 ALD 726 followed

Ferriday v Repatriation Commission (1996) 69 FCR 521 cited

J & H Timbers Pty Ltd v Nelson (1972) 126 CLR 625 followed

Kuswardana v Minister for Immigration & Ethnic Affairs (1981) 54 FLR 334 followed

McAuliffe v Department of Social Security (1991) 13 AAR 462 followed

Minister for Immigration & Ethnic Affairs v Liang [1996] HCA 6, 185 CLR 259 followed

Re Davies and Comcare [2007] AATA 1829 cited

Roncevich v Repatriation Commission [2005] HCA 40, 222 CLR 115 followed

SZEHN v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 1389 followed

SZHPI v Minister for Immigration & Citizenship [2008] FCA 306 followed

Zhang v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 30 followed

COMCARE v KERRY JOY DAVIES
ACD 49 OF 2007

FLICK J
27 MARCH 2008
CANBERRA

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY

ACD 49 OF 2007

ON APPEAL FROM THE GENERAL ADMINISTRATIVE DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY SENIOR MEMBER JW CONSTANCE, AND MEMBER DR MD MILLER

BETWEEN:

COMCARE
Applicant

AND:

KERRY JOY DAVIES
Respondent

JUDGE:

FLICK J

DATE:

27 MARCH 2008

PLACE:

CANBERRA

THE ORDERS OF THE COURT ARE:

1.The appeal be allowed.

2.The decision of the Administrative Appeals Tribunal given on 3 October 2007 be set aside.

3.The matter be remitted to the Tribunal for further consideration in accordance with law.

4.The Respondent pay 75% of the costs of the Applicant.

5.Liberty is reserved to the parties to apply within 7 days should either wish to seek a variation of one or other of these orders.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY

ACD 49 OF 2007

ON APPEAL FROM THE GENERAL ADMINISTRATIVE DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY SENIOR MEMBER JW…

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AGLC
Comcare v Davies [2008] FCA 393
Case
[2008] FCA 393
Decision Date

CaseChat Overview and Summary

The case of Comcare v Davies involves a dispute regarding the calculation of Ms Davies' ability to earn (AE) in suitable employment, as defined under section 19(2) of the relevant legislation. The Tribunal had determined that Ms Davies' ability to earn in her own business, Bali Gardens, was nil due to operating losses during the period in question. Comcare challenges this decision, arguing that the Tribunal failed to consider whether there were other forms of suitable employment that Ms Davies could pursue and whether the losses incurred in her business should be equated with her ability to earn. The central legal issue before the court was whether the Tribunal correctly interpreted the phrase "able to earn in suitable employment" in s 19(2) of the legislation.

The court examined the Tribunal's reasoning and found that it did not adequately consider alternative forms of suitable employment that Ms Davies could have engaged in, nor did it properly distinguish between the ability to earn income and the profitability of a business. The court held that the Tribunal's conclusion that Ms Davies' operating losses should be equated with her inability to earn income was flawed. By failing to undertake the comparative exercise mandated by the definition of "AE" in s 19(2), the Tribunal misconstrued the statutory phrase, leading to an incorrect determination of Ms Davies' ability to earn.

The court's reasoning highlighted the importance of a comprehensive analysis of all suitable employment opportunities and a clear distinction between business profitability and personal earning capacity. The Tribunal's decision was found to be legally flawed, and the case was remitted for reconsideration. The court's decision underscored the need for a meticulous application of the statutory definition of "AE" and the necessity of considering all relevant factors in determining an individual's ability to earn in suitable employment.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

FLICK J
In 1999 she was offered, and accepted, voluntary redundancy.THE TRIBUNAL DECISION AND THE CONTENTIONS ADVANCED The misconstruction of the phrase “able to earn in suitable employment”, as it appears in s 19(2), is said by Comcare to emerge from the following paragraphs of the Tribunal’s decision:67. It was not disputed on behalf of Ms Davies that employment in her own business, Bali Gardens, should be regarded as suitable employment for the purposes of section 19. On the basis that the business enabled Ms Davies to utilise her experience with the Indonesian language and culture in a non-hierarchical environment we are satisfied that this was a proper concession to be made.B.3. What amount was Ms Davies able to earn in her employment in her own business during the period 28 September 1999 and 19 April 2006?68. On the basis of the report of Sinclair King of 16 August 2004, we are satisfied that during the financial years ending June 2001–2004 inclusive, Ms Davies made a loss in operating the Bali Gardens business. We are satisfied therefore that the amount which Ms Davies was able to earn in her own business during each of the financial years referred to was nil. Although we do not have available the evidence to enable us to make such a finding, it is likely that the results for the remainder of the period under consideration were the same.69. We have considered the report of Mr Bilboe that in his opinion Bali Gardens could be “a lucrative small business.” However this comment refers to the potential of the business rather than its earning capacity in the period under consideration and in any event, on the evidence before us, Mr Bilboe is not qualified to express this opinion. The misconstruction of that phrase as it appears in s 19(2) is said to be evident — at least in part — by reason of the Tribunal failing to give consideration to whether the Bali Gardens business was the only “suitable employment” and by the failure on the part of the Tribunal to give consideration to the ability of Ms Davies to earn income in other forms of “suitable employment”. Comcare does not put in issue the conclusion that Ms Davies’ chosen business venture, the Bali Gardens venture, was “suitable employment”. Its contention is that the Tribunal failed to consider whether there was other “suitable employment” which could be pursued by her. By failing to consider other employment the Tribunal, it is said, failed to complete the comparative exercise mandated by the definition of “AE” in s 19(2). Nor does Comcare put in issue the quantification of the monies earned by Ms Davies in her Bali Gardens venture. Its contention is that the Tribunal misconstrued “AE” in equating operating loss with ability to earn. Before the Tribunal Comcare filed a Statement of Facts and Contentions which provided in part as follows:CONTENTIONSThe Respondent contends that:1. The available evidence demonstrates on the balance of probabilities that as at 3 December 2001:(a)the applicant was not, and is not, presently incapacitated for work as a result of an accepted compensable condition. Therefore, she is not entitled to compensation under Part II, Division 3 of the SRCA.(b)Alternatively, the applicant has an ability to earn an amount in suitable employment equal to her NWE as a secondary school teacher for the purposes of sub-section 19(4) of the SRCA and is not entitled to compensation under Part II, Division 3 of the SRCA.(c)Alternatively, the applicant has failed to continue in suitable employment for the purposes of sub-section 19(4) of the SRCA and is not entitled to compensation under Part II, Division 3 of the SRCA.(d)Alternatively, an ability to earn should not be confused with ability to run a profitable business: Hooper and Comcare (2001) 33 AAR 326. As such, any losses incurred by the applicant in running her business, Bali Gardens, ought not be taken into account in calculating AE for the purposes of subtracting any AE from the applicant’s NWE. See also sub-section 19(4)(g) of the SRCA.48. The decision under review should be affirmed.49. The respondent reserves the right to amend this document.As to the form of such statements, see the “Sample Statement of Facts, Issues and Contentions” as provided with the “Guide to Workers’ Compensation Jurisdiction” prepared by the President of the Tribunal, Downes J.

Ratio Decidendi

Legal Principle Established

Established by: FLICK J

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