Commission for the Safety, Rehabilitation & Compensation of Commonwealth Employees v De Klerk, J
[1991] FCA 576
•20 SEPTEMBER 1991
Re: COMMISSION FOR THE SAFETY, REHABILITATION AND COMPENSATION OF COMMONWEALTH
EMPLOYEES
And: JUDITH DE KLERK
No. ACT G25 of 1990
FED No. 576
Administrative Law
(1991) 14 AAR 226
(1991) 31 FCR 382, (1991) 24 ALD 22
(1991) 39 IR 367
COURT
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Neaves J.(1)
CATCHWORDS
Administrative Law - Appeal from Administrative Appeals Tribunal - Compensation - Amount payable in respect of travel by private motor vehicle for purpose of receiving medical treatment - Meaning of "expenditure reasonably incurred by the employee in making a necessary journey" in connexion with the obtaining of medical treatment - Whether appropriate to determine a fixed rate per kilometre travelled - Components to be included in calculation of rate.
HEARING
CANBERRA
#DATE 20:9:1991
Counsel for the applicant : Mr D.J.M. Bennett, QC
and Mr R.B. Wilson
Solicitor for the applicant : Australian Government Solicitor
Counsel for the respondent : Mr R. Refshauge
Solicitors for the respondent: Macphillamy Cummins and Gibson
ORDER
The decision of the Administrative Appeals Tribunal given on 10 May 1990 be set aside and, in lieu thereof, a decision be substituted affirming the decision under review of 12 July 1989 that the correct motor vehicle allowance to be paid to Judith De Klerk pursuant to s.37(7) of the Compensation (Commonwealth Government Employees) Act 1971 was 11.10 cents per kilometre.
There be no order as to costs.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an application by way of appeal pursuant to s.44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) by the Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees ("Comcare") from a decision of the Administrative Appeals Tribunal ("the Tribunal") given on 10 May 1990. The Tribunal expressed its decision in the following terms:
"The Tribunal -
(a) sets aside the decision under review of 12 July 1989 that the correct motor vehicle allowance to be paid to the applicant pursuant to s.37(7) of the Compensation (Commonwealth Government Employees) Act 1971 was 11.1 cents per kilometre;
(b) remits the matter to the respondent for reconsideration in accordance with the direction that the appropriate rate at which the applicant should be paid in respect of travel undertaken for medical treatment during 1986 and 1987 is the applicable Public Service Rate."
The reference in the decision to the respondent is a reference to Comcare. The reference to the applicant is a reference to Judith de Klerk, the respondent to the present application. I shall refer to her as "the respondent".
The matter proceeded before the Tribunal and before the Court on the basis that, notwithstanding the repeal effected by s.139 of the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth), the issue between the parties is to be resolved by reference to the provisions contained in s.37(7) of the Compensation (Commonwealth Government Employees) Act 1971 (Cth) ("the Compensation Act"). This was said to follow from the transitional provisions contained in s.124 of the Act of 1988 (see sub-ss.(1), (8) and (9)). Section 37(7) of the Compensation Act provided:
"Where compensation in respect of the cost of medical treatment is payable by the Commonwealth under this section, the Commonwealth is liable to pay compensation to the employee of an amount equal to the amount of the expenditure reasonably incurred by the employee in making a necessary journey in connexion with the obtaining of that medical treatment or in remaining, for the purpose of obtaining that medical treatment, at a place to which he has made a journey for that purpose."
It is also necessary to note the provisions of s.7(6) of that Act which provided:
"For the purposes of the application of this Act in relation to a person employed by a prescribed authority of the Commonwealth, references in this Act (except in sub-section (3) of section 52) to the Commonwealth shall be read as references to that authority."
On 5 August 1985, the respondent was involved in a motor vehicle accident in which she sustained a cervical spine injury. On 21 March 1986, the injury was aggravated in the course of her employment as a teacher with the Australian Capital Territory Schools Authority ("the Authority"), a prescribed authority for the purposes of the Compensation Act. On 26 January 1987, a determination was made under the Compensation Act that the Authority was liable to pay compensation in respect of the aggravation. On 3 November 1987, it was determined that the effects of the aggravation of the respondent's condition had ceased not later than 17 April 1986.
On 30 October 1987, the respondent had lodged a further claim for compensation stating that her employment as a teacher was aggravating her condition. On 2 December 1987, a determination was made that the Authority was liable to pay compensation in respect of that aggravation for the period from 28 April 1986 to 16 June 1987. It was further determined that the effects of the aggravation had ceased to exist on and from 17 June 1987.
The respondent, pursuant to s.37(7) of the Compensation Act, claimed compensation on account of expenditure said to have been reasonably incurred by her between 21 March and 17 April 1986 and between 28 April 1986 and 16 June 1987 in making necessary journeys in obtaining medical treatment in respect of her compensible injury. Of the total amount claimed, $577.22 was identified as relating to journeys that were made by privately-owned motor vehicle, that amount being calculated at the rate of 31 cents per kilometre travelled. The vehicle in question was stated to have an engine capacity of 2000 cubic centimetres.
In respect of the journeys between 21 March and 17 April 1986 that were accepted as having been necessary for the purpose of obtaining requisite medical treatment, compensation was paid to the respondent at the rate of 31 cents per kilometre travelled. However, in relation to the journeys between 28 April 1986 and 16 June 1987 that were accepted as having been necessary, determinations were made on 17, 18 and 24 August 1988 by a delegate of the Commissioner for Employees' Compensation that compensation was payable at the rate of 11.10 cents per kilometre travelled. Upon reconsideration at the request of the respondent, those determinations were affirmed by Comcare on 12 July 1989. The respondent then sought a review by the Administrative Appeals Tribunal of the decision affirming those determinations with the result already mentioned.
The Tribunal, after referring to the provisions of s.37(7) of the Compensation Act, said:
"5. The legislation does not provide a schedule of rates for travel expenses incurred by a claimant undergoing medical treatment. The rate of 11.1 cents per kilometre travelled that was adopted by
(Comcare) was based on the scales applied by the Department of Community Services and Health ('the Community Services Rate') in meeting the costs incurred by patients who use private transport to travel to rehabilitation centres. The Community Services Rate was derived from the Motor Vehicle Allowance payable ('the Public Service Rate'), in accordance with Determination No.10 of 1983 made under the Public Service Act 1922, to public servants who use their private vehicles in the course of their duties. The Public Service Rate allows for depreciation, interest, comprehensive and third party insurance, registration, driver's licence, motor organisation fees, tyres, petrol, repairs and maintenance. The Community Services Rate, on the other hand, only includes components in respect of tyres, petrol, repairs and maintenance. The other items included in the Public Service Rate are excluded as 'standing costs'. The adoption by Comcare of the Community Services Rate was based on the view that that rate is a more accurate reflection of the amount reasonably incurred in making a journey for necessary medical treatment."
The Tribunal noted the respondent's primary submission "that the Public Service Rate is a truer indicator of the costs reasonably incurred in using a private motor vehicle to travel to and from medical treatment" and referred to a decision of the Tribunal, Re E.H. Willis and Comcare (1989) 17 ALD 68, and to an unreported decision of the South Australian Workers Compensation Appeal Tribunal, Re J.T. Rice (No. A16/1989, 25 August 1989), both of which were said to support that submission. The Tribunal also referred to other submissions made to the Tribunal on behalf of the respondent, including a submission that an allowance of 11.10 cents per kilometre was not reasonable in view of the rising expenses associated with driving a motor vehicle.
The Tribunal then referred to the submissions put to the Tribunal on behalf of Comcare. The primary submission was that the language of s.37(7) of the Compensation Act imported a causal relationship to which the "but for" test was applicable, the correct test to be applied being, so it was submitted, whether the expenditure would have been incurred "but for" the making of the necessary journey. A further submission was made that, since the legislation provided for the reasonable cost of making a journey, and not for the cost of running a motor vehicle, "standing costs" failed to satisfy the "but for" test with the consequence, so it was said, that "it was reasonable to exclude these expenses when calculating what the reasonable rate of reimbursement" to the injured employee should be. Comcare also submitted to the Tribunal that it should not follow the decisions in Re E.H. Willis and Comcare and Re J.T. Rice (supra). The Tribunal also noted the further submission on behalf of Comcare that, if it were to find in favour of the respondent and allow "standing costs" to be taken into account in calculating the expenses of a compensible journey, the Tribunal would need to be satisfied that the vehicle was owned by the respondent and that the relevant "standing costs" had been incurred by her.
The Tribunal agreed with the submission that s.37(7) of the Compensation Act required a causal nexus between the expenditures for which reimbursement was sought and the compensible journey. The Tribunal, however, concluded that Comcare had attributed "an overly narrow ambit" to the "but for" test and continued:
"It is true that the costs of motor vehicle registration and insurance are items which would have been incurred by the
(respondent) irrespective of the need to undertake the compensible journey. This can also be said however of items allowed for by the Community Services Rate adopted by Comcare. The cost of tyres, repairs and maintenance is a standing cost in that it is a recurrent specific expense. By their very nature these are payments made in advance of the journey undertaken for medical treatment. As such, it is not possible to say that, for example, the annual replacement of tyres is an expense which would not have been incurred but for travelling to and from a medical appointment. Moreover, expenses like registration, driver's licence fees and so forth are expenses which an individual is legally obliged to pay and cannot avoid. Accordingly the Tribunal prefers a formulation of the test in relation to s.37(7) that requires an enquiry as to whether the expense would have been reasonably incurred as part of the whole parcel of journeys which the claimant may need to make. It is therefore reasonable to include standing costs in the calculation of the appropriate motor vehicle allowance to be paid by Comcare to former employees."
Referring to the submission that Re Willis and Comcare (supra) was wrongly decided in concluding that the deduction allowable by the Commissioner of Taxation in respect of the use of a motor vehicle for limited business purposes was an appropriate rate for compensation purposes, the Tribunal said:
"The Tribunal in Re Willis however merely stated that that situation 'closely paralleled' that of an injured employee seeking reimbursement of outgoings reasonably incurred in using a private vehicle to travel to and from medical appointments. It was also argued by (Comcare) that what occurred in the taxation field was irrelevant to the construction of the subject compensation legislation. I disagree. It is particularly appropriate to have regard to the apportionment approach inherent in the taxation guidelines for a number of reasons. First, Comcare adopted the Community Services Rate which , like the taxation allowance, is based on the Public Service Rate. Secondly, the apportionment approach is necessarily incorporated into the Community Services Rate. What the allowance does is to reimburse the claimant in respect of that proportion of his/her travels that are related to his/her compensible condition. The result is that I consider that the decisions in Re Willis and Re Rice should be followed."
Finally, the Tribunal expressed the view that there was no issue before it whether the vehicle was owned by the respondent or whether the relevant "standing costs" had been incurred by her.
It is convenient to begin by referring not only to sub-s.(7) of s.37 of the Compensation Act but to other of its sub-sections, noting that in some instances the reference was to "cost" while in sub-s.(7) the reference was to "expenditure". Sub-section (7) operated only where compensation "in respect of the cost of medical treatment" was payable under s.37. Sub-section (1) of that section provided that, where an injury was caused to an employee, compensation was payable "in respect of the cost of medical treatment obtained in relation to the injury, being treatment that it was reasonable in the circumstances for the employee to obtain". Where those conditions were fulfilled, the amount of compensation payable, although related to the cost of the medical treatment, was expressed as being such amount as was appropriate to the medical treatment having regard to the charges customarily made for similar medical treatment in the place where that treatment was obtained. Sub-section (3) of s.37 referred to the situation where, as a result of an injury, there was a reasonable requirement that a building occupied, or a vehicle or article used, by the employee be altered or an aid or appliance for use by the employee be obtained, repaired or replaced. In such cases, compensation was payable of such amount as was reasonable in respect of the cost payable by the employee. Sub-section (7), however, provided for the amount of compensation payable in the circumstances referred to in that sub-section to be determined not by reference to the cost to the employee but by reference to "the amount of the expenditure reasonably incurred by the employee" in making a necessary journey in connexion with the obtaining of medical treatment or in remaining, for the purpose of obtaining that treatment, at a place to which he had made a journey for that purpose. The emphasis was, thus, on expenditure incurred by the employee.
It would, therefore, seem that the legislative policy underlying s.37(7) was to reimburse an injured employee for the actual expenditure reasonably incurred in making a necessary journey for the requisite purpose and, where it was necessary to stay at a place for the purpose of obtaining medical treatment, to reimburse him for the actual expenditure reasonably incurred in, for example, obtaining accommodation. Where the journey was undertaken by public transport or by taxi, there would be no difficulty in determining the actual expenditure incurred though a question might arise in a particular case whether that expenditure was reasonably incurred.
Where a necessary journey was undertaken by a motor vehicle owned by the employee, the position was obscure. Although s.37(8) provided that the matters to which regard was to be had in deciding questions arising under s.37(7) were to include the places at which appropriate medical treatment was available for the employee, the means of transport available for the journey of the employee, the route or routes by which the employee could have travelled and the accommodation available to the employee, no legislative guidance was given as to the manner in which the amount of the expenditure reasonably incurred by the employee in making the necessary journey by private motor vehicle was to be ascertained. It is, I think, too late in the day to conclude that the legislature intended that no compensation was to be payable where the journey was undertaken by private motor vehicle.
In the absence of legislative guidance and in the light of the administrative problems attendant upon the identification, in each individual case, of the actual expenditure incurred by the injured employee in relation to his private motor vehicle, the view appears to have been taken that it was reasonable for the Commissioner for Employees' Compensation to adopt, in respect of vehicles of differing specified engine capacities, fixed rates per kilometre which, when applied to the distance travelled, would determine the amount which he was prepared to pay in fulfilment of the obligation imposed by s.37(7). Such an approach would, of course, have had to be subject to the amount so determined being increased if, in a particular case, it appeared that the amount of the expenditure reasonably incurred in making the journey exceeded the amount determined by the application of the fixed rate to the distance travelled. Comcare appears to have adopted a similar approach.
It is by no means clear that such an approach accorded with the statutory provision. It was rejected by the Workers Compensation Appeal Tribunal of South Australia ("the Appeal Tribunal") in Re J.T. Rice (supra) in considering an analogous provision in the Workers Rehabilitation and Compensation Act, 1986 of that State. Section 32(1) of that statute entitled a worker to be compensated for costs of a kind described in sub-s.(2) reasonably incurred by the worker in consequence of having suffered a compensible disability. Sub-section (2) provided that the costs referred to in sub-s.(1) included:
"(d) the cost of travelling, or being transported, to and from any place for the purpose of receiving medical services, hospitalization or approved rehabilitation."
The Review Officer, whose decision was the subject of the appeal to the Appeal Tribunal, had considered that the rate of remuneration for the use by an employee of a privately owned vehicle prescribed by the Metal Industry Award, a rate per kilometre for all vehicles regardless of the type or age of the vehicle used, was the most appropriate general rate to adopt for the purpose of s.32(2)(d) of the South Australian statute. The Review Officer had said:
"It seems to me that a single average approximating the true costs of operating a vehicle for reimbursement, regularly updated and easily ascertainable from the public record is that appearing in the Metal Industries Award which is already regarded as a bench mark award for many public purposes in Australia. On the balance of probabilities, I find that this figure represents the best one to adopt as a convenient global approximation of the true costs of travel in a private motor vehicle for reimbursement under section 33 of the Act."
In rejecting this approach, the Appeal Tribunal said:
"Whilst we sympathise with the Review Officer in his desire to provide a ready formula for the benefit of all parties concerned with the administration of the Act, it seems to us that section 32 does not permit a general rate to be struck at which all workers are to be compensated for each kilometre travelled in the worker's own vehicle to obtain medical treatment whatever the make, size or age of the vehicle used.
The section directs that a worker is entitled to be compensated for the cost of travelling reasonably incurred by him in consequence of having suffered a compensable disability."
...
We consider that the most appropriate way to ascertain the cost of travelling in the worker's own vehicle is to first calculate the capital cost of the vehicle, the stamp duty, registration, comprehensive and third party insurance thereon. That total capital cost must then be depreciated based solely upon the distance actually travelled to receive medical treatment. Secondly the calculation should take into consideration the driving costs per year which includes, petrol, oil, tyres and general maintenance of the vehicle. This second sum so calculated will then have to be reduced to a kilometre rate based upon the actual number of kilometres travelled by the worker in a year in that particular vehicle and not upon some hypothetical distance travelled. The two sums so ascertained will then collectively give the total cost of travel for this worker. Even using the abovementioned formula we consider many matters will not be capable of precise proof or calculation and a somewhat broad axe approach will need to be adopted. As we understand the situation the worker did not give any detailed evidence of the actual cost of purchasing, placing on the road, or maintaining the particular vehicle used to travel to receive medical services, or the driving costs associated with the use of that vehicle. The claim seems to have been argued before the Review Officer on the basis of a rate of either 20 cents per kilometre which was the sum advocated by the Corporation, or a greater sum based on the rate of travel contained in Awards of the Commission or as recommended by the R.A.A. It seems to us that we should, given that situation, and our view of the true meaning and proper application of the statutory provision, set aside the determination made, and allow either party to call whatever further evidence either party may wish to adduce, so that this tribunal can then, in accordance with these reasons, ascertain the real cost to the worker of travelling in his own vehicle to and from his home to obtain medical treatment. There will be an order to that effect."
In the present case, however, no issue was raised whether s.37(7) of the Compensation Act authorised the decision-maker to adopt, as the measure of compensation payable in respect of a necessary journey, an amount ascertained by applying to the distance travelled a rate per kilometre which was calculated otherwise than by reference to amounts shown to have been expended by the respondent in respect of the motor vehicle used to undertake the journey. The matter proceeded before the Tribunal on the sole issue whether, in ascertaining the amount of compensation payable, the decision-maker, instead of applying what was referred to as the "Community Services Rate", should have applied the "Public Service Rate". That being the basis upon which the matter proceeded before the Tribunal, it is, I think, appropriate that the question whether the Tribunal erred in law in reaching its decision be considered only against that background and in that context.
The "Community Services Rate" that was determined in respect of vehicles with an engine capacity of 1501 to 2000 cubic centimetres was a rate of 11.10 cents per kilometre. Neither the methodology nor the calculations by which that rate was determined is or are disclosed in any of the material placed before the Tribunal. It would, of course, be entirely fortuitous if, in any particular case, the rate so determined, when applied to the distance travelled, should equate the actual expenditure reasonably incurred by the employee in making the journey.
The respondent did not place any material before the Tribunal as to the actual expenditure incurred by her in making the journeys in respect of which she claimed reimbursement. As has been mentioned, she relied solely on what has been referred to as the "Public Service Rate" in support of the claim that she should be paid compensation at the rate of 31 cents per kilometre travelled. The "Public Service Rate" was prescribed by Determination No.10 of 1983, extracts from which were included in the material before the Tribunal, made under s.82D of the Public Service Act 1922 (Cth). That section provided, inter alia, that the Public Service Board might, by instrument in writing, determine the terms and conditions of employment of officers and employees and that a determination so made might include provision for and in relation to the allowances of officers and employees.
Clause 6.1.2 of the Determination had the heading "Use of private vehicle for official purposes". Relevant provisions of that clause were in the following terms:
"6.1.2(1) The relevant Secretary may authorize an officer to use for official purposes, during the period specified in the authority, a motor vehicle owned or hired by the officer if the relevant Secretary is satisfied that the use by the officer of the motor vehicle would result in greater efficiency or involve the Commonwealth in less expense than would be the case if public transport or a vehicle owned by the Commonwealth were used.
(2) Subject to subclause (6), where an officer uses a motor vehicle in pursuance of an authority given under subclause (1) he is entitled to be paid, for each kilometre that the motor vehicle travelled, an allowance calculated in accordance with Part A of Schedule 11.
(3) Where an officer satisfies the Board that the allowance to which he is entitled under subclause (2) and, where applicable, the amount of any additional allowance payable under clause 6.1.4, is insufficient to meet the amount of the expenses reasonably incurred and paid by the officer by reason of the use of a motor vehicle for official purposes, the Board may grant to the officer an additional allowance equal to the amount by which the amount of those expenses exceeds the amount of the allowance."
It is not material for present purposes to refer to subclause (6) or to clause 6.1.4.
Part A of Schedule 11 as in force at the relevant time was not included in the extract from the Determination. However, there was included in the material before the Tribunal a document headed "1986 Review of Motor Vehicle Allowance Rates" which the Tribunal was informed contained details of the rates prescribed by the Determination at the relevant time. The table set out in the document was described as "Table I - Summary of Calculations - All Components". It related to vehicles in different categories identified by reference to their engine capacity. In relation to vehicles with an engine capacity of 1501 to 2000 cubic centimetres, the table gave the following information:
COMPONENT CENTS/KM
Depreciation 9.81
Interest 6.56
Comprehensive Insurance 1.71
Third Party Insurance 1.17
Registration, Driver's
Licence, Motoring
Organisation Fees 0.73
Tyres 0.61
Petrol 5.85
Repairs and Maintenance 4.08
TOTAL 30.52
It is to be noted that s.82D of the Public Service Act gave no relevant guidance as to the considerations that were to be taken into account in determining the amount of any allowance which was to be payable. In particular, it was not provided that, in determining the amount of any allowance payable in respect of the use of a private vehicle for official purposes, regard was to be had to the expenditure reasonably incurred by the officer or employee in making any relevant use of the vehicle. Nor did the Determination or the document referred to above indicate how the amounts payable in respect of the use of a private vehicle for official purposes, or the sums included in respect of the various components taken into account in arriving at those amounts, were calculated. All that appeared from the material before the Tribunal was a general statement that the rates "reflect these components as cents or parts of a cent per kilometre over the running life and/or annual running of representative vehicles from the various classes of vehicle engine capacity".
It is also to be noted that the document headed "1986 Review of Motor Vehicle Allowance Rates" evidenced a rate of 30.52 cents per kilometre, not the rate of 31 cents per kilometre upon which the respondent relied. Nor did the document indicate a rate of 11.10 cents per kilometre in respect of the components tyres, petrol and repairs and maintenance, the amounts shown for those components totalling 10.54 cents.
Counsel for Comcare submitted that the Tribunal had misdirected itself as to the meaning and effect of the statutory provision. The Tribunal was said to have erred in two respects. It had failed, so it was submitted, to give effect to the statutory requirement that the compensation payable equate "the expenditure reasonably incurred by the employee". It had also failed, according to the submission, to give effect to the further statutory requirement that such expenditure answer the description of expenditure incurred "in making a necessary journey". To include in the compensation payable a component (9.81 cents per kilometre) in respect of depreciation, as was necessarily involved in the Tribunal's adoption of the "Public Service Rate", was said to demonstrate the first of the Tribunal's errors. The second error was to include components in respect of what were referred to as "standing costs", namely interest (6.56 cents per kilometre), comprehensive and third party insurance (2.88 cents per kilometre) and registration, driver's licence and motoring organisation fees (0.73 of a cent per kilometre).
The meaning of the word "expenditure" was discussed in Oram (Inspector of Taxes) v Johnson, (1980) 1 WLR 558, although the word was there being considered in a different statutory context. In that case, the taxpayer had sought to bring within the purview of par.4(1)(b) of Schedule 6 to the Finance Act 1965 (U.K.) a notional amount representing the value of his own personal labour in repairing and improving a derelict cottage that he had purchased and subsequently sold. Schedule 6 brought to tax the capital gain accruing on the disposal of an asset but allowed as deductions from the sale price the amount or value of the consideration, in money or money's worth, given wholly and exclusively for the acquisition of the asset and, by par.4(1)(b), "the amount of any expenditure wholly and exclusively incurred on the asset ... for the purpose of enhancing the value of the asset, being expenditure reflected in the state or nature of the asset at the time of the disposal ...". Disallowing the taxpayer's claim, Walton J. said at pp 561-2:
"It seems to me that, although one does in general terms talk about expenditure of time and expenditure of effort, having regard particularly to the opening words of paragraph 4(1), where the expenditure is to be 'a deduction,' the primary matter which is thought of by the legislature in sub-sub-paragraph (b) is something which is passing out from the person who is making the expenditure. That will most normally and naturally be money, accordingly presenting no problems in calculation; but that will not necessarily be the case. I instance the case (it may be fanciful, but I think it is a possible one and tests the principle) of the taxpayer employing a bricklayer to do some casual bricklaying about the premises, the remuneration for the bricklayer being three bottles of whisky at the end of the week. It seems to me that that would be expenditure by the taxpayer, because out of his stock he would have to give something away to the person who was laying the bricks, and I do not think that that would present any real problems of valuation, or other difficulty.
But when one comes on to his own labour, it does not seem to me that that is really capable of being quantified in this sort of way. It is not something which diminishes his stock of anything by any precisely ascertainable amount; it is something which would have to be estimated. It has been estimated here by taking the very modest sum of 1 pound an hour, but the fact that the taxpayer has been modest in his demands does not enable one to escape from the crucial crunch, which is how, in a case which was contested and where the amount claimed was something which was larger than was obviously right, one would test it. It seems to me that there would undoubtedly have to be found in the end some machinery for translating into money terms the work put in by the owner of the asset himself, if that was to be allowable. But it seems to me that that does not fall into the ordinary meaning of 'the amount of any expenditure wholly and exclusively incurred on the asset by him or on his behalf.' The wording, to my mind, just does not fit that sort of situation.
It is perhaps a matter of first impression based on the impression that the word 'expenditure' makes on one; but I think that the whole group of words, 'expenditure,' 'expended,' 'expenses' and so on and so forth, in a revenue context, mean primarily money expenditure and, secondly, expenditure in money's worth - something which diminishes the total assets of the person making the expenditure - and I do not think that one can bring one's own work, however skilful it may be and however much sweat one may expend on it, within the scope of paragraph 4(1)(b)."
As has already been mentioned, the method used to calculate the amount allowed in the "Public Service Rate" on account of depreciation does not appear from any of the material placed before the Tribunal. It may be assumed, however, that the amount was assessed as reflecting a proportion of the amount by which the value of representative motor vehicles of the specified engine capacity would be expected to diminish over the assumed life of such vehicles. In my opinion, to include in the amount of compensation payable a component, however calculated, on account of depreciation is to include in the compensation a component which cannot properly be described as an item of expenditure incurred by the employee. It follows that the inclusion of a component on that account was not authorised by s.37(7) of the Compensation Act.
Depreciation apart, the other components included in the "Public Service Rate" which had no counterpart in the "Community Services Rate', viz. the so-called "standing costs" comprising comprehensive insurance, third party insurance and registration, driver's licence and motoring organisation fees, can property be described as items of expenditure. Each of those items might also properly be described as forming part of the costs of, or associated with, the operation of a motor vehicle. That is, in truth, the basis of the decision in Re Willis and Comcare (supra). But the question that arises in relation to those items is not whether they form part of the costs of, or associated with, the operation of a motor vehicle but whether they can properly be described as items of expenditure incurred "in making a necessary journey". The focus of the provision is upon the necessary journey. I respectfully differ from the view expressed by the Tribunal that what s.37(7) requires is an enquiry whether the expense would have been reasonably incurred "as part of the whole parcel of journeys which the claimant may need to make". It is also to be noted that the language of s.37(7) of the Compensation Act differs from that under consideration in Re J.T. Rice (supra). The provision there in question was somewhat wider, referring simply to "the cost of travelling".
In my opinion, there was no material before the Tribunal upon which it could find the necessary causal connection between the components representing "standing costs" and the particular journeys in respect of which the claim for compensation was made. It may well be that in a particular case evidence could be adduced of special features which, if accepted, would establish on the balance of probabilities that the necessary causal nexus existed but the respondent in the present case did not attempt to assay that task. The question was left as one of general principle.
It follows that, in my opinion, the Tribunal erred in law in deciding that the appropriate rate at which the respondent should be paid was the applicable "Public Service Rate".
As a provision similar to s.37(7) of the Compensation Act now appears in s.16(6) of the Commonwealth Employees' Rehabilitation and Compensation Act, it is not inappropriate, before parting with the case, to make a recommendation in similarly strong terms to that made to the legislature of South Australia in Re J.T. Rice (supra). The Appeal Tribunal there said:
"In our view the correct method of calculating the cost of travelling to obtain medical or other treatment where the worker's own vehicle is utilized is not only cumbersome but will prove expensive to properly and justly administer. We therefore strongly recommend to the legislature that the Act be amended to provide that a worker who uses his own vehicle to undergo necessary medical treatment or any other treatment or procedure envisaged by section 32, be reimbursed at a rate or rates prescribed by Regulation. If that procedure is adopted then the rate or rates can be updated from time to time to take cognisance of increases in running charges and capital costs.
Although that system, if accepted, will produce somewhat arbitrary figures, overall we consider that if the regulations take cognisance of the different types and perhaps ages of vehicles, it will produce a reasonably just result, and certainly one that will be less irritating for workers, because of the difficulty of proof of the cost involved, and, undoubtedly it will prove less expensive to administer."
For the reasons set out above, the decision of the Tribunal is set aside and, in lieu thereof, a decision is substituted affirming the decision under review of 12 July 1989 that the correct motor vehicle allowance to be paid to the respondent pursuant to s.37(7) of the Compensation Act was 11.10 cents per kilometre. As the Court was informed that the applicant did not seek an order for costs, no order for costs is made.
0
0
0