Commonwealth of Australia v Angel, R.J

[1989] FCA 308

NOT FOR GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY )	No. N G 118 of 1989

)

GENERAL DIVISION )

ON APPEAL FROM THE GENERAL ADMINISTRATIVE DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN: COMMONWEALTH OF AUSTRALIA

Applicant

AND: RAYMOND JOHN ANGEL

Respondent

CORAM :	WILCOX J
PLACE :	SYDNEY
DATE :	15 MAY 1989

glven on 15 November 1988 be set aslde.

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The declsion of the Admlnlstratlve Appeals Trlbunal

2. The matter be rernltted to the Trlbunal to be heard and decided again with such further evidence as the Tribunal shall allow.

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

NOT FOR GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY )	NO. N G 118 of 1989

1

GENERAL DIVISION )

ON APPEAL FROM THE GENERAL ADMINISTRATIVE DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN: COMMONWEALTH OF AUSTRALIA

Appllcant

AND: RAYMOND JOHN ANGEL

Respondent

CORAM:	WILCOX J
PLACE :	SYDNEY

DATE : 15 NAY 1989

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- EXTEMPORE REASONS FOR JUDGMENT

There 1 s before the Court an appeal under 5.44 of the

Administrative Appeals Tribunal Act 1975 aqalnst a declsion

made by the Administrative Appeals Trlbunal -- Nr C J Bannon
QC, Deputy President, on 15 November 1988 -- In respect of an
application for review of a determination made by a delegate
of the Commissioner for Employees Compensation pursuant to the
Compensation (Commonwealth Government Employees) Act 1971.
That Act was repealed, as from 1 December 1988 at the time of
the enactment of the Commonwealth Employees' Rehabilitation
and Compensation Act 1988. However, ~t is clear that the
present case 1s unaffected by that repeal: see 5.129 of the
latter Act and s.8 of the Acts Interpretation Act 1901.

The issue before the Administrative Appeals Tribunal

was whether the applicant before the Tribunal -- the present
respondent, Raymond John Angel -- suffered a disability
arising out of his employment with the Commonwealth of

Australia, the respondent before the Trlbunal and the present

applicant.

Mr Angel served in the Australian Navy for a perlod

of about ten years, from 1971 to 1981. It was common ground
before the Tribunal that, during that tlme, he suffered from a

condition known as Scheuermannrs dlsease, a disease which:	-
affects,the spine of young people and adolescents. There3as

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evidence-of certain injuries to his back whlch occurred durlng
hls perlod of service. It appears that, after Hr Angel's
discharge from the Navy, llabillty was admitted, on behalf of
the Commonwealth, for the payment of compensation for a
period. However, in 1987 liability was denled in respect of
any future payments; the vlew then being taken that there was
no continuing disability. Evldence was led before the
Trlbunal from a number of medlcal practitioners. As counsel
says in her submissions today, the evidence of the
practitioners varred from one extreme to the other. On the
one hand, there was evidence of an experienced practitioner
that Mr Angel was "virtually unemployable" and that he would
flnd it "immensely difficult" to obtain suitable work in hls
profession as a cook. At the other extreme, there was
evldence to the effect that, although there were some
continuing symptoms, they had no effect upon Mr Angel's
employability. Other medical evidence fell in between those
extremes.

In hls reasons for declslon, the learned Deputy

President referred to the medical evidence. He summarized the
matter by saylng that the "real problem facing me is a
question of the degree of incapacity from whlch the appllcant

suffers." After referring to certaln evidence of the

activities whlch the applicant was able to undertake, Mr

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Bannon concluded hls reasons in this way:	= -
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,"DC Kerrrdge was of the opinion that he is flt	i
- to do light duties, and that he had a capacity

-for work whether in hls chosen fleld as a cook
or in some other fleld in the entertainment
industry." [I Interpolate that Dr Kerrldge
actually referred to the hospitality
industry.] "I agree wlth that. The
impression I formed in this case is that
this man has a continuing Incapacity whlch I
would not put any hlgher than 40 per cent. I
am saying 40 per cent, whlch may be a trlfle
generous, but, nevertheless, one has to take
lnto account the fact that employers are not
generous once they known that a person has an
Injury. I do belleve that the appllcant does
have a capacity to work.
I dlrect that the determination we are

considering be set aslde and the matter

remitted to a delegate of the Commissloner for
Employees' Compensatlon to determine the
appropriate payment of compensation, on the
basls of my assessment of the appllcant's
Incapacity being 40 per cent. As to the
questlon of costs, I direct that the
Commonwealth pay the costs of the applicant,
whlch are to be assessed and agreed upon, but
In default of agreement the costs are to be
taxed before the District Registrar of the

Administrative Appeals Tribunal in Sydney

according to the thlrd scale used by the New

South Wales Compensatlon Court."

The formal decision of the Tribunal, as slgned by the Deputy

President, is in the followlng form:

"1. the decision under revlew 1s set aside

and the matter is returned to the
Commissloner for Employees1 Compensation

to determine the appropriate sum of

compensation that should be pald to the

applicant;

2. the Tribunal determines that the
appllcant's degree of incapacity for work
1s forty per cent;

3. costs are to be assessed and agreed upon by the parties and are to be pald by the Commonwealth, but in default of agreement

as to costs, they are to be taxed by the

Distrlct Reglstrar in accordance wlth the

thlrd scale of the Compensation Court of -

New South Wales." 3

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-Complaint is made on behalf of the present applicant,

the Commonwealth, in relatlon to Mr Bannon's decision. Three
separate grounds have been argued but, to a considerable
extent, they overlap. The grounds are articulated in the
amended Notlce of Appeal in the followlng way:

"(a) there was no evidence before the Tribunal

on which it could determine that the
applicant's degree of incapacity for work

is forty per cent

(b)	the Tribunal failed to determine the 'amount' Mr Angel could earn and the 'suitable employment or business' In which he could earn it for the purposes
of s.46 Compensation (Commonwealth Government Employees) Act 1971
(c)	the Tribunal failed to lnform the partles that it proposed to take Into account the fact that employers are not generous once they know a person has an injury and to
afford the partles an opportunity to deal with that matter"

It seems to me that the critical questlon in thls

case 1s the appropriateness of the course taken by Mr Bannon,
and thls 1s a matter which is ralsed by para.(b) of the
grounds of appeal. However, before passlng to that matter, I

will comment briefly upon the other two grounds.

As to the first matter, namely the suggestion that

there is no evidence of 40 per cent incapacity, it seems to me

that this is not an independent valid criticism of the	=
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Tribunal's decision. If, for the moment, it be supposed @at

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~t was a proper and legitimate step for Mr Bannon, in the5
process of deciding the application before hlm, to determine a
degree of incapacity, his declsion would not be vltlated
simply because no witness expressed a view that 40 per cent
was the appropriate flgure.

In fact, only one witness offered an opinion

regarding a percentage of dlsabillty. This was Dr Kerridge,
who gave medlcal evidence lylng between the extremes to whlch
I have referred. During the course of Dr Kerridge's evidence,
Nr Bannon hlmself raised with the witness the possiblllty of
puttlng a percentage against the partlal Incapacity which Dr

Kerridge thought mr Angel to suffer. Dr Kerrldge replled:

"As far as the back is concerned, there is no
real table for thls as I am sure you reallse,

but the Workers Compensation Board are

attempting to put together a table where they

suggest that a very bad backache would be
about 30 per cent of total body. Now, the
Americans seem to have that flgure about
rlght, too. Whether you agree wlth it or not,
that is about the figure they have come to.
Using that scale, I would say his would be
about 15."

Dr Kerrldge went on to make a comment in which he described what he had sald as belng a "guesstimate", and sald: "we are all groping in the dark".

I do not think that this evidence directly expresses a percentage of dlsablllty for work. Rather it seems to me

that Dr Kerrldge was reporting to the Tribunal that, looking	j
at total body function, a person suffering a bad back ac&	-

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would be taken to have lost about 30 per cent of that
functlon, and that, in the present case, he would treat mr
Angel as having sustained about half of that loss. How thls
relates to incapacity for work 1s not at all clear, and I do
not thlnk that Dr Kerrldge was really suggesting that it dld.

In the result, there was no evidence before the

Tribunal as to the applicant's degree of incapacity for work, expressed in percentage terms. Notwlthstandlng this, the Tribunal had the benefit, not only of the evidence of a number of medical witnesses who expressed varying opinions about the extent of incapacity, giving reasons for their opinions, but also of the evidence of the applicant and of a prlvate lnqulry agent who had observed hlm at work.

I thlnk that it was open to the Tribunal to express

the view that Mr Angel was not totally incapacitated for work,

but, nonetheless, was partially incapacitated; and that, in

an attempt to give some guidance as to the position between a
mlnute degree of incapacity and an almost total incapacity,

the Tribunal was entitled to say that the appropriate degree

of incapacity was about 40 per cent. I regard thls as a

conclusion based upon the totallty of the evidence rather than
something which is selected from the evldence of a particular
witness. As I have said, these comments are made upon the
basis that the fixrng of a degree of lncapaclty is a releGnt

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exercise for the purpose of this type of case, a questlon30 3

which I will return.

As to the matter raised by para.(c) of the grounds of appeal, I thlnk that there is a questlon whether Mr Bannon was intending to find as a fact that employers are not generous,

or whether he was slmply explaining why he had selected 40 per
cent rather than some sllghtly lesser percentage. Upon my
readlng of the relevant paragraph in hls decision, in its
context, I understand Mr Bannon to be saying that it is not
posslble to be completely precise as to the extent of
continuing incapacity but that he thought that a flgure of 40
per cent was the maximum amount which ought to be found. He
went on to explain why he has taken the maximum amount, which
he describes as possibly belng "a trifle generous", by saylng
that employers are not generous once they know that a person
has an injury. In other words, I thlnk he is saying that he
gave to the applicant the beneflt of the doubt, and he did
this because he knows that ln practlce employers tend to take
a fairly hard line once they become aware that a person
seeking employment, or perhaps already in employment, has an
inlury. I thlnk that this is merely an observation based on
Nr Bannonfs general experience of life and of human nature and
that it is not lntended as a finding of fact supported by

evidence. However, counsel for Mr Angel points out that, in

thls case, there is, in fact, evidence from Mr Angel that he
applled for a job wlth the local council, that he was tol-4 - .

that he-would need to have a medical examination but, fir&, - 7

that he had to £111 out a form setting out hls medical
hlstory. In so doing, he revealed hls prevlous compensation
payments, and he was then told not to bother golng for the

medical; that the council did not want hlm. Dr Kerrldge also

offered some observations, based on h ~ s experience as an

orthopaedic surgeon, of the attltude of employers.

Accordingly, if some speclfic material was needed in order to

justify Mr Bannon1s comment, it is here present.

As I have said, the real question in the case is the approprlateness of the Trlbunal simply flndlng an incapacity to the extent of 40 per cent and then referring the matter

back to the Commlssloner for determination in the light of
that finding. Section 43 of the Administrative Appeals
Trlbunal Act contemplates that the Tribunal may take a course
falllng short of the ultimate disposal, by itself, of the
matter which gave rlse to the application for revlew. Section
43(l)(c)(li) authorises the Tribunal to make a declsion in
wrlting, settlng aslde the declsion under review and rernittlng

the matter for reconslderation in accordance with any

directions or recommendations of the Trlbunal.

The apparent lntentlon of Mr Bannon was that his

order would operate to set aside the decision of the

Commissioner for Commonwealth Employees' Compensation thag -

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there was no disability and that it would further operate30

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require Mr Angel's clalm for compensation to be reconsidered

by the Commissioner in accordance with the Tribunal's

determination that Mr Angel suffered a 40 per cent degree

Incapacity for work. The fact that the conclusion as to 40

per cent was included as a speclflc determlnat~on in the

formal declsion indicates that thls was not merely a factual finding, stlll less a passlng comment. It was intended as a binding determinatlon, it being the lntentlon of Mr Bannon

that the Commissioner should approach his further task upon

the basis of that determination.

The difficulty which I flnd with this course is in

relating it to the provisions of s.46 of the Compensation
(Commonwealth Government Employees) Act. Sectlon 46

relevantly provides:

"46. (1) Where an injury to an employee results

In the employee being partially incapacitated for
work, the succeeding provisions of this section

have effect.

(2) Sublect to this sectlon, compensation is

payable to the employee, during the period of the

incapacity, of an amount per week equal to--

(a) the lesser of the following amounts, namely--

(1) $90 or such higher amount as is

prescribed; or

(11) the amount (lf any) by whlch the

average weekly earnlngs of the
employee before the inlury exceeds

from tlme to time the amount per

week that he is able to earn in some	-
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suitable employment or busines; or	-
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.	(b) the amount (if any) by whlch the amount	<
per week that would be payable to him	T
under the last preceding section, disregarding sub-sections (2A) and (7) of that section, if he were totally incapacitated for work exceeds from tlme to time the amount per week that he is able to earn in some sultable employment or buslness,

whichever is the greater."

The section goes on to speclfy, amongst other things, the way in which the amount per week that an employee is able to earn shall be calculated: see sub-ss.(4) and (4A).

It will be noted that s.46(2) makes no reference to

the matter of degree of incapacity of work. Rather, para.(a)
of that sub-section requires the making of a comparison
between a specific money sum -- originally $90 but slnce
adjusted for inflation and which is apparently kept at the
amount of the total disability payment -- and the amount, lf
any, by which the average weekly earnings of the employee
before the injury exceeds from time to tlme the amount that he
is able to earn in some suitable employment or business.

Although the flrst of the ltems in sub-para.(ii), namely, average weekly earnlngs of the employee before the injury, might posslbly be regarded as requlrlng reference to

the amount in dollars actually last earned by the employee

before injury, I am told that this provision has been

construed so as to refer to the average weekly earnlngs o& an -

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employee in that particular occupation from time to time.? In

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other words, the figure is updated for inflation, thus
allowlng a sensible comparison with the second item, which
requires reference to the amount able to be earned from time
to time in a sultable alternative employment or business. ~f
there is a difference between these two amounts, then that
amount is payable by way of compensation.

The problem about a findlng of 40 per cent, and no

more, is that it is not at all clear how the Cornmissloner
would use thls finding in the exerclse required by para.(a) of
s.46(2) or, indeed, if it was necessary to go to it, para.(b)
of that sub-section. In the context in which the flndlng was
made, it seems to me that Mr Bannon was saying that the
applicant had lost about 40 per cent of hls fitness for the
work of a cook; In other words, that his physical efflclency

had been reduced by that percentage.

Perhaps thls understanding 1s wrong, but it is my

best lnterpretatlon of what was intended. The questlon then
1s what results from that piece of information. Does this
mean that, notwithstanding that loss of percentage, Mr Angel
should be regarded as capable of obtaining and retaining a lob
as a cook? In some cases one could lose a percentage, perhaps
even a large percentage, of one's physical fltness to carry
out a particular job and yet retain that employment. Thls is

most obviously the case in the types of work where physiz-a1

fitness is less important than experience or mental acui& or

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learning. In other cases, a loss even of a small percen<age
of one's physical fitness may mean total unemployability. No
findlng has been made to asslst the Commlssloner to make that
assessment in the present case.

As counsel for the Commonwealth submits, the flndlng

which has been made is capable as belng interpreted in any one
of at least three ways; namely, that Mr Angel can perform 60
per cent of the work of a cook; that he can perform the work
of a cook for 60 per cent of a normal worklng week, or that he
can do some unspecified job in which he would earn 60 per cent
of the wages of a cook. In practical terms, the loss suffered
by Nr Angel is likely to vary considerably according to whlch
of these various Interpretations is adopted.

Counsel for Mr Angel does not defend the finding of

40 per cent as a necessary step in the decision-making

process. She says that the determlnation is not binding on

the Commlssloner, and she describes the determlnation as being

"to some extent a red herring". I think that these

observations are correct, but they lndlcate to my mind that,

in approaching the matter in this way, the learned Deputy

President misdirected himself as to the course whlch ought to

be taken. I have some sympathy for the posltion in whlch he

was placed. The Deputy President would be used to cases,>or -

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example,claims for invalid pensions, in whlch the fixlng & a

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percentage disablllty is a necessary part of the
decision-making process and, in the present case, the Trlbunal

was not asslsted by the fact that both the parties took
extreme positions, each of which was found to be unwarranted

On the one hand the applicant clalrned to be almost totally

unflt for work. He sald that, despite hls best endeavours, he

had not been able to obtain any continuing work. On the other hand the Commonwealth took the position that the applicant was fully able to work as a cook. Having rejected both of the

extreme positions, Mr Bannon was left with little material
upon which he could determine the remuneration whlch Mr Angel

is capable of earning in some suitable employment or business.

Notwithstanding these matters, I do not thlnk that

the finding of 4 0 per cent was a relevant findlng, and I think
that it would only serve to confuse the sltuatlon if the
Tribunal's decision is allowed to stand. whatever the
concessions made by counsel for Mr Angel, the Commissioner is
llkely to take the view, and I think properly so, that a
finding which is included as a formal determination in a
decision of the Trlbunal cannot be ignored. If the
determination of 4 0 per cent is allowed to stand, the
Commissioner is likely to try to make an assessment by
reference to that findlng, and thus proceed on an Incorrect

basis. Accordingly, the Court should interfere to set aslde

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the finding of 4 0 per cent.	- 5	-
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-The next question is what is the appropriate course

to be taken. It is obvious that there has to be some further
consideration of Mr Angel's clalm. I could slmply set aside
para.2 of the decision; but this would mean that the matter
would return to the Commissloner wlthout any real assistance
having been provided to him by the review before the Tribunal.
This would be unfortunate. It would serve to prolong the
further determination of the matter and posslbly give rise to
a further application for review before the Tribunal, perhaps
before a different member, so that much of the old evldence
would have to be resubmitted. I do not think that this is a

desirable course to take. In my vlew, it would be preferable

for the Trlbunal itself to address the questions raised by
s.46(2), no doubt after having had the benefit of such further
evidence as the parties are able to put before it as to the
amount which Mr Angel would be earning at the present time, if
he were still employed as a cook in the Navy, and as to the
amount which he is able to earn in a sultable alternative

employment or business.

It is for the Tribunal to determine whether it is

prepared to recelve additional evldence, and, if so, whether

lt is prepared to make a findlng upon the matter whlch I have

mentioned; but I think that it would be appropriate for me to

remlt the matter to the Tribunal so that, at least, it may

consider	- these questions. Accordingly, the order which 1Gake	-
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1s as follows: I order that the decision of the i -

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Administrative Appeals Tribunal glven on 15 November 1988 be set aside and that the matter be remltted to the Trlbunal to be heard and declded agaln wlth such further evldence as the Tribunal shall allow.

In settlng aslde the Tribunal's order, I have also

set aside the order for costs whlch was made by the Tribunal.
I do this, not because any attack has been made upon that
order or because of any view that the order 1s inappropriate;
but, rather, in antlclpation that the Trlbunal will deal wlth
the matter of costs of the whole of the.proceedings, Including
the further proceedings which are ordered by thls Court, in
one order flnally disposing of all questions as to costs.

So far as the costs of this proceeding is concerned,

the Notlce of Appeal seeks costs; but counsel for the
Commonwealth Informs me that the Commonwealth does not wlsh to
put any submissions in regard to costs and 1s content to leave
the appropriateness of such an order to the Court. It is true
that the Commonwealth has succeeded in thls Court, desplte the
contrary submission of counsel for the applicant. However,
the error is one whlch arose because of the way in whlch the
Trlbunal dealt with the matter rather than because the
Tribunal upheld a posltlon taken before the Trlbunal by the

present respondent. Havlng regard to that fact and also?the	-
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comparative pos~tlons of the parties, I think that the 2

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appropriate course is that I make no order as to the costs of
the proceeding in this Court. Consequently, the only order

that I make 1s as set out above.

I certify this and the flfteen (15)
preceding pages to be a true copy of
the Reasons for Judgment of

hls Honour Justlce Wilcox.

Associate:

Date:	8 June 1989
Counsel for the Applicant:	MS R M Henderson
Solicitors for the Applicant:	Australian Government Solicitor
Counsel for the Respondent:	MS H G Murrell
Sollcltors for the Respondent:	Legal Aid Commission of New South Wales
Date(s) of hearlng:	15 May 1989