Commonwealth of Australia v Twyman

[1985] FCA 647

Re: COMMONWEALTH OF AUSTRALIA
And: RONALD HENRY TWYMAN
No. VG88 of 1985
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Keely J.

CATCHWORDS

Administrative Law - appeal from Administrative Appeals Tribunal - Compensation (Commonwealth Government Employees) Act 1971 - disctinction between Tribunal's decision and its reasons for decision - whether on the evidence Tribunal could find total incapacity - Tribunal's duty to decide without presumption as to correctness of earlier finding by Department of Social Security as to incapacity - failure of Tribunal to either make a decision in substitution or remit the matter for reconsideration - refusal to grant costs certificate to unsuccessful respondent under Federal Proceedings (costs) Act 1981.

Administrative Appeals Tribunal Act 1975 ss. 43, 44

Compensation (Commonwealth Government Employees) Act 1971 ss. 45, 46, 63

Federal Proceedings (costs) Act 1981 s. 6

HEARING

MELBOURNE
#DATE 23:12:1985

JUDGE1

This is an appeal by the Commonwealth of Australia from a decision of the Administrative Appeals Tribunal (the Tribunal) given on 14 March 1985. The relevant part of that decision was as follows:

"Decision

....

1. The Tribunal affirms the determination contained in paragraph (a) of the decision under review.

2. The Tribunal sets aside the determination contained in paragraph (b) of the decision under review.

.... "

1. The Tribunal stated in its reasons for decision that the determination under review before the Tribunal was undated; however, as the opening paragraph of the Tribunal's reasons for decision referred to it as a determination "made on 26 May, 1983", it is convenient to identify it by that date in these reasons. The determination was made by a Delegate (the Delegate) of the Commissioner for Employees' Compensation under the Compensation (Commonwealth Government Employees) Act 1971 as amended (the Act). Its terms were as follows:-
   
   

"Compensation (Commonwealth Government Employees) Act 1971

Ronald Henry Twyman - formerly Rigger's Assistant Department of Defence Support

In the matter of the claim of Ronald Henry Twyman for compensation in respect of back injury.

Determination

In pursuance of the provisions of the Compensation (Commonwealth Government Employees) Act 1971, and further to the determinations previously made in this matter, I hereby determine:

(a) the determination of 20 March 1981 is revoked;

(b) from a date not later than the date of this determination the said Ronald Henry Twyman has been able to earn in some suitable employment or business a weekly amount not less than his average weekly earnings before the injury, as since varied, and the Department of Defence Support is therefore not liable from the date of this determination to make weekly payments of compensation under section 45 or section 46 of the said Act, to the said Ronald Henry Twyman in respect of the personal injury arising out of or in the course of his employment on 6 June 1977.

Sgd. (indecipherable)

Delegate of the Commissioner for Employees' Compensation"

1. There was no appeal against paragraph 1. of the Tribunal's decision (which affirmed paragraph (a) of the Delegate's determination). The appeal is against paragraph 2., which set aside paragraph (b) of the Delegate's determination. The notice of appeal also stated that the appellant appealed against the Tribunal's decision:-
   
   

"(b) That the Respondent was totally incapacitated for work;

(c) That the Respondent had been totally incapacitated for work since 3rd May, 1978."

However in my opinion the Tribunal's decision, which must be distinguished from its reasons for decision (which are contained in a separate document from its reasons for decision), did not formally decide either of the matters in (b) and (c) above. It may be that the Tribunal intended to decide those two matters because it made such findings in the last sentence of paragraph 31 and in paragraph 34 of its reasons for decision. Those passages may be compared with paragraph 3 of the reasons for decision, where the Tribunal stated the issues in a way that did not include the matters in (b) and (c) above. It said:-

"3. It will be seen that there are effectively two issues before the Tribunal. The first issue is whether Mr. Twyman has been, since a date not later than the date of the determination under review, able to earn in some suitable employment or business a weekly amount not less than his average weekly earnings before the injury, so that the Department of Defence Support is not, since that date, liable to make weekly payments of compensation to him in respect of the injury sustained by him on 6 June, 1977. The second issue is whether, if he was, on 20 March, 1981, entitled to weekly payments of compensation, that entitlement should have been redeemed."

1. Despite that statement of the issues, in my opinion it is clear that paragraph 2 of the decision was based upon a finding (paragraph 31) that Mr Twyman "is totally incapacitated for work by reason of his back condition". It was common ground between the parties that, if it was open to the Tribunal to find that the employee was totally incapacitated, and if the Tribunal had so decided, as distinct from referring to it in its reasons for decision, the amount of compensation payable to him in respect of such period of incapacity, under s.45 of the Act, could not be reduced by reason of the fact that he had been receiving certain wages as an employee.

2. The Tribunal's finding that Mr Twyman was totally incapacitated, in my opinion was a finding which, as a matter of law, was not open to the Tribunal on the evidence. The Tribunal referred to a "summary of earnings lodged by Mr Twyman" which "showed that from October, 1979, to November, 1984, he had earned of the order of $50 per week except for" three specified periods totalling approximately 17 months. The last of those three periods was from May to August 1983, i.e., it ended fifteen months before the hearing before the Tribunal in November 1984. That was a finding by the Tribunal that Mr Twyman earned approximately $50 per week for the fifteen months preceding November 1984. In addition the Tribunal found that he was paid $240 for 57 hours work over 4 weeks in October - November 1984. The Tribunal also found that there were "periods when he was earning as much as $200 per week".

3. Mr Lenczner, of counsel, on behalf of the appellant, submitted that, in the light of those findings, the Tribunal erred in law in finding that he was totally incapacitated for work. Mr Gunst, of counsel, on behalf of the employee respondent to the appeal, in a particularly well prepared and persuasively presented address, submitted that the work done by Mr Twyman did not prevent a finding by the Tribunal that he was totally incapacitated. In a careful analysis of the transcript in the appeal book of the evidence before the Tribunal, he contended that the work done was:-
   
   

1. only done for friends

2. only performed on a part-time basis

3. only done in warmer weather

1. In the course of this submission Mr Gunst gave a hypothetical example of a young man who, as a result of an accident causing brain damage, had no capacity for concentration or for any manual task save for a small amount of "pottering here and there". He submitted that, if that man's parents were to pay to him, as an allowance, the sum of $50 per week in return for certain very minor services rendered to them by their son, a Tribunal would not be prohibited, as a matter of law, from making a finding that the son was totally incapacitated. In considering that hypothetical example, it is relatively easy to accept that a small weekly sum, paid by parents as an allowance, but said to be payment for some small services, would not prevent such a finding. Doubtless the tribunal or court hearing the case would have to consider whether the payment was, on the one hand, a payment for work performed by the son and accordingly was in reality earned by him as an employee or, on the other hand, the payment was made simply as a manifestation of parental love, perhaps with a desire to raise the son's confidence, thereby seeking to prevent the development, or aggravation, of psychological problems.

2. Mr Gunst gave another hypothetical example of a man who, against the express advice of his treating doctor, continued to work for six months and as a result died. Such a man might well be described as dedicated and conscientious. However, as a matter of law, a man who worked full hours for six months at full wages plainly could not be described as totally incapacitated - even though he could have been properly so described if, following his doctor's advice to do no work, he had refused to work. A decision that the man who worked, against his doctor's advice, was not totally incapacitated would merely reflect the words posed in the question - was the employee totally incapacitated during particular periods. In my opinion that question can not be answered in the affirmative when dealing with a man who, in the second hypothetical example, in fact worked for six months at full pay; that result is not inconsistent with the opinion that, if he had been advised by his doctor to do no work at all and in accordance with that advice had performed no work, then he could properly have been described as being totally incapacitated (assuming that the doctor's advice was accepted by the Tribunal as being proper advice).

3. However, the facts relating to Mr Twyman were very different from the injured son receiving an allowance. On the evidence, the amounts of money which the Tribunal found to have been paid to him:-
   
   

(a) were paid by employers who were not his parents and were not persons who stood in some special relationship to him, although the Tribunal said "it is to be noted that most of the work he has done has been work obtained from a friend, not in the open employment market". However his earnings included $60 per week from Massfield Manufacturing for 4 weeks work in October - November 1984 and the evidence at the Tribunal hearing was apparently concluded on 20 November 1984. Mr Gunst conceded that Massfield Manufacturing was not in the category of a friend or a company associated with a friend.

(b) were substantial amounts, being at times of the order of $200 per week.

(c) were paid throughout a very substantial period of time. It is not as if the payments had only been for such a short time that the work could be treated by the Tribunal as being no more than an attempt to work.

(d) some of the work performed by him included physical activities described by the Tribunal as "involving welding, crawling, bending, building carport roofs, installing airconditioners and carrying heavy objects".

1. If the work performed by Mr Twyman had been so infrequent and so restricted as to the hours and days on which it was performed that, in reality, Mr Twyman was not being employed at all but was being given money by a friend as an act of charity, under the guise of employing him, it would, of course, have been open to the Tribunal to find that he was totally incapacitated. However, on the findings of the Tribunal, in my opinion that is not the case here.

2. For the reasons given, in my opinion the Tribunal erred in law in finding that Mr Twyman was totally incapacitated.

3. In my opinion the Tribunal attached some weight to the "finding by the Secretary to the Department of Social Security that he is incapacitated for work" (paragraph 31 of its reasons for decision). I accept Mr Lenczner's submission that, although the Tribunal is not bound by the rules of evidence, it erred in law in so doing. The Tribunal's duty was to form its own view on the merits of the case without any presumption as to the correctness of a finding by the Social Security Department that Mr Twyman was incapacitated for work. The attaching of weight to such a "finding" is very difficult to reconcile with the Tribunal's expressed opinion that Mr Twyman had been untruthful in his evidence before the Tribunal (paragraph 10), had been "not entirely honest in the histories he gave to the various medical practitioners" (paragraph 31) and had made "incorrect" statements in three compensation review forms in respect of which statements his answers in cross-examination "were unsatisfactory and evasive" (paragraph 11).

4. On the question of the Tribunal's duty to form its own view, without any presumption, assistance is gained from the decision of Fox, Deane and Morling JJ. in Collins v Minister for Immigration and Ethnic Affairs (1981) 36 ALR 598 at 602-3 although it is not directly in point; that decision would have had direct relevance had the Tribunal attached weight to the decision, adverse to Mr Twyman, given by the Delegate.

5. I also accept Mr Lenczner's submission that the Tribunal erred in law in that, having set aside the determination of the Delegate in paragraph (b), it failed to comply with s.43(1)(c) of the Administrative Appeals Tribunal Act 1975 by either:-
   
   

"(i) making a decision in substitution for the decision so set aside; or

(ii) remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal."

1. Accordingly, errors of law having been shown, the whole of the decision of the Tribunal (including the decision as to costs), given on 14 March 1985, is set aside and an order is made remitting the case to be heard and decided again, either with or without the hearing of further evidence by the Tribunal, a matter to be decided by the Tribunal.

2. The appellant did not seek an order for costs. Mr Gunst, on behalf of the respondent, Mr Twyman, submitted that, if the court remitted the matter to the Tribunal, a certificate should be granted under the Federal Proceedings (Costs) Act 1981 in respect of the costs incurred by the respondent in relation to the appeal.

3. In Bullock and others v Federated Furnishing Trades Society of Australasia and others (No 2) (1985) 58 ALR 373, Smithers, Sweeney and Woodward JJ., refused to grant a costs certificate to the respondents, who had succeeded before the trial judge but had been the unsuccessful respondents to an appeal. Their Honours said (at 374):-
   
   

" In our view the discretion of the court is unfettered, once the respondent shows that the grant of a certificate is within the power of the court, though it must of course be exercised judicially and on proper grounds.

The respondents have argued that there is a presumption in favour of the grant of a certificate once the prerequisites are satisfied. It was said that a certificate should only be refused if the respondents have been in some way responsible for the error of the court below - by failing, perhaps, to draw attention to a relevant statute or the over-ruling of an apparently binding precedent - or the request is for some other reason unmeritorious.

In our view there is no such presumption. The unsuccessful respondent must satisfy the court (or a member of it sitting in Chambers - see s 12) that it is appropriate in all the circumstances for a certificate to be granted, and the circumstances which could properly influence that decision are many and various. One matter to be borne in mind in all cases is that it is the taxpayer who is being asked to bear the cost, up to a maximum of $3000 in this court, of the error of law which has occurred. This fact may produce a different emphasis in decisions under this Act from those reached in jurisdictions where the payments are made from a special fund which is automatically contributed to by all litigants through their payment of court fees.

However, the basic principles to be applied in the exercise of discretion will not vary on this account and we are confirmed in the view we take by the judgment of the Full Court of the Supreme Court of Western Australia in Richards v Faulls Pty Ltd

(1971) WAR 129 at 137-8. In construing similar legislation the court said:-

"The question is whether the power which is conferred upon the court should be exercised. It is a discretionary power and the grant of the certificate follows upon and requires the exercise of the discretion. Hence it is a discretion to grant; it is not a discretion to refuse. Hence it is not the position, adapting to this case the words of the joint judgment of Latham CJ, Rich and Dixon JJ in Main v Main (1949) 78 CLR 636 at 643, that once facts are proved bringing the case within s 10(1) a certificate should be granted unless the court thinks on discretionary grounds that the certificate should be withheld; on the contrary, the unsuccessful respondent to an appeal must show some ground calling for the exercise of the discretion in his favour and he does not do this merely by showing that the appeal has succeeded on a question of law: Reeve v Fowler (1965) NSWR 110, per Walsh J at p 111.""

1. Notwithstanding my conclusion as to errors of law by the Tribunal, the respondent in my opinion has failed to "show some ground calling for the exercise of the discretion in his favour and he does not do this merely by showing that the appeal has succeeded on a question of law".

2. In addition, there is a reason against exercising the discretion in favour of the respondent. I adopt, with respect, the statement by the Full Court in Bullock's case (supra at 374) that "One matter to be borne in mind in all cases is that it is the taxpayer who is being asked to bear the cost". The Tribunal said (paragraph 10) that he "was not a satisfactory witness" and referred to his false denial that he had worked and his equally false statement (in qualifying his earlier denial) that "he had not worked for pay"; the falsity of both statements was later admitted. The Tribunal also found (paragraph 31), on the evidence before it, that "Mr Twyman was not entirely honest in the histories he gave to the various medical practitioners who examined him from time to time". It is true that, notwithstanding those matters, the Tribunal ordered the employer to pay Mr Twyman's costs but that was an order against a party, made in the light of established principles as to successful litigants. The present application is in a different category and in my opinion the applicant's conduct before the Tribunal is relevant to the exercise of the discretion to decide whether "the taxpayer should be asked to subsidize the legal costs of litigants" (Bullock's case - supra p. 376).

3. The application for a certificate as to costs is refused.