Kovac and Military Rehabilitation and Compensation Commission

[2004] AATA 1290

Administrative

Appeals

Tribunal

 

 

DECISION AND REASONS FOR DECISION [2004] AATA 1290

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2003/134

GENERAL ADMINISTRATIVE DIVISION

Re:         ALEKSANDER KOVAC

Applicant

And:       MILITARY REHABILITATION AND

COMPENSATION COMMISSION

Respondent

DECISION

Tribunal:       G.D. Friedman, Member

Date:3 December 2004

Place:Melbourne

Decision:The Tribunal sets aside the decision under review and substitutes a decision reinstating the applicant’s entitlements to compensation benefits from 15 August 2002.  The respondent is to pay the applicant’s costs.   

(sgd) G.D. Friedman

Member

COMPENSATION - lower back pain - rehabilitation program - voluntary work - suspension of entitlements - whether failure or refusal to undertake program - program devised without proper delegation - whether reviewable

Safety, Rehabilitation and Compensation Act 1988 ss 4, 36, 37, 37(7), 38, 41, 41A(2)

Collector of Customs, New South Wales v Brian Lawlor Automotive Pty Ltd

(1979) 2 ALD 307

Pascoe v Australian Postal Corporation [2004] FCAFC 4

Re Parsons and Telstra Corporation Limited [2003] AATA 224

Re Wilkinson and Australian Postal Corporation [1998] AATA 849

Secretary, Department of Social Security v Alvaro (1994) 50 FCR 213

Woodbridge v Comcare (1994) 20 AAR 196

REASONS FOR DECISION

3 December 2004  G.D. Friedman, Member

1.      This is an application by Aleksander Kovac (the applicant) for review of a decision of a delegate of the Military Rehabilitation and Compensation Commission (the respondent) dated 26 September 2002. The delegate affirmed a determination of the respondent dated 14 August 2002 to suspend the applicant’s entitlement to compensation benefits on the grounds that he had refused or failed to undertake a rehabilitation program.

2.      At the hearing of this matter on 15 July 2004 and 26 October 2004 Mr N. Horner of counsel represented the applicant and Mr J. Lenczner of counsel represented the respondent.

3.      The Tribunal received into evidence the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T1-T50), plus two exhibits (Exhibits A1‑A2) lodged by the applicant and seven exhibits (Exhibit R1-R7) lodged by the respondent.

BACKGROUND

4.      The applicant was born on 15 August 1980 in Germany, and came to Australia with his parents in 1981.  After completing Year 10 he left school and commenced work as a painter in a factory.  He then worked as an apprentice in his father’s motor mechanic business before enlisting in the Australian Army (the army) on 17 February 1998.  He trained in the Signals Corps at Watsonia in Melbourne and spent 12 months in Toowoomba in Queensland.

5.      On 22 April 1999, during a field training exercise, he developed sudden low back pain, which has fluctuated with intermittent severity.  On 6 April 2000 the respondent accepted liability for aggravation of discogenic low back pain from 22 April 1999, and the applicant was medically discharged from the army on 26 March 2000.  In May 2000 the applicant was referred to The Victorian Rehabilitation Centre for rehabilitation. An Original Rehabilitation Plan dated 12 September 2000 recommended attendance at a four-week chronic pain program, which the applicant attended in October/November 2000.

6.      On 2 January 2001 the applicant claimed lump sum compensation for permanent impairment.  On 4 January 2001 a delegate of the Military Compensation and Rehabilitation Service at the Department of Veterans’ Affairs deferred a decision until all reasonable treatment had been completed or his condition had stabilised.  On 20 April 2001 the respondent determined that the applicant may not undertake a Rehabilitation Program under Section 37 of the SRC Act 1988.  In a further determination dated 3 May 2001 the respondent extended liability for the claim aggravation of discogenic back pain to include temporary reactive depression.  On 25 May 2001 the delegate referred the applicant to a rehabilitation provider for assessment of capability to undertake a Rehab program and, if appropriate, development of a RTW [return to work] Plan.

7.      On 5 June 2001 a report was prepared by RTW Management (RTW), and a progress report dated 4 October 2001 noted that the applicant met a rehabilitation consultant on 25 September 2001 to develop a return to work plan, which provided for the applicant to conduct research on courses to train as a private investigator.

8.      After reviewing the situation, on 9 July 2002 the delegate determined to defer a decision on the claim for lump sum compensation for permanent impairment until such time as you have undertaken all reasonable rehabilitative treatment.  In a report dated 30 July 2002 the applicant’s rehabilitative consultant referred to the difficulty of implementing a graduated return to work program with a new employer, and suggested that the applicant commence such a program involving voluntary work to obtain a clearer indication of his fitness for full-time or part-time duties.  The consultant noted that the applicant reported that he did not wish to be involved in voluntary work. 

9. In a determination dated 14 August 2002 under s 37(7) of the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) the delegate of the respondent suspended the applicant’s right to compensation or to institute or continue proceedings. On 17 September 2002 the applicant requested a re‑consideration of the decision. On 26 September 2002 the respondent wrote to the applicant informing him of the reasons for the suspension, but stated that the outcome of the internal review did not constitute a reviewable decision under the SRC Act. On 4 February 2003 the applicant lodged an application with the Tribunal for review of the decision of 14 August 2002.

10.     The issues before the Tribunal are whether the Tribunal can review the determination because the original rehabilitation program was drawn up without the appropriate delegation, and whether the applicant’s attitude towards voluntary work constitutes refusal or failure to undertake the program.

EVIDENCE

11.     The applicant gave oral evidence that on the day of the injury he had been on patrol in a training exercise, and had dropped to the ground as part of the training.  He said that he experienced sudden, severe, low back pain, and was unable to continue the exercise.  He said that initially he was given a Panadol.  He sought medical advice, resulting in treatment such as anti-inflammatories, physiotherapy, hydrotherapy and stretching exercises.  The applicant told the Tribunal that his general practitioner diagnosed chronic low back pain, and he completed a four-week pain management program in late 2001, but he did not derive much benefit from the program.

12.     The applicant stated that on 25 September 2001 he attended a meeting with a rehabilitation consultant who had suggested job options such as a private investigator or other positions in the security industry.  He said that his treating specialist, Dr C. Thomas, agreed that private investigator work would be suitable because of his communications and intelligence training in the army.  The applicant explained that he obtained the support of his treating general practitioner, Dr J. Broderick, who suggested that this type of work offered flexible hours which would be appropriate in view of his back problems.

13.     The applicant stated that he became aware of a private investigator training course costing $3000.  He said that on 25 July 2002 he attended a meeting at Dr Broderick’s surgery (the July meeting), where a graduated return to work was discussed with Ms F. Casey, a rehabilitation consultant with RTW.  The applicant stated that there was no discussion of private investigator training, and no detailed consideration of the specifics of voluntary work.  He denied that he demonstrated any reluctance or refusal to undertake voluntary work at the meeting, and emphasised that the meeting ended without formal decisions.

14.     The applicant stated that when he was notified of the suspension of his entitlements he was extremely upset, as he was attending hydrotherapy, taking prescribed medication and consulting his doctor regularly.  He said that he was becoming depressed and had consulted a psychologist.  He revealed that for the past 15 months he has been working full-time as a tyre fitter.  He said that he walks whenever possible and continues to do his exercises.

15.     Under cross-examination, the applicant stated that he had done everything asked of him, and had felt intimidated by the attitude of rehabilitation consultants at meetings.  The applicant denied that he had indicated that he was not interested in pursuing voluntary work, but had stated that he would rather not do so.  He said that he felt that he was fit enough to undertake the private investigator course, but that the respondent refused to provide financial support.

16.     The applicant agreed that his brother arranged for him to work as a tyre fitter, and that his duties also involved sweeping, mending punctures, wheel balancing and alignment.  He said that he was careful not to lift heavy objects or bend his back.  He stated that he was able to cope with full-time work, and sought assistance when using equipment because of his back pain.

17.     In a written report dated 21 May 2003 Dr Broderick stated that the applicant has lumbar disc degenerative change with posterior bulge at L4/5.  Dr Broderick noted that the applicant is in constant pain and is markedly restricted in his ability to sustain work, and that he is persisting because he needs the money.  Dr Broderick predicted that the applicant would continue to have pain and restricted movement.

18.     Dr Broderick referred to the applicant’s depressive state and that the applicant’s belief that he is being frustrated in his attempt to retrain in an area that he believes is suitable for his condition now and into the foreseeable future.  He stated that he did not anticipate further deterioration, but said that re-injury was a distinct possibility.

19.     In oral evidence Dr Broderick said that he has treated the applicant for a number of years as his general practitioner, and sees him at least once a month.  He stated that the suspension of the compensation entitlements had been distressing for the applicant.  In respect of a return to work, Dr Broderick said that the applicant was enthusiastic about training as a private investigator, and was highly motivated.  Dr Broderick said the atmosphere was hostile at the July meeting, particularly as the applicant had stated that at that time he was not fit enough for full-time work, and Ms Casey had indicated that the respondent was unlikely to spend $3000 on the private investigator course if part-time work was envisaged.

20.     Dr Broderick told the Tribunal that the applicant was not capable of full-time work.  He said that he did not recall whether the possibility of voluntary work was discussed at the meeting.  In a written account of the meeting made at the time of the meeting (Exhibit R7) Dr Broderick stated:

…

Alex is agitated that he has to be pushed into full time work immediately.  He believes that he is not fit at this stage to do full time work at this stage.  Fran says that she is prepared to close his case if he is not in a position…

Fran says that $3000 is unlikely to be spent on part-time work…

Under cross-examination, Dr Broderick agreed that he had preferred a graduated return to work for the applicant, and that a potential employer was unlikely to agree to provide part-time work to determine whether the applicant was fit enough for full‑time work. 

21.     In a written report to RTW dated 22 March 2002 (T34) Dr Thomas said that he had examined the applicant and that the applicant had not pursued any form of re‑training of his own volition; so returning to work as a private detective would utilise at least some of his past experience.  Dr Thomas concluded:

…

The various options with respect to full-time employment all seem to be quite reasonable, given the nature of this man’s condition.

I think that he, with appropriate re-training, would be capable of returning to some form of meaningful work.  I would have thought that he would have the physical capacity to return to work as a private investigator and enquiry agent in surveillance or security work.  

Dr Thomas noted that the applicant would have difficulty sitting for longer than 60 minutes, walking for longer than 60 minutes, standing for longer than 30 minutes and driving a vehicle longer than one hour.

22.     In a written summary of the July meeting (T45) Ms F. Casey, occupational therapist, and Principal of RTW, said that the meeting took place at Dr Broderick’s surgery and was arranged to clarify the applicant’s fitness to commence re-training and job search activities.  She noted that the applicant was keen to complete a private investigator’s course, and in an email the applicant had stated:

I will seek employment when I am physically able to go back to work but with my condition I might not to go back to work full time ever again, that’s why I have chosen the field of private investigation because you can work as much or as little as you like and with my condition I think that is very suitable.  Initially I might only be able to work a couple of hours a day, but at this stage I am not physically able to do that due to my very slow progress at the gym and my current status.

Ms Casey said in her report that there was discussion of Dr Broderick’s view that the applicant was fit to complete a retraining course, but would need a graduated return to work program with a new employer to ascertain his level of fitness with regard to the number of hours he could work.  She noted that Dr Broderick recommended commencing at two hours per day for three days per week, with the goal of part‑time or full-time work.

23.     Ms Casey also said in her report that there was discussion of the difficulty of implementing a graduated return to work program with a new employer, and that she had suggested that the applicant commence such a program involving voluntary work to obtain a clearer indication of his fitness level for part‑time or full-time work.  Ms Casey referred to Dr Thomas’ conclusion that the applicant was fit to work as a private investigator.  In her recommendations Ms Casey stated that, as the applicant stated that he would not do voluntary work, a graduated return to work program was not possible.  She also said that the applicant believed that he was not fit to return to work.  She concluded that in view of these matters a suitable rehabilitation program for the applicant would be difficult to devise, and she recommended closure of the case.

24.     In oral evidence Ms Casey said that RTW assists employees to return to work after injury or illness by assessing their fitness for work and then devising an appropriate program.  She said that her firm was engaged to provide a plan for the applicant to return to work, and that she supervised Ms L. Hudson, psychologist, who had carriage of the matter prior to the July meeting.  Ms Casey told the Tribunal that she assumed responsibility for the matter because the question of the applicant’s fitness for work became an issue, so she decided that, with her background as an occupational therapist, she was best placed to manage the case. 

25.     Ms Casey stated that she met the applicant for the first time at the July meeting.  She explained that she raised the option of voluntary work (for example with a local council) as a means of determining his fitness, but that he had said he was not interested.  She said that in view of his response and his view that he was unfit for work, she concluded that she was unable to assist him.

26.     Under cross-examination, Ms Casey said that she did not recall saying that a private investigator’s course was too expensive.  She stated that she only referred to voluntary work as a means of gauging the applicant’s fitness to work.  Ms Casey denied that the applicant’s response was that he would rather not undertake voluntary work, and said that he definitely told her he was not going to do voluntary work.  She agreed that her report was written five days after the meeting, and she could not recall making notes at the meeting.  She denied that she was aggressive or authoritative, but agreed that the meeting became heated, which she attributed to the applicant’s frustration.

CONSIDERATION OF THE ISSUES

27. Section 37(7) of the SRC Act provides:

…

(7)          Where an employee refuses or fails, without reasonable excuse, to undertake a rehabilitation program provided for the employee under this section, the employee’s rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the employee begins to undertake the program.

In s 4 of the SRC Act rehabilitation program includes medical, dental, psychiatric and hospital services (whether on an in-patient or out-patient basis), physical training and exercise, physiotherapy, occupational therapy and vocational training.

28.     Section 41A of the Act provides:

(2)       A rehabilitation authority who is the Chief of the Defence Force may, in writing, delegate to an officer or employee of the Commonwealth all or any of the powers and functions of the rehabilitation authority under this Part.

29. Mr Horner submitted that the first rehabilitation plan dated 5 June 2001 (the plan) is the only rehabilitation plan that specifically refers to voluntary work, and was relied upon by the respondent to invoke s 37(7) of the SRC Act, to suspend the applicant’s compensation payments. He said that the plan pre-dates the introduction of s 41A(2) of the SRC Act, which commenced on 1 October 2001. Before the introduction of s 41A(2) the Chief of the Defence Staff had no power to delegate his powers and functions under s 36, s 37, s 38 and s 41 of the SRC Act. Mr Horner stated that in the absence of such a delegation the respondent did not have the power to make the rehabilitation plan, and therefore did not have the power to suspend the applicant’s entitlements under the SRC Act for not complying with the plan.

30.     Mr Horner submitted further that because there was no power to make the plan, there was no need for the Tribunal to assess the reasonableness of the excuse for the applicant for refusing or failing to undertake the program (Pascoe v Australian Postal Corporation [2004] FCAFC 4). He stated that the Tribunal, acting in the shoes of the decision-maker, cannot make the decision to suspend the applicant’s entitlements under s 37(7) of the SRC Act. He said that the decision under review was a nullity, although he said that the fact that a decision is a nullity does not necessarily prevent its review by the Tribunal.

31. On the merits of the case, Mr Horner submitted that under s 37(7) of the SRC Act the respondent had not demonstrated that the applicant had refused or failed to undertake a rehabilitation program. He said that the applicant had always been willing to work, as shown by his current full-time employment since April 2003, and that at the time of the July meeting he had expressed a willingness to re-train.

32.     With regard to the July meeting, Mr Horner submitted that the applicant was a credible witness who had acted reasonably at the meeting by indicating that he was not ready for full-time employment.  He said that the applicant’s version of the meeting should be preferred, as it was plausible and was supported by the evidence and contemporaneous notes of Dr Broderick.  Mr Horner submitted that Ms Casey’s evidence showed that any discussion of voluntary work was so vague as to be meaningless.  He added that Ms Casey was not impartial because she was the principal of the consulting firm with a vested interest in finalising the matter.  He also questioned the accuracy of her report and her recollection of the meeting.

33. Mr Horner stated that in a letter to the respondent dated 17 September 2002 (T48) the applicant’s solicitors noted that the applicant was prepared to engage in a private investigator’s course and in employment that was within his capacity, showing that the applicant was genuine in his desire to re-join the workforce. His solicitors went on to note that his attitude could not constitute a refusal or failure to undertake a rehabilitation program under s 37(7) of the SRC Act.

34.     Mr Lenczner acknowledged that, prior to the assessment of the applicant under the plan there was no evidence of a delegation of the power to make the plan.  However, he submitted that this was not relevant because the suspension of the rehabilitation plan, and not the plan itself, was the subject of review, and the applicant had not disputed the plan.  Mr Lenczner said that the applicant could not now raise the question of delegation after the plan, with its amendments, had been in operation for more than one year (Pascoe).  He said that a decision made without delegation may be reviewable where the decision was made in purported exercise of powers conferred by an enactment, even if the administrative decision was legally ineffective or void (Collector of Customs, New South Wales v Brian Lawlor Automotive Pty Ltd (1979) 2 ALD 307). Mr Lenczner submitted that, in any event, the amendments to the rehabilitation plans were each made with appropriate delegation, which validated any deficiency arising from a lack of delegation for the original plan.

35.     In respect of the nature of the rehabilitation program, Mr Lenczner referred to Re Wilkinson and Australian Postal Corporation [1998] AATA 849 in which the Tribunal concluded that the applicant had a reasonable excuse for refusing or failing to undertake the rehabilitation program because of a failure of the respondent to communicate properly with the applicant, and the shortcomings of the program. He submitted that in the present application there had been proper communication between the applicant and the respondent. He noted that in Re Parsons and Telstra Corporation Limited [2003] AATA 224 the Tribunal found (at para 51) that the applicant had already made up his mind that he was TPI and with the collusion of Dr Johnston had made up his mind that that he was not going to work again with Telstra.     

36. In respect of the merits of the current application, Mr Lenczner referred to the evidence from the applicant that he would rather not undertake voluntary work, and Dr Broderick’s evidence that he could not recall any discussion of voluntary work. Mr Lenczner submitted that the Tribunal should prefer the evidence from Ms Casey and the contents of her report. He said there was no plausible reason to suggest that Ms Casey would invent aspects of her report or do anything other than attempt to assess the applicant’s fitness for work, and that she was reasonable in seeking to assist him. Mr Lenczner referred to the applicant’s email, described above, in which the applicant stated that he was unable to work. Mr Lenczner said that given the applicant’s capacity to work, as described by Dr Broderick and Dr Thomas, the Tribunal should conclude that the applicant had the capacity to undertake voluntary work but was not prepared to do so. Mr Lenczner said that such refusal was unreasonable and constituted failure or refusal under s 37(7) of the SRC Act.

37.     Mr Lenczner noted that the plan, which was drawn up by the applicant’s Rehabilitation Counsellor/Co-ordinator and signed by the applicant, included Exploration of voluntary work to develop work skills.  He said that, accordingly, the applicant was aware that the plan contemplated consideration of this issue.  He submitted that the comments by the applicant’s solicitors on 17 September 2002, (T48) that the applicant was prepared to engage in employment which is within his capability, show that the applicant was capable of work and that such work could reasonably include voluntary work.  He also said that the comments that the applicant was prepared to engage in a private investigator’s course confirm his fitness for work.

38.     In reaching its decision, the Tribunal takes into account the written and oral evidence and submissions made at the hearing.

39.     There is no dispute that the original rehabilitation program was drawn up without an appropriate delegation, although such delegation was in place when the program was amended.  The Tribunal notes the decision in Brian Lawlor and in Woodbridge v Comcare (1994) 20 AAR 196 where the Federal Court followed Secretary, Department of Social Security v Alvaro (1994) 50 FCR 213 and held that the power to review conferred on the Tribunal is a power to review a decision in fact made, whether or not it was made with power. The Tribunal accepts the submission by Mr Lenczner that the suspension of the applicant’s entitlements is under review, rather than the rehabilitation program itself, and the applicant could have sought review of the program at an earlier stage, instead of challenging the amended program on the question of inadequate delegation. In spite of the lack of delegation of power to make the original program, the Tribunal finds that it has the power to review the decision to suspend the applicant’s entitlements.

40.     On the question of the merits of the application, the Tribunal takes into account that at the July meeting the only contemporaneous record was made by Dr Broderick.  The Tribunal accepts his evidence that the atmosphere was hostile, particularly as the applicant had indicated to Ms Casey that he was not fit enough to undertake full-time work.  As Dr Broderick’s notes do not contain any mention of voluntary work, and he said in oral evidence that he did not recall any discussion about voluntary work, the Tribunal finds that Dr Broderick’s version of events supports the applicant’s evidence that there was no detailed consideration of voluntary work at the meeting. 

41.     The Tribunal takes into account that the report of the July meeting prepared by Ms Casey was written five days after the meeting, and that she made no notes of the meeting.  In her report Ms Casey states that Mr Kovac reports that he does not wish to be involved in voluntary work, which is not necessarily consistent with her conclusion that Mr Kovac states he will not do voluntary work so a graduated program is not possible.  The Tribunal also takes into account that, as the principal of the rehabilitation provider, her interests were best served by the closure of the applicant’s file when he told her that he was not ready for full-time work.  For these reasons the Tribunal prefers the evidence by the applicant. The Tribunal finds that at the meeting the applicant indicated, during a brief mention of voluntary work, that he would rather not undertake such work.

42.     The Tribunal accepts that the applicant’s treating doctor preferred a graduated return to work and that Ms Casey pointed out the difficulty of implementing a gradual return to work program with a new employer.  Therefore, her suggestion to the applicant that he commence voluntary work as a means of establishing his fitness for part-time or full-time work was reasonable.  However, there is no material before the Tribunal to suggest that Ms Casey discussed other options with the applicant or explained the practicality and availability of voluntary work with him before making her recommendation to close the case.  The Tribunal finds that the indication by the applicant at the July meeting that he would rather not undertake voluntary work was incorrectly interpreted by Ms Casey as a refusal to undertake such work.

43. Therefore, the Tribunal finds that, under s 37(7) of the SRC Act, the applicant has not refused or failed, without reasonable excuse, to undertake a rehabilitation program provided for him, and his application succeeds.

DECISION

44.     The Tribunal sets aside the decision under review and substitutes a decision reinstating the applicant’s entitlements to compensation benefits from 15 August 2002.  The respondent is to pay the applicant’s costs.   

I certify that the forty-four [44] preceding paragraphs are a true copy of the reasons for the decision of:

G.D. Friedman, Member

(sgd)       Catherine Thomas

Clerk

Dates of hearing:  15 July 2004

26 October 2004

Date of decision:  3 December 2004

Counsel for applicant:                  Mr N. Horner
Solicitor for applicant:                  Arnold Thomas and Becker
Counsel for respondent:              Mr J. Lenczner
Solicitor for respondent:              Australian Government Solicitor