LJUBINKA PANTIC and Comcare
[2012] AATA 790
•13 November 2012
[2012] AATA 790
| Division | GENERAL ADMINISTRATIVE DIVISION |
| File Number(s) | 2009/4765 |
| Re | LJUBINKA PANTIC |
| APPLICANT | |
| And | Comcare |
| RESPONDENT |
Decision
| Tribunal | PROFESSOR RM CREYKE, SENIOR MEMBER |
| Date | 13 November 2012 |
| Place | Canberra |
The decision under review is affirmed.
..............................[sgd]..........................................
PROFESSOR RM CREYKE, SENIOR MEMBER
Catchwords
WORKERS’ COMPENSATION – permanent impairment sustained prior to 1988 – entitlement to lump sum compensation under Compensation (Commonwealth Government Employees) Act 1971 (Cth) (1971 Act) section 39(4) – weekly incapacity payments received between 1990 and 2004 under Safety, Rehabilitation and Compensation Act 1988 (Cth)(1988 Act) – whether precluded from entitlement to lump sum compensation under section 1971 Act 39(14)
Legislation
Compensation (Commonwealth Government Employees) Act 1971 (Cth) ss 5, 39, 45(9), 46(5)
Safety, Rehabilitation and Compensation Act 1988 (Cth) s 4, 24, 27, 124
Cases
Comcare v Bozicevic (1997) 144 ALR 132.
Comcare v Pantic (2012) 2023 FCR 83
Heath v Commonwealth (1982) 151 CLR 76
Hoyle v Telstra Corporation Ltd (1997) 75 FCR 390
Razmovski v Telstra Corporation Ltd (1997) 75 FCR 390
Re Gioia and Australian Telecommunications Commission (1988) 14 ALD 583
Schlenert v Australian and Overseas Telecommunications Corporation (1994) 121 ALR 67
REASONS FOR DECISION
PROFESSOR RM CREYKE, SENIOR MEMBER
DR BERNARD HUGHSON, MEMBER
9 November 2012
Mrs Ljubinka Pantic was a cleaner at the Royal Canberra Hospital. On 7 September 1985 she slipped on a floor at work, sustaining an injury to her right elbow. She returned to work in 1986, continuing for a time to work full-time but with periods off work until she accepted a redundancy on 23 November 1990.
Liability was accepted on 3 October 1985 under the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (1971 Act) for an ‘injury to the right elbow’. In 1997, the accepted condition was redefined as ‘pain in the right elbow (lateral epicondylitis) now resulting in chronic pain syndrome’. Mrs Pantic received incapacity payments for the condition under section 19 and 21 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (1988 Act) between 1990 and 2004.
On 6 September 2007, Mrs Pantic sought compensation for permanent impairment for the incapacity of her right arm under sections 24 and 27 of the 1988 Act. On 8 September 2008, Comcare rejected the application on the basis that the condition did not equate to at least 10 per cent under the relevant table in the Comcare Guide to the Assessment of the Degree of Permanent Impairment (2nd edn) (Guide). The rejection was on the basis of a medical report by Dr Macauley (rheumatologist) dated 14 August 2008, which expressed the opinion that the condition became permanent in 1989, that is, after the commencement of the 1988 Act. That decision was affirmed by Comcare on 23 December 2008.
On 1 October 2009, Mrs Pantic sought review by the Tribunal. On 23 May 2011, the Tribunal found that Mrs Pantic’s injury, on the basis of agreed facts, became permanent in 1987, that she was not precluded from receiving a lump sum payment under the 1988 Act, but the amount of such payment could be nil. The matter was remitted to Comcare to assess the compensation, if any, to which Mrs Pantic was entitled.
The matter was appealed by Comcare to the Federal Court which heard the appeal on 4 November 2011 and in a decision of 18 April 2012, upheld the appeal and remitted the matter to the Tribunal to be heard and decided according to law.
The matter was heard again by the Tribunal on 24 October 2012.
Background
At the Tribunal hearing on 12 April 2011, the parties agreed the following facts:
The applicant suffered an impairment that became permanent on or around 7 April 1987 (but certainly prior to 1 December 1988).
As at 6 September 2007, the applicant was unable to undertake work of any kind and therefore was totally incapacitated for work and this total incapacity was significantly contributed to by her compensable injury (with other factors such as age also significantly contributing to this total incapacity).
As at 23 November 1990 the applicant was not totally incapacitated for work.
The applicant suffered a loss of the use of her arm at or above her elbow of 10% as assessed in accordance with s 39 of the Compensation (Commonwealth Government Employees) Act 1971.
The parties have not resiled from that agreement as to the facts for the purposes of the current hearing of the Tribunal.
Mrs Pantic ceased work immediately after the injury on 7 September 1985 until 28 September 1985 and received incapacity payments as compensation for that period. Relying on medical certificates from her general practitioner, initially Dr Michael Smith, but principally, and from February 1990, Doctor George Guirguis or Doctor Sohair Guirguis, Mrs Pantic was also off work due to the accepted injury in the following periods:
13 January 1986 to 24 January 1986;
21 February 1990 to 22 February 1990;
13 March 1990 to 17 March 1990;
10 October 1990 to 23 October 1990;
26 October 1990 to 2 November 1990;
7 November 1990 to 16 November 1990;
17 November 1990 to 11 December 1990.
When the Royal Canberra Hospital was closed in 1989 Mrs Pantic’s position was transferred to Woden Hospital. In 1990, however, the cleaning services at Woden Hospital were privatised and Mrs Pantic was made redundant from 23 November 1990.
Subsequently Mrs Pantic was certified as unfit for work due to her accepted injury for the following periods:
12 December 1990 to 11 January 1992;
12 October 1992 to 11 October 1993;
12 July 1994 to 11 October 1994;
28 December 1995 to 11 April 1996;
12 July 1996 to 11 January 1997;
12 January1997 to 11April 1997;
12 July 1997 to 11 October 1997;
12 October 1997 to 11 January 1998;
12 April 1998 to 11 July 2004.
Mrs Pantic received incapacity payments under sections 19 and 21 of the 1988 Act in the period 21 February 1990 to 24 April 2004. That finding is based on evidence provided to the Tribunal in the form of an Incapacity Determination List, which listed incapacity payments made to Mrs Pantic for the hours she did not work, given her 40 hour working week.
STATUTORY FRAMEWORK
As the Federal Court noted:
Divisions 3 and 4 of Pt II of the 1988 Act provide respectively (a) for compensation to be payable to an employee ‘who is incapacitated for work’ as a result of an injury and (b) for compensation where an injury to an employee results in ‘a permanent impairment’. A permanent impairment is defined by the Act to mean ‘the loss, the loss of the use, or the damage or malfunction, of any part of the body or bodily system or function or part thereof, which is likely to continue indefinitely’.
Mrs Pantic was in receipt of regular incapacity payments (seemingly under s 19, then s 21, of Div 3) between 1990 and April 2004. Her 2007 compensation claim for a permanent impairment was founded on ss 24(1) and 27 of Div 4.
The effect of those two sections along with s 28 (a machinery provision) was, as indicated by the Full Court in Hoyle v Telstra Corporation Ltd (1997) 75 FCR 390 at 391, that:
A permanently impaired employee becomes entitled to receive a specific lump sum, on top of any other compensation to which he or she is entitled.
As will be seen, such was not the case in respect of claims made under the 1971 Act. It is for this reason that the effect of the transition provisions in the 1988 Act are of such significance in this matter.[1]
[1] Comcare v Pantic (2012) 203 FCR 83 at [6] – [8].
Relevant provisions of the two Acts follow.
1988 Act
Section 124(1) to (4) as relevant provides:
124 Application of Act to pre-existing injuries
(1) Subject to this Part, this Act applies in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day.
(1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury, loss or damage under ... the 1971 Act. ...
(3) A person is not entitled to compensation under section 24 ... in respect of a permanent impairment ... being an impairment ... that occurred before the commencing date, if: ...
(b) the person was not entitled to receive compensation of a lump sum in respect of that impairment or death:
... (iii) ... under the 1971 Act as in force when the impairment ... occurred.
(4) The amount of compensation (if any) that a person is, by virtue of this section, entitled to receive under section 24 ... in respect of a permanent impairment being an impairment ... that occurred before the commencing day, shall be the same as the amount of the compensation that would have been payable to that person, if this Act had not been enacted, under:...
(c) ... the 1971 Act as in force when the impairment or death occurred.
1971 Act
The relevant provisions are:
5(1) ‘permanent’ means likely to continue indefinitely;
39(1)
Subject to this section, where an injury to an employee results in a
loss specified in sub-section (2), the compensation payable in respect of that injury is $28,000, or such higher amount as is prescribed, and that compensation is payable to the employee....
(3) Subject to this section, where an injury to an employee ... results in a loss specified in sub-section (4), the compensation payable in respect of that injury is an amount equal to such percentage of $28,000 or, if an amount is prescribed for the purposes of sub-section (1), of that amount as is specified in sub-section (4) in relation to that loss, and that compensation is payable to the employee.
(4) The losses and percentages referred to in the last preceding subsection are the losses and percentages set out in the following table:-
| Nature of Loss | Percentage |
| ... | ... |
| Loss of arm below elbow, loss of hand or loss of thumb and four fingers of the one hand | 70 |
...
(11) The compensation payable under this Act in respect of an injury resulting in partial loss by an employee of the efficient use of a part of the body specified in sub-section (4) or of the efficient use of such a part of the body for the purposes of the employment of the employee immediately before the injury ... is such percentage of the amount of compensation that would be payable under sub-section (3) in respect of an injury resulting in the loss by the employee of that part of the body as is-
the percentage by which the injury resulted in the efficient use, immediately before the injury, of that part of the body being reduced; or
the percentage by which the injury resulted in the efficient use, immediately before the injury, of that part of the body for the purposes of the employment of the employee immediately before the injury being reduced,
whichever is the greater percentage.
....
(14) An amount of compensation referred to in this section is not payable in respect of an injury so long as the employee is, or is likely to become, totally incapacitated for work where the incapacity for work results, or, if it occurs, will result, in whole or in part from that injury.
(15) In this section, 'loss’ means a permanent loss.
Section 45 provides for compensation for injuries resulting in total incapacity. Section 45(9) provides:
45(9) Subject to sections 47 and 50, where a determination is made that an amount of compensation is payable to the employee under section 39 in respect of an injury that resulted in a loss referred to in that section or a determination is made that the liability of the Commonwealth to make further payments to the employee under section 46 in respect of an injury is to be redeemed, compensation is not payable to the employee under this section in respect of a period of incapacity for work resulting from that injury, being a period occurring after the date of the making of the determination.
Section 46 provides for compensation for injuries resulting in partial incapacity. Section 46(5) provides:
46(5) Subject to section 47 [dealing with incapacity while undergoing or as a result of medical treatment], where a determination is made that an amount of compensation is payable to the employee under section 39 in respect of an injury that caused a loss referred to in that section or a determination is made that the liability of the Commonwealth to make further payments to the employee under this section in respect of an injury is to be redeemed, compensation is not payable to the employee under this section in respect of a period of incapacity for work resulting from that injury, being a period occurring after the date of the making of the determination.
Issues
The Federal Court posed the issues as follows:
What is the correct application of section 39(14) of the 1971 Act and s 124(3) and (4) of the 1988 Act.
Whether there was any evidence to support the finding that from 23 November 1991, until 25 April 2004 Mrs Pantic was paid ‘partial incapacity benefits’.
Federal Court Consideration
In response to the questions posed Finn J said:
Turning to the question I posed above, having regard to the manifest policy of the 1971 Act, there can only be one answer in my view. If, as was said in Hoyle, the effect of ss 39(14), 45(9), 46(5) and 50 was that an employee could not retain the benefit of a lump sum payment and at the same time have the benefit of weekly compensation payments in respect of a subsequent period of incapacity, I do not consider it permissible to infer that the Act nonetheless intended to allow an employee to obtain the benefit of a lump sum payment for permanent impairment for a period prior to that for which that employee has received incapacity benefits. Those were benefits he or she would not have been able to acquire if that lump sum had been obtained prior to the claim for them. As I read the Tribunal’s reasons, the various periods it was addressing for the purpose of the impairment claim were those prior to when she was ‘totally incapacitated for work’ which, as it said, was ‘not until after 21 November 1991’: Reasons [69] and see also [61]. The Tribunal, in my view, erred in concluding that such a claim could be made with the lump sum being adjusted in a fashion the converse of s 50 to take account of the later incapacity payments. There was not a legislative mandate for making such an adjustment.
The Tribunal’s focus upon a particular period or periods when an employee was not incapacitated for work and the linking of the entitlement to claim compensation for impairment to that period or those periods as such, led it to distort the scheme of the Act itself. For so long as an employee who has suffered a qualifying permanent impairment continues to receive incapacity payments, or leaves open the option to receive such payments in the future, the employee foregoes his or her entitlement to receive such lump sum for permanent impairment as would otherwise be payable to him or her. In effect, an ‘election’ is being made between inconsistent entitlements (save in the exceptional circumstances covered by ss 50 and 49). That election, though, can be brought to an end for the future either after a period of incapacity has come to an end or before any incapacity benefits have been received at all, by the employee claiming, then receiving, compensation for impairment. By so doing, and subject to s 50, the employee foregoes thereafter the entitlement he or she would otherwise have had to receive incapacity payments.[2]
[2] Id at [34] – [35].
Finn J also noted:
Consistently with Hoyle, an employee can make a claim for a lump sum payment for a s 39(4) loss after having received incapacity payments for a preceding period of incapacity resulting from the injury occasioning that loss. Though she is now precluded from making any future claim for incapacity benefits because of her age, can Mrs Pantic still make a claim for an enduring permanent impairment? This is not an issue considered or determined by the Tribunal.
Such a claim raises no potential problem with ss 45(9), 46(5) and s 50 because no possible incapacity claim can be made by Mrs Pantic now. But what of s 39(14)? It is an agreed fact that as at 6 September 2007 when Mrs Pantic made her claim she was totally incapacitated for work. There is no agreed fact as to whether her incapacity has subsisted. Assuming it has, Mrs Pantic’s present circumstances appear to fall as of course within the language of the subsection. Yet the obvious premise of the provision is that the employee is nonetheless entitled to make a claim for incapacity benefits. Mrs Pantic cannot. Could the subsection be read down in such circumstances where the reason for the provision does not exist?
These are questions that have not been raised let alone fully explored in this matter. They are for another day. Nonetheless, the applicant’s appeal must be allowed and the Tribunal’s decision set aside.[3]
[3] Id at [39] – [41].
Contentions by Comcare
Comcare summarised the outcomes in the Federal Court as follows:
·An employee such as [Mrs Pantic] cannot obtain the benefit of a lump sum payment for permanent impairment for a past period during which the employee has received incapacity benefits. (at [16])
·The applicant received incapacity benefits until 25 April 2004 when she turned 65 and ceased to be entitled to receive them. [at [3] per Finn J; [17] Tribunal reasons]
·[Mrs Pantic] is therefore not entitled to claim a lump sum payment for permanent impairment on the basis of any period prior to 25 April 2004 when, if not totally incapacitated, she could have made such a claim but elected to continue to receive weekly compensation payments instead. (at [36] per Finn J].
As Comcare put it:
The only remaining question is whether s 39(14) of the [1971 Act] picked up and applied by s 124(3) of the [1988 Act], prevents [Mrs Pantic] from now making a claim for lump sum compensation on the basis of an enduring permanent impairment by reference to the period after 25 April 2004 when she ceased receiving weekly compensation. [at [8]-[9], [40] per Finn J).
Comcare’s response to that question was to deny her claim on the ground that Mrs Pantic has been totally incapacitated since 25 April 2004.
Contentions by Mrs Pantic
Counsel for Mrs Pantic noted:
At paragraph 15 of his judgment, the Appeal Judge noted passages from Hoyle [v Telstra Corporation Ltd (1997) 145 ALR 148] to the effect that if there were periods of partial but not total incapacity either before or after the commencement date of the 1988 Act (1 December 1988), then the disentitlement would not apply. The Applicant clearly fell within this category on the agreed facts.[4]
[4] Mrs Pantic’s Submission, 6 September 2012, at [31].
Counsel also contended, correctly according to its terms, that section 39(14) only applies while an employee is totally incapacitated. According to the agreed facts, Mrs Pantic was not totally incapacitated prior to her receipt of incapacity payments in 1990, and hence she was not totally incapacitated on 1 December 1988. According to the agreed facts she was totally incapacitated by the time of her claim in September 2007. Counsel contended, accordingly, that section 39(14) did not apply to her on the basis that, although there is no concept of partial incapacity in the 1988 Act, throughout this period Mrs Pantic was only partially incapacitated. Counsel also claimed that Mrs Pantic was not totally incapacitated in 2004, but this was not an agreed fact and may need to be decided. He also made submissions about the time from which the ‘is likely to be’ totally incapacitated test in section 39(14) should apply.
In summary his argument was:
… the effect of the transitional provisions which apply to permanent impairments are to limit the kind of impairments for which the Applicant can claim and the quantum of the claim to that payable under the 1971 Act. However, those provisions do not operate to determine the Applicant’s entitlement to permanent impairment compensation after the commencement date by reference to the superseded concepts of total and partial incapacity in section 39(14) of the 1971 Act.
… this construction of the transitional provisions is supported by the fact that under the 1988 Act, there is no concept of an ‘election’ between incapacity payments and permanent impairment claims. The 1988 Act permits both to be claimed independently and this was and is the regime into which the Applicant’s claim was inserted … after the commencement date.
Consideration
The issues require analysis of the degree of impairment of Mrs Pantic at three distinct periods: the time at which Mrs Pantic made her application; from the time of her redundancy up to and when she turned 65 in 2004; between 2004 and 2007.
Mrs Pantic turned 65 on 25 April 2004 and at that point she was no longer entitled to compensation for incapacity payments. Section 23 says nothing about payments for lump sum compensation.[5] From 21 February 1990 until 24 April 2004, the day before Mrs Pantic turned 65, she had been in regular receipt of incapacity payments.[6] The Incapacity Determination List indicates that her incapacity payments during this period, with some periods excepted, were not for her full working week of 40 hours.
[5] 1988 Act s 23.
[6] Incapacity Determination List relating to Mrs Pantic.
The 1988 Act permits an employee who has been injured at work to receive both incapacity payments and lump sum compensation for permanent impairment. The 1971 Act also made provision for payment of compensation for incapacity and payment of lump sum compensation. However, the circumstances in which a lump sum was payable under the 1971 Act were more constrained than under the 1988 Act.
In the first instance, there were limits in section 39 to the kinds of impairments for which lump sum compensation was payable.[7] In the second place, if an employee chose to receive lump compensation, from the date of the decision granting payment of the lump sum the employee was not subsequently able to claim incapacity payments.[8] In other words, there is evidence that a policy underlying provisions in the 1971 Act was that an employee had to elect whether to receive incapacity payments or take a lump sum. The employee could not receive both. The cases appear to qualify this last finding to an extent, as will be apparent.
[7] See 1971 Act s 39(3), (4).
[8] 1971 Act ss 45(9), (46(5).
Mrs Pantic’s claim for lump sum compensation was made in 2007, that is, after the commencement of the 1988 Act and the rights she had were governed wholly by that Act. The 1988 Act applies to injuries suffered by an employee ‘whether before or after the commencing day’ (section 124(1)). The ‘commencing day’ was 1 December 1988. Mrs Pantic was also not in receipt of incapacity payments under the 1971 Act. Her claim for incapacity payments was made after 1 December 1988 and liability was accepted under sections 19 and 21 of the 1988 Act.
Mrs Pantic’s claim for lump sum compensation was made under section 24 of the 1988 Act. As the injury which gave rise to her permanent impairment had occurred prior to 1 December 1988, section 124(3) of the 1988 Act provides that in those circumstances her application was affected by the transitional provisions in Part X of the 1988 Act. Section 124 is found in Part X. Section 124(3) provides that ‘A person is not entitled to compensation’, including lump sum compensation, ‘if compensation was not payable in respect of that injury … under the 1971 Act’. In effect that meant that the restrictions relating to lump sum compensation applicable in the 1971 Act, including those in section 39, applied to Mrs Pantic.
As Mrs Pantic had not made an election under the 1971 Act to claim a lump sum compensation instead of incapacity payments, sections 45(9) and 46(5) did not apply to her. Those provisions in their terms only apply when a ‘determination is made that the liability of the Commonwealth to make further payments to the employee under section 46 in respect of an injury is to be redeemed’ (section 45(9)) or ‘a determination is made that the liability of the Commonwealth to make further payments to the employee under this section in respect of an injury is to be redeemed,’ (section 46(5)). No such determination under either section had been made in relation to Mrs Pantic.
Nonetheless, since 124(3) provides that lump sum compensation payments are not payable if they would not have been permitted ‘under the 1971 Act’, the principles discernible from that Act, including the principle taken from sections 45(9) and 46(5) that a person was not entitled to both a lump sum payment and an incapacity payment for the same period, are applicable to the claim by Mrs Pantic.
Turning to section 39 of the 1971 Act, it is an agreed fact that Mrs Pantic’s impairment, being permanent since at least April 1987 and involving a ‘loss of the use of her arm at or above her elbow’, is included in the ‘Table of Maims’ in section 39(4). Her injury was, accordingly, not excluded because it did not fall within the limited class of injuries covered by section 39.
That leaves for consideration whether her entitlement was excluded under section 39(14). As Finn J said, the effect of section 39(14) of the 1971 Act is that ‘total incapacity for work can disqualify a person from receipt of a lump sum under s 24 of the 1988 Act because of the operation of s 124 of that Act’.[9] It has been agreed that Mrs Pantic was not totally incapacitated for work as at 23 November 1990 when she was made redundant, although she had become so by the time of her 2007 application.
[9] Mrs Pantic’s Submission, 6 September 2012 at [13].
Between November 1990 and April 2004 Mrs Pantic had periods when she was certified totally unable to work, as the evidence based on medical certificates at [9] and [11] of these reasons indicates. Nonetheless as the evidence in the Determination of Incapacity List indicates, she also continued to receive incapacity benefits throughout this period, but not consistently.
The Tribunal is aware that the 1988 Act under which her payments were made does not include concepts of partial and total incapacity. It is not clear from the Determination of Incapacity List what was the basis on which the payments to Mrs Pantic were made. However, the fact that there are only a few periods when she was not being paid at all, suggest that for the most part she was being paid for partial incapacity. Also she did continue to receive payments throughout the 14 years. The Tribunal did not call for further evidence on these issues given the conclusions it has reached.
These tentative findings raise an issue. Could Mrs Pantic have claimed lump sum compensation for the periods of partial incapacity she experienced between 1990 and 2004? As Finn J suggested in Comcare v Pantic:
What needs to be emphasised is that total incapacity for work does not presuppose an enduring incapacity for an indefinite period. As the [1971] Act makes plain, the incapacity may be for a period, and for a very short one at that.[10]
[10] Comcare v Pantic (2012) 203 FCR 83 at [14].
He continued, quoting obiter comments of the Full Court in Hoyle:
If, at some time before the commencing day, either of the appellants had ceased to be totally incapacitated for work, there would have been an entitlement to compensation under s 39(3) of the 1971 Act. Further, if either of the appellants ceased to be totally incapacitated at some time after the commencement day, s 124(3) might not preclude entitlement to compensation under s 24 of the [1988 Act]. The factual issues arising in relation to that question were not fully investigated below and we do not decide that question.[11]
[11] Id at [15].
These comments suggest that if Mrs Pantic had only been partially incapacitated in any periods prior to, and possibly after the commencing day on 1 December 1988, and she had made a claim for lump sum compensation either prior to 1 December 1988 or prior to 25 April 2004, she may well have been entitled to such compensation. The comments do not address the issue of whether under the 1971 Act it was possible to receive both a lump sum and partial incapacity for the same period.
The Tribunal rejects that possibility. The impracticality of a payments regime under the 1971 Act which provided for periods of payments of incapacity benefits, interspersed by periods on lump sum compensation, are obvious, particularly if the lump sum is seen as an alternative payment to partial incapacity compensation. That may be the reason suggestions have been made that section 39(14) should be interpreted as applying only when a period of total incapacity is likely to continue indefinitely.[12] Moreover, those suggestions are in line with the principle discernible from section 45(9) and 46(5) that if an election is made to receive a lump sum, the person then foregoes the possibility of receiving subsequent incapacity payments.
[12] Id at [39] –[41].
For these reasons, the Tribunal does not accept that Mrs Pantic could claim a lump sum for the periods of partial incapacity she experienced between 1990 and 2004. That finding is reinforced by its later finding as to the time at which the assessment of entitlement is to be made.
That leaves for consideration the period after 2004 when Mrs Pantic was no longer entitled to work. Although counsel for Mrs Pantic submitted that there was no evidence that she was totally incapacitated at this time, no finding has been made to that effect. There is a finding that she was totally incapacitated by 2007.
There are no medical certificates for the period between 2004 and 2007. However, in the period immediately prior to 2004, the medical certificates referred to in [9] and [11] of these reasons indicate that Mrs Pantic was certified unfit to work for the entirety of the six years prior to 11 July 2004. On that basis, and given in 2004 that she was 65 years of age, the Tribunal is not satisfied that Mrs Pantic would have been fit to work at all between July 2004 and September 2007.
In any event, her claim must surmount the hurdle of section 39(14). That section provides there is no entitlement to a lump sum compensation payment where the employee ‘is, or is likely to become, totally incapacitated for work’. As mentioned earlier, in cases of partial incapacity, section 39(14) is not applicable.[13] That means section 39(14) would not affect her application for those periods in which it has been assumed Mrs Pantic was not totally incapacitated. However, that conclusion is, subject to consideration of the date at which the entitlement in accordance with section 39(14) is assessed.
[13] Schlenert v Australian and Overseas Telecommunications Corporation (1994) 121 ALR 67; Comcare v Bozicevic (1997) 144 ALR 132.
Time at which consideration of eligibility under section 39(14) is to be decided
Section 39(14) contains no information as to the processes which apply to the section, including the time at which the assessment is to take place. However, in this matter that issue is critical since the agreed facts are that Mrs Pantic was not totally incapacitated at the time of her redundancy in 1990, but that she had become so by 2007, that is, the date of her claim.
Counsel for Mrs Pantic submitted:
… that the proper interpretation of section 39(14) of the 1971 Act is, and prior to the enactment of the 1988 Act always was, whether the Applicant is likely to become totally incapacitated as a result of her compensable permanent impairment before her retirement age.[14]
[14] Applicant’s Submission [59].
Counsel for Comcare posed the issue thus:
The only remaining question is whether s 39(14) … picked up and applied by s 124(3) and (4) of the [1988 Act], prevents the applicant from now making a claim for lump sum compensation on the basis of an enduring permanent impairment by reference to the period after 25 April 2004 when she ceased receiving weekly compensation.
The answer is ‘no’ – because the applicant has clearly been totally incapacitated since this time.
Counsel chose 25 April 2004 because the comments of Finn J cited earlier indicate that if, prior to turning 65, Mrs Pantic had not been totally incapacitated she could have made a claim for a lump sum payment of compensation.[15] Although Finn J may not have turned his mind to the period after Mrs Pantic turned 65, since section 23 does not apply to section 24 and section 27 of the 1988 Act, the incapacity for work provisions, had she not been incapacitated after she turned 65, Mrs Pantic may also have been eligible to apply for a lump sum for that period also.
[15] See also Re Gioia and Australian Telecommunications Commission (1988) 14 ALD 583.
On the issue of the timing of the consideration of eligibility under section 39, Sackville J in Razmovski v Telstra Corporation Ltd concluded:
It seems to me that the clear intention of s 124(4) is that a claimant who has suffered a pre-commencing day permanent impairment should receive no lump sum compensation in respect of that impairment if, at the time of the claim, he or she is totally incapacitated for work. In this respect, the SRC Act preserves the position that applied before the commencing day.[16]
[16] Razmovski v Telstra Corporation Ltd (1997) 75 FCR 390 at 17.
It appears that the Full Court, on appeal, adopted this view of Sackville J when the Court commented in relation to Mr Razmovski that:
… it was apparently not suggested to the Tribunal that Mr Razmovski had ceased to be totally incapacitated at the time when he applied for the lump sum compensation under section 24 of the [1988] Act or at the time when the Tribunal made its determination. Nor did his counsel suggest to Sackville J that there was any material before the Tribunal which could have supported a finding that Mr Razmovski was only partially incapacitated on those dates.
In other words, the Full Court adopted the formulation of Sackville J that the entitlement decision was to be made either at the time of the application for the lump sum compensation, or at the time a decision was made on that issue. In Mrs Pantic’s case her claim was made on 6 September 2007. On that date, according to the agreed facts, Mrs Pantic was totally incapacitated. That would mean that in accordance with the terms of section 39(14) Mrs Pantic would be disentitled to claim a lump sum because she was disentitled at the date she made her claim.
The view of Sackville J and of the Full Court is consistent with the finding of the High Court in Heath v Commonwealth,[17] namely, that ‘a question under [section 39] will not arise unless and until an employee seeks a determination under it’.[18] The decision in Heath was that it was fairer for the employee, not the Compensation Commissioner, to make that determination, and it had been premature for the Commissioner to have made an own motion consideration on this issue.
[17] Heath v Commonwealth (1982) 151 CLR 76
[18] Id at [27] per Mason and Wilson JJ. See also at [13] per Murphy J; and at [10], [12], [14], and [16] per Brennan J.
The Tribunal does not accept the contention of counsel for Mrs Pantic on this issue that entitlement should be assessed on a date prior to her retirement age. Instead, the Tribunal prefers the views of the Federal Court at first instance and on appeal in Razmovski and Hoyle, respectively, as supported by the decision of the High Court in Heath. Accordingly, as Mrs Pantic did not apply for a lump sum compensation payment until 6 September 2007, at which time she was totally incapacitated, and that situation had applied at least for the preceding three years, her circumstances fall within section 39(14) and she was thus disentitled from claiming a lump sum payment either for the period 1990 to 2004, or for the period April 2004 to September 2007.
Conclusion
Mrs Pantic is not entitled to a lump sum compensation payment under the 1988 Act on two counts:
·She was disentitled under section 39(14) of the 1971 Act as at the date of her claim; and
·She had received incapacity benefits until she turned 65 in 2004 when she lost her entitlement to such benefits (section 23 of the 1988 Act). So although she had not made an election to receive a lump sum payment instead of incapacity payments prior to 2004, the principle underpinning the 1971 Act would have precluded her receiving payments during this period; and between 2004 and 2007 and at the date of her claim in 2007 she was totally incapacitated and would thus have been precluded from seeking a lump sum compensation under s 39(14).
| I certify that the preceding 56 (fifty-six) paragraphs are a true copy of the reasons for the decision herein of PROFESSOR RM CREYKE, SENIOR MEMBER, and DR BERNARD HUGHSON, MEMBER. |
......................[sgd]..................................................
Associate
Dated 13 November 2012
| Date(s) of hearing | 24 October 2012 |
| Advocate for the Applicant | Daniel Steiner |
| Solicitors for the Applicant | Capital Lawyers |
| Advocate for the Respondent | Bradley Dean |
| Solicitors for the Respondent | Australian Government Solicitor |
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