Pashalis, D. v Social Security, Department of

[1988] FCA 572

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JUDGMENT No .. Z.zd.$. . .. 8.8-

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CATCHWORDS

SOCIAL SECURITY - Appeal from the Administrative Apeals

Tribunal - decision refusing to grant an invalid pension - whether applicant permanently incapacitated for work - whether incapacity for work 8 5 percent or greater - whether the Tribunal applied the correct test.

Social Security Act 1947 (Cth)

McDonald v. Director-General of Social Security (1984) 1
F.C.R. 354

Adamou v. Director-General of Social Security (1985) 3 A.A.R.

321.

DIMITRIOS PASHALIS V. SECRETARY, DEPARTMENT OF SOCIAL SECURITY

No. SA G62 of	1988
Davies, Gummow and	Lee JJ.
20 September 1988
Adelaide

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12 OCT 1988

FEDERAL COURT OF

AUSTRALIA

PRINCIPAL REGISTRY

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LIMITED DISTRIBUTION ONLY

IN THE FEDERAL COURT OF AUSTRALIA

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SOUTH AUSTRALIA DISTRICT	REGISTRY	)	No. SA G62 of 1988
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DIVISION GENERAL 1

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On Appeal from the General

Administrative Division of the	L .i
Administrative Appeals Tribunal	I . '
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BETWEEN: DIMITRIOS	PASHALIS
Applicant

AND :	SECRETARY, DEPARTMENT OF
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SOCIAL SECURITY

Respondent

CORAM:  Davies, Gummow and Lee JJ.

-	DATE :	2 0 September 1988
PLACE :	Adelaide

REASONS FOR JUDGMENT

Davies J.:  This is an appeal from a decision of the

Administrative Appeals Tribunal given on 24 June 1988

affirming a decislon refusing to grant to the appllcant, Mr D.

Pashalis, an invalid pension. The issue before the Tribunal was whether Mr Pashalis was a person who was permanently incapacitated for work and whether the degree of hls permanent

incapacity for work was not less than 85 percent. See	s.23	I :
Social Security Act 1947 (Cth).

i 2.

. The applicant, Mr Pashalis, had had an injury at work

and had suffered chronic musculo-ligamentous strain. He had	I	,
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also developed a psychiatric conditlon, a moderate depressive/anxiety state. The Tribunal heard evidence from the applicant and from a number of medical practititioners.

The Tribunal accepted, in particular, the evidence

given by Dr Black, a psychiatrist. The Tribunal said:-

"1 prefer the evidence of Dr Black insofar as his

evidence may differ from that of the other I.

psychiatrists. His diagnosis is supported by the I '

greater volume of evidence, he has seen the applicant	, -
on more occasions than the other psychlatrists and
also, having had the opportunity of personally
observing the applicant, I find that the applicant's
whole presentation most closely resembles	! '
descriptions given by Dr Black."

In three reports, Dr Black had stated the applicant was 85

percent incapacitated for work. In his oral evidence, Dr

Black confirmed that view. However, he declined, in his oral

evidence, to express the view that the applicant's condition

was either stabilized or permanent. In evidence-in-chief, Dr

Black gave this evidence:- l ,

"Is it your view that this condition will persist in

the forseeable future?---I think the answer to that
depends on what treatment can be offered to the
gentleman and what response he makes to treatment. I
think he certainly should have some psychiatric

treatment particularly of an anti-depressant kind,

and when one looks at that one can think about where

i he is going to go as regards prognosis or outlook.

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Subject to that possibillty of improvement through

treatment his conditlon will remain for the	I . I
indefinite future.	Do you agree wlth that?---In the
forseeable future I do not see	him getting better
short of having treatment.

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.	TIIE D. PRESIDENT: What form of treatment are you	; ,:
thlnklng of, some form of psychotherapy for	I .
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depression?---Psychotherapy would be appropriate for

him. I thlnk he should have anti-depressant

medication which is important these days in treating medication at the present time?---I am not aware of him being on any anti-depressant medication."

depression. He should have both those.

In cross-examination Dr Black gave this evidence:-

"And you would not agree that Plr Pashalis would have a

means of controlling these depressive states, to turn	!
hls mind to It and address the problems that are	I -
facing him?---I do not think it is a matter of

i	controlling his depresslon any more than you and I
can control cancer. This is an illness. The man
needs treatment. It is not a matter of controlling
his illness. He needs treatment. :-

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...	, .
What I am trying to put to you is:	engaging in

employment would be a first step towards addressing

his depressive symptoms? ---NO, it does not	work that
way at all.	The man is depressed, I just explained
it to you	this way. As I see him he has got a

psychiatric illness, a medical illness. The

aetiology I have detailed here.	I do not believe
that he is really fit to get	back Into the workforce.

NOW, okay, I will go along easily with the idea that if he has sufflclent and adequate treatment he may feel better and he may be able to attempt getting back, I can see that as a reality, but at the moment I do not think he is."

The Tribunal, having accepted Dr Black's evldence,

!	formed the vlew that Mr Pashalis had an incapacity for work
which was an incapacity of not less than 8 5 percent. However,
the Tribunal also accepted the view of Dr Black that I have
just mentioned and that of Dr Thakur and of a Commonwealth rehabllitation officer that rehabilitation would be beneficial. The Tribunal concluded:-

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"The applicant 1 s only 39 years of age. His organic

disabillty is mild and also his anxlety/depresslve state is mild to moderate. I do not consider that all avenues of treatment have been pursued whereby the applicant may, by a combxnation of psychotherapy

and rehabilitation, be given an opportunity to

improve the present level of incapaclty. The	l
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applicant has been sent to a myriad of different	I. .
examining practitioners for diagnostic purposes and it would be preferable if he could be stablllsed by psychotherapy with one practitioner as well as
undergoing an appropriate rehabllitatlon programme at a treatment centre. Only after thls avenue has been tried, should further consideration be given as to
whether or not his present found Incapacity 1 s
permanent.	"

Mr Blumberg, counsel for the appllcant in this

appeal, has submitted that	the Tribunal applied the wrong
legal test. He	has submitted that the test to be applied was

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that stated by a Full Court of this Court in McDonald v.

I	Director General of Social Security (1984) 1 FCR 354 and by Mr
I	Justice Wilcox in Adamou v. Director General of Social
Security (1985) 3 AAR 321. He submitted that the Tribunal did
not consider the issue before It on the basls of probability _ .
but only looked at the question of possibility.

However, the Tribunal cited from NcDonald v. Director

of Social Security (supra),	and from Adamou v. Director
General of Social Security (supra),	and set out in the reasons
for decision passages from each, including	the following

passage from the judgment of Mr Justice Wilcox in Adamou's

case (supra at p.325):-

"A present level of incapacity may be likely to

persist in the foreseeable future - or
indeterminately - notwithstandxng that there is a

possibility of improvement, whether because of some

new form of treatment or otherwise.	A possibility of
one situation does not	negative a probability of the

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1	'	.	5.
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I	opposite position. Only If it can be said that there exists a probabillty, as distinct from a possibility, that there will be such a degree of improvement in
the future that the incapaclty will fall below the stipulated level may it be said that the incapacity
is not 'permanent', that 1 s temporary."
I am unable to draw the conclusion that the Tribunal

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applied a wrong legal test. In my opinion, on the evidence

before it, the Tribunal came to the view that it was not

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satisfied that the applicant's Incapacity for work was
permanent. Its findlng on that point was consistent with the

evidence of Dr Black and consistent also wlth the evidence of

the other witnesses I have referred to. If an applicant for

an invalid pension suffers from a treatable condition in
respect of which treatment has been advised, a declsion maker

may not be able to be satisfled that the conditlon is

permanent until that treatment i s carried out. As to whether

in a particular case it should or should not be so satisfied

must depend upon the facts of the case. In a review before

the Administratlve Appeals Tribunal, the Tribunal is the judge

of those facts.	"
Nothing that was said In McDonald v. Director General of Social Security (supra) or in Adamou v. Dlrector General of	Social Security (supra), appears to me to be lnconslstent wlth
the view I have just expressed.

Mr Blumberg also raised issues of natural justlce.

One may sympathize that Mr Blumberg may have been surprised by

the evidence of Dr Black, to which I have referred, for that

evidence was not foreshadowed in the written reports of Dr

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6.

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l	Black. But the evidence was that of N r Blumberg's own witness
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and was given in answer to hls own questlons. All parties
i	were aware that one of the Issues in the revlew was whether or
11	not the appllcant's condition was permanent. In my opinion,
no case of denial of natural ~ustice has been demonstrated.

For those reasons I would dismiss the appeal. The

appeal will be dismlssed with costs.

Gummow J.:	I agree and have nothing to add.
Lee 3 . :	I agree with the reasons expessed by the learned
presiding Judge and have nothlng further to add.

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I certify that this	and the 5
preceding pages are a	true copy of

the Reasons for Judgment herein of

the Court.

Associate: m	Date:	L
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Counsel for the applicant: 

PIr 1.I.S. Blumberg

Solicitors for the applicant: 

Palios, 1-Ieegan & Nicholson

Counsel for the respondent: 

Mr J.J. O'Halloran

Solicitor for the respondent: 

Australlan Government	l '
Solicltor	i '

Date of hearing: 

20 September 1988