Phillips and Military Rehabilitation and Compensation Commission
[2008] AATA 336
•24 April 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 336
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/4590
GENERAL ADMINISTRATIVE DIVISION ) Re PAUL PHILLIPS Applicant
And
MILITARY REHABILITATION AND COMPENSATION COMMISSION
Respondent
DECISION
Tribunal Honourable Dr B H McPherson CBE Deputy President
Ms MJ Carstairs, Senior MemberDate24 April 2008
PlaceBrisbane
Decision The Tribunal has jurisdiction to hear the application to review the reviewable decision dated 11 September 2007.
..................[Sgd]............................
DEPUTY PRESIDENT
CATCHWORDS
COMPENSATION – jurisdiction – compensation for permanent impairment – gross osteoarthritis of both hips – original injury while 1971 Act in force — whether permanent impairment occurred before or after commencement of 1988 Act.
COMPENSATION – journey provisions – meaning of “the day in which the period of liberty ended”.
COMPENSATION – claims provisions – meaning of “was or would have been payable”.
Compensation (Commonwealth Government Employees) Act 1971(Cth) ss 27, 29, 32, 34
Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 24, 48, 54, 124, 139,Brennan v Comcare (1994) 122 ALR 615
Comcare v Maida [2002] FCA 1284
Comcare v Levett (1995) 131 ALR 645
Prowse v McIntyre (1961) 111 CLR 264
Australian and Overseas Telecommunications Corporation Ltd v Commissioner for Land Tax (Qld) [1994] 2 Qd R 350
Harvey v R G O’Dell Ltd [1958] 2 QB 78
Brambles Constructions v Helmers (1966) 114 CLR 213
Owners of “Iran Armanat” v KMP Coastal Oil Pty Limited (1999) CLR 130
Re Phoenix Oil v Transport Co Ltd [1958] CH 560Luntz, H Assessment of Damages for Personal Injury and Death (2nd ed, 1983) paragraph 5.6.04, 367.
REASONS FOR DECISION
24 April 2008 Honourable Dr B H McPherson CBE Deputy President Ms MJ Carstairs, Senior Member INTRODUCTION
1. At about 1.30pm on Sunday 9 May 1982, the applicant Paul Phillips, then aged 20, was riding his motor cycle along Northbourne Avenue, Canberra, when he came into collision with a car driven by Kevin Dunley The applicant was thrown on to the road surface and sustained personal injuries, of which for present purposes it is enough to refer to a fracture of the pelvis and a chip fracture of the right fibula associated with lateral ligamentous knee damage. He was admitted to and treated in hospital. Later he was re-admitted and underwent surgical procedures in the form of an arthroscopy and ultimately a right knee reconstruction.
2. On 28 January 1983 the applicant as plaintiff issued a writ out of the Supreme Court of the Australian Capital Territory against Kevin Dunley as defendant. Pleadings were delivered in which the plaintiff claimed damages for negligence arising out of his injuries, and the defendant alleged contributory negligence on the part of the plaintiff in the driving of his motor cycle. On 10 January 1985, the action was settled on terms that, by consent, judgment was entered for the plaintiff in the sum of $33,000 with no order as to costs; with the defendant having leave to deduct and pay from that sum monies payable by the plaintiff in respect of workers’ compensation, social services, etc; and with the plaintiff undertaking to pay any amount not so deducted, as well as outstanding amounts due for medical, hospital and other expenses. When the applicant’s legal costs were also brought to account, he in fact ended up receiving only about $16,000 out of the agreed damages award.
3. Matters might have rested there had it not been for the fracture of the applicant’s pelvis. This fracture united satisfactorily and at first gave the applicant no trouble. It was, he claims, only in 2001, almost 20 years after the collision in 1982, that he first began to feel “twinges” in his left hip and groin. By 2002 these twinges had developed into a dull ache, which occurred three or four times over a period of six months. By 2003 he became aware of physical limitations resulting from his left hip condition. In 2004 similar conditions developed in his right hip. He consulted Dr Kuhnemann, an orthopaedic specialist, who recommended a total hip replacement, which he was not able to afford. As his disability further deteriorated, he consulted Dr Liu, who advised that the applicant was suffering osteoarthritis of both hips caused by the pelvic fracture in 1982. This was confirmed by Dr Brian Purssey, orthopaedic specialist, who on 13 October 2006 diagnosed the applicant as suffering from gross osteoarthritis of both hips which, he considered, had become permanent by 2004, and which was attributable to the pelvic fracture sustained in 1982.
4. On 20 October 2006, his solicitors on his behalf lodged with the respondent Military Rehabilitation and Compensation Commission, a claim for compensation under the Safety, Rehabilitation and Compensation Act 1988 (the 1988 Act). There appears to have been one or perhaps two earlier claim forms submitted by the applicant on 24 July 2006, which are referred to in the delegate’s decision given on 11 September 2007; and it is this decision confirming the rejection of the applicant’s claim which he now seeks to have reviewed by the Tribunal.
5. The facts, opinions and events recounted above are those stated by the applicant and in a number of respects remain to be established at a future hearing. In the meantime, however, the parties have isolated several questions which, if now decided in favour of the respondent, will be decisive of and fatal to the applicant’s claim for compensation. In a way, therefore, the current hearing is interlocutory in the same sense as it would be if proceedings were taken in court to strike out a claim as disclosing in law no sufficient cause of action or claim.
6. Even so, Mr Clark of counsel, who appeared before us for the respondent, complained that he was unable to proceed before us on the date fixed for this hearing. He had expected the applicant to be present and available for cross-examination, but he was not here. The applicant or his instructing solicitors had, however, been given no notice, written or oral, requiring the applicant to be present for that purpose; the respondent instead relied on what Mr Clark said was the invariable practice of presenting the applicant for cross-examination on such occasions.
7. We are far from persuaded that anything said in support of the omission in this instance served to excuse the respondent from taking the elementary precaution of giving notice. The applicant lives some distance away at the Coast, and Ms Scott-Mackenzie not unreasonably declined to agree to telephonic cross-examination of her client without first having the opportunity of taking instructions from him about the matters likely to be raised. The result was that this hearing was threatened with adjournment, with all the concomitant wastage in time and cost that that would entail. Instead, we required Mr Clark to proceed, while on our part undertaking to protect his interest in cross-examining the applicant on matters properly in issue at this interlocutory hearing. From what could be gathered, Mr Clark hopes by adroit cross-examination to elicit from the applicant that some 25 or more years ago he was well aware or was in fact advised of his right to claim compensation under the 1971 Act or that he was so advised by his solicitors at the time of the common law action in 1983. As well, Mr Clark plans to enquire what heads or items of damage were comprised in the sum of $33,000 that was agreed as the settlement sum in 1985.
THE 1988 ACT
8. The 1971 Act was the Compensation (Commonwealth Government Employees) Act 1971. Its relevance is that, at the time the injuries were sustained, the applicant was an enlisted member of the Defence Force. He was attached to the Royal Australian Electrical and Mechanical Engineers and was stationed at No 2 Base Workshop at Moorebank in Sydney. On the afternoon of Sunday 9 May 1982 when the collision occurred, the applicant was returning there after a period of four days’ leave which he had spent with his parents, who lived in Canberra.
9. The 1971 Act and its statutory siblings were repealed by s 139 of the Safety, Rehabilitation and Compensation Act 1988 (the 1988 Act), the date of commencement of the 1988 Act being 1 December 1988 (the commencing day). Mr Clark was nevertheless disposed to submit that the applicant’s claim for compensation was made under the 1971 Act. With respect, that cannot be correct because the 1971 Act was repealed and so has ceased to operate of its own force. The 1988 Act contains in Part X, headed “Transitional provisions, consequential amendments and repeals”, a series of provisions, which as Gummow J said of them in the Federal Court in Brennan v Comcare[1]:
“… are not concerned with the preservation of the old legislation in respect of rights and liabilities accrued thereunder. Rather, they deal with the creation and substitution from their commencement of new rights in respect of past events. Thus the provisions may be described only in a particular sense as being retrospective.”
[1] (1994) 122 ALR 615 at 623-624.
It is not perhaps quite clear that the decision-maker in the present instance fully appreciated the impact of these provisions or the significance of his Honour’s comments about them in Brennan v Comcare.
10. Early in the reasons for his decision now under review, the decision-maker set out s 29 of the 1971 Act, explaining that it was “relevant” to the applicant’s claim. We are not persuaded that s 29 of the 1971 Act is at all relevant here and Mr Clark was himself unable to say why it had been set out in the reasons for the decision under review. Section 29 of the 1971 Act is concerned with compensation payable to an employee who contracts a disease or suffers an aggravation of a disease. MsScott-Mackenzie was adamant that her client had never claimed to have contracted a disease. That seems to us to be correct. His case has always been that he had sustained an injury (the fractured pelvis) in 1984, which by 2004 or thereabouts, had become permanent. The claim therefore falls within s 24(1) of the 1988 Act, which makes the respondent liable to pay compensation in respect of an injury to an employee that results in a permanent impairment. The applicant’s right (if any) to compensation for the fractured pelvis sustained in 1982 is said now to arise under s 24 of the 1988 Act and not under the repealed 1971 Act.
11. Any doubt on this score is put at rest in law by the express terms of s 124 and s 124(1A) of the 1988 Act, which form part of the Transitional provisions in Part X. Section 124(1A) provides:
“(1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury…suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury…under the…1971 Act”.
12. Despite having confirmed the right of someone like the applicant to compensation under the 1988 Act for an injury sustained before the commencing day, s 124(2) goes on to provide that:
“(2) A person is not entitled to compensation under this Act in respect of an injury… suffered before the commencing day if compensation was not payable in respect of an injury:
(a) …
(b) …
(c) … under the 1971 Act as in force when the injury was suffered.”
13. We have already noticed the definition of “injury”. Here the fracture of the applicant’s pelvis was sustained before the commencing date of 1 December 1988. However, at the date that that injury was sustained, s 27(1) of the 1971 Act made compensation payable in respect of such an injury. Accordingly, the applicant’s right to compensation under the 1988 Act is not excluded by s 124(2).
14. The applicant thus surmounts any hurdle afforded by s 124(2) of the 1988 Act. In addition, however, s 124(3) imposes a further qualification or exclusion on the right to compensation under s 24 of the 1988 Act. Under s 124(3) the applicant is not entitled to compensation under s 24 in respect of a permanent impairment “being a permanent impairment that occurred before the commencing date.” “Impairment” means the loss of use of any part of the body or of any bodily function: see s 4 of the 1988 Act; “permanent” means likely to continue indefinitely. The exclusion in s124(3) therefore does not apply to the applicant if he makes good his contention that the current permanent disability of his hips did not occur until 2006 or at earliest 2004, or in any event after 1 December 1988. That is a matter to be determined at a future hearing at which the evidence of medical experts will no doubt be adduced.
15. The basis of the applicant’s claim to compensation under the 1988 Act is that he sustained an injury in 1984 which produced a permanent impairment of a bodily function in 2004 or after. The function of s 124(1A) was the subject of submissions at the hearing before us. In Brennan v Comcare[2], Gummow J spoke of “obscurity” in its application, which, however, was, his Honour considered, limited by the opening phrase in s 124(1) and by s 124(1A). Each subsection is introduced by the words “Subject to this Part”, and so incorporates the other subsections of s 124, which “state circumstances in which a person is not entitled to compensation under one or other of the substantive provisions of the 1988 Act” (122 ALR 615, at 627). In this way, his Honour said, “what would otherwise be the rights conferred by the earlier provisions of s 124 are qualified or excluded”. In the Full Federal Court, Burchett and Ryan JJ, who affirmed the decision of the primary judge setting aside the Administrative Appeals Tribunal decision, concurred with his Honour’s reasons. The reason why that decision was set aside was that the Tribunal had failed properly to determine whether the applicant’s impairment was permanent and as such had occurred after 1 December 1988.
[2] (1994) 122 ALR 615 at 626-627.
16. In the reasons for judgement of Gummow J in Brennan v Comcare[3], the following passage appears:
“However, what would otherwise be his entitlement to compensation under s 24 will not exist if the impairment occurred before 1 December 1988. That is the effect of s 124(3).
No direct legislative guidance is given, in relation to the concept of “permanent impairment”, as to the effect of the expression in s 124(3), “occurred before the commencing date”. However, the legislative framework indicates that there are at least three steps involved. The first is that there must have been an injury to Mr Brennan. Obviously this must have occurred before the commencement date. It was not, as I understand it, disputed that Mr Brennan satisfied this criterion.
Next, the injury must have resulted in an impairment, meaning the loss, or the loss of the use, or the damage or malfunction of any part of the body, or of any bodily system or function or part thereof. Further, that impairment must have been permanent, that is to say likely to continue indefinitely. That state of affairs must have been reached before the commencement date.”
[3] (1994) 122 ALR 615, at 631.
17. For the respondent, Mr Clark relied on the last sentence in this passage, and submitted that the permanent state or condition of the impairment “must have been reached before the commencement date”. That is so, but it should be clearly understood that what his Honour was discussing there were the criteria to be fulfilled before the exclusion created by s 124(3) takes effect. That can be seen from the opening paragraph of the passage quoted above: that is the “entitlement to compensation under s 24 will not exist if the [permanent] impairment occurred before 1 December 1988. That is the effect of s 124(3)”. It is an inversion of his Honour’s remarks, and indeed of s 124(3) of the 1988 Act itself, to treat it or them as excluding a claim if the quality of permanence of the impairment had not been attained before the commencing date. Expressing it in another way, it is only if the impairment has reached a state of permanence after and (not before) the commencing date of 1 December 1988 that the exclusionary aspect of s 124(3)(b)(iii) is removed. Here the applicant’s case is that the disability or impairment of his hips did not become permanent until after 1 December 1988; and, if so, then he is outside the scope of disqualifying provisions of s 124(3). This is what serves to distinguish the decision in Comcare v Maida[4], which raised the question whether there had been a progressive deterioration after 1988 of a condition that was already permanent before it. Given the factual assumptions on which the applicant’s case is currently based, it falls within the authority of Comcare v Levett[5] rather than of Comcare v Maida.
[4] [2002] FCA 1284.
[5] (1995) 131 ALR 645.
THE JOURNEY PROVISIONS
18. It is convenient next to turn to what are called the ‘journey provisions’, or what has also been described as the employment nexus between the injury sustained on 9 May 1982 and the applicant’s employment by the Defence Force on that date. The applicant and the respondent accept that in this instance the issue falls to be determined under the journey provisions of s 34 of the 1971 Act. No doubt it is s 124(1A) of the 1988 Act that makes those provisions relevant to this claim for compensation.
19. Section 32(1) of the 1971 Act applied that Act in relation to a journey by an employee to his employment. Section 34 then proceeded in succeeding subsections to extend that provision by deeming a journey in certain specified circumstances to be a journey to his employment under s 32. The applicant relies primarily on the extending provisions in s 34(2)(a); or, in addition (but only if needed as an alternative), on those in s 34(4). On the material before us at present, we consider that the applicant has satisfied the requirements of s 34(2)(a).
20. As previously mentioned, when the applicant was injured in the collision at 1.30pm on Sunday 9 May 1982, he was returning to No 2 Base Workshop at Moorebank in Sydney from a period of leave spent with his parents in Canberra. That base at Moorebank was the camp where he lived. Section 34(2) of 1971 Act provided so far as material that:
“…. where an employee who is, as an incident of his employment, provided with living accommodation situated within his place of employment and by the terms of his employment is not, or may not be, at certain times at liberty to absent himself from his place of employment makes a journey to or from his place of employment during a period during which he is at liberty to absent himself from his place of employment (in this sub-section called “the period of liberty”) then –
(a)in the case of a journey to that place of employment – if the journey ended or would have ended during the period (in this section called a “prescribed period”) that commenced at eight o’clock in the evening of the day immediately preceding the day on which the period of liberty ended and ended at the expiration of the period of liberty, the journey shall be deemed for the purposes of subsection 32(1), to have been a journey to his employment by the Commonwealth.”
The terms of s 34(2)(a) tend to suggest that it was a provision specifically designed to cater for the exigencies of life and service in the Army and other branches of the Defence Force.
21. Before absenting himself from the base at Moorebank in May 1982, the applicant applied for and was granted leave of absence. The document by which this was done is headed “Application for Leave”. It is exhibit 3 and is dated 3 May 1982. It was approved on 4 May 1982 granting him a period of leave from 6 May 1982 to 9 May 1982 inclusive. There is a box in the top right corner of the application form, which makes it clear that it covered four days of leave of which two were granted to him as a “debit” and the remaining two comprised the weekend that would have been Saturday 8 May and Sunday 9 May. The inscription at the foot of the form signed by the applicant intimates that the leave was needed by him “to get to Canberra on a working day to sign and renew driver’s license”.
22. The applicant submits that the result was, and is, to bring him within the terms of s 34(2)(a), so that the journey he was making on Sunday 9 May 1982 to his place of employment at the Army base at Moorebank was a journey within the meaning of s 32(1) and so formed part of his employment. The application of s 34(2)(a) in this instance depends on whether or not the journey he was making “would have ended” within the “prescribed period” referred to in that provision, which in turn depends on the meaning of the word “day” in s 34(2)(a). The applicant submits that the ordinary meaning in law of “day” is “the period of time which begins with one midnight and ends with the next”[6]. This was the view of it adopted by Windeyer J in Prowse v McIntyre[7], where his Honour said:
“A day for legal purposes is the mean solar day, a period of twenty-four hours. These hours are reckoned from midnight to midnight, the instant of midnight being both the end of one day and the beginning of the next…”
[6] See Halsbury’s Laws of England (4th Ed), vol 4 para 1113.
[7] (1961) 111 CLR 264, at 278.
See also per Kitto J[8] in the same case; and also Australian and Overseas Telecommunications Corporation Ltd v Commissioner for Land Tax (Qld)[9].
[8] (1961) 111 CLR 264, at 273 and 274.
[9] [1994] 2 Qd R 350, at 359.
23. The journey being made by the applicant on his motor cycle to Sydney from Canberra ordinarily took him three to four hours (para 11 of statement dated 13 November 2001) of which not much had elapsed by the time the collision occurred in Canberra at 1.30pm on Sunday 9 May 1982. He would have expected to complete his journey to the base at Moorebank at about 4.30pm on that day.
24. In applying s 34(2)(a) the first step is to identify “the day on which the period of liberty ended”. That day was Sunday 9 May 1982 ending at midnight on that day. The second step is to identify “the day immediately preceding” that day. That day was Saturday 8 May 1982 ending at midnight on that day. The “prescribed period” thus commenced at 8pm on the evening of that day. For s 34(2)(a) to apply in this instance the injury sustained in the collision must have been suffered during a journey being made at some time between those two termini, which on the material before us was at 1.30pm on Sunday 9 May 1982. In response to this, the respondent points to the applicant’s statement dated 13 November 2007, in which he says (paragraph 7) that he was “required to report for duty at 7.30am on Monday” 10 May 1982; and in paragraph 4 that he was “required to be back on duty” at that hour and day. That was not, however, “the expiration of the period of liberty” under s 34(2)(a) which he had been granted on 4 May 1982. It had expired at midnight on Sunday, and that remains so whether or not in practice the Army might perhaps have allowed some leeway, provided he and others in his position reported for duty at 7.30am on Monday. He was, after all, enlisted as a mechanic and was not actively fighting the enemy at that time and place. This appears to be a matter on which Mr Clark is proposing to cross-examine the applicant or to lead further evidence.
THE “CLAIMS” PROVISIONS
25. What remains to be considered are the claims provisions of the 1971 Act and the 1988 Act, if applicable. Each of those Acts also contains a notice provision in effect requiring written notice of the injury to be given as soon as practicable. Those notice provisions are, as it happens, in s 53 of each of the 1971 Act and the 1988 Act. We understand Mr Clark to say that the respondent did not rely on the provisions of either of those sections. That is not altogether surprising given that, after initially being treated at the Canberra Hospital on 9 May 1982, the applicant was on 15 May 1982 transferred to the Royal Military Hospital at Duntroon. He was treated there and later at Ingleburn Military Hospital, where the arthroscopy and knee reconstruction procedures were carried out. Section 53(4)(c) provided in effect that failure to give the notice required by s 53(1) was of no account if the Commonwealth was not prejudiced by it; or the failure to give it resulted from ignorance or mistake or other reasonable cause. The fact is that having treated the applicant in various military hospitals after the accident, the Commonwealth knew more about the details of his injuries than did the applicant himself. The notice provisions in s 53 of the 1988 Act are similar in their effect and, like them, they leave the matter to depend on evidence of prejudice to the relevant authority arising from failure to give the notice referred to s 53(1). See s 53(3) of that Act.
26. It is the claims provisions, not the notice provisions, in one or other of the Acts that are relied on here by the respondent. Section 54(1) of the 1988 Act provides that compensation is not payable to a person “under this Act” unless a claim for compensation is made under s 54. A claim is to be made by giving the relevant authority a written claim in the approved form: s 54(1). No time is prescribed within which a written claim is to be made; but, in any event, a claim was made on 20 October 2006, which was only a week after Dr Purssey diagnosed the applicant as suffering from gross osteoarthritis of both hips. It has not been suggested that this notice was not adequate for the purpose of s 54 of the 1988 Act.
27. The problem said to be facing the applicant is, however, ascribed to s 54 of the 1971 Act. Section 54(1) of that Act was so far as material in the following terms:
“54. (1) Compensation in relation to an employee is not payable under this Act to a person unless a claim in writing for the compensation was served, as prescribed, on the Commissioner by or on behalf of the person within the prescribed period.
(2) If the claimant is the employee, the prescribed period for the purposes of the last preceding sub-section is –
(a) in the case of a claim in relation to an injury to the claimant –
(i)the period of six months commencing on the day of the injury; or…”
Subsection (6) of s 54 of the 1971 Act is also relevant. It says:
“(6) Where:
(a)a claim purporting to be a claim referred to in sub-section (1) of this section has been served on the Commissioner;
(b)the claim, as regards the time or manner of service, failed to comply with the requirements of that sub-section; and
(c)the Commonwealth would not, by reason of the failure, be prejudiced if the claim were treated as a sufficient claim, or the failure resulted from the death, or absence from Australia, of a person, from ignorance, from a mistake or from any other reasonable cause,
the claim shall be deemed to have been served in accordance with that sub-section.”
28. Since the repeal of the 1971 Act, it has simply not been possible to serve a claim in accordance with s 54 of the 1971 Act. And it was only after that date, so the applicant contends, that he began suffering from, or became aware that he was suffering from, bilateral osteoarthritis of the hips. On any view, the failure to serve the claim as required by s 54 of the 1971 Act therefore resulted “from ignorance… or from any other reasonable cause”. That would mean that the claim which is now made, or was in fact made on 20 October 2006, is by s 54(6) of the 1971 Act deemed to have been served in accordance with s 54(2). But in truth it would be absurd to attempt to apply s 54 of the 1971 Act, rather than s 54 of the 1988 Act, to the applicant’s claim in this instance. At the date of the injury, and for much more than a period of six months beyond it, the applicant was not suffering from osteoarthritis of the hips. It is said to have developed only much later, possibly as late as 2004 or 2006, but, at any rate, after 1 December 1988. It was only then that liability attached under s 24 to pay compensation in respect of any injury that under that section could be said to “result in a permanent impairment”.
29. As Burchett J recognised in his reasons in the Federal Court in Brennan v Comcare[10]:
“Returning then to s 24, it seems quite clear that s 124 applies without difficulty to a case where a person injured before the commencing date did not suffer an immediate impairment, but the injury resulted in one after the commencing date.”
Ryan J (at 622) agreed with those reasons; and at 619, Gummow J said[11]:
“As Burchett J points out in his judgment on the present appeal, s 24 imposes a liability upon Comcare where an injury results in a permanent impairment.”
[10] (1994) 122 ALR 615 at 619.
[11] (1994) 122 ALR 615 at 619.
30. The only other potential cause for concern arises from s 124(1A) of the 1988 Act. We have already noted Gummow J’s reference to its “obscurity”. What it says is that:
“Subject to this Part, a person is entitled to compensation under this Act in respect of an injury…suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury…under the 1971 Act.”
The subsection is facultative in the sense that it confers a right to compensation “if compensation was, or would have been, payable…”. The expression “was payable” is clear enough in its meaning. The only doubt concerns the phrase “if compensation would have been payable”. It predicates a hypothetical state of affairs. In such a context, the phrase is a not uncommon legislative drafting technique. Perhaps the most notorious instance of its use has been the legislation providing for third party claims by defendants for indemnity or contribution from joint tortfeasors. The statute in that case, which was in a common form in England and Australia, declared that contribution was recoverable from any other tortfeasors “who is, or would if sued have been, liable in respect of the same damage”. In Brambles Constructions Pty Ltd v Helmers[12], the High Court held that the words quoted were to be construed as importing no temporal connotation; so that it did not matter that at the date at which the third party claim was made the limitation period had run in respect of a claim by the plaintiff against the third party. In Brambles, all of their Honours approved the decision in Harvey v R G O’Dell Ltd[13], in which McNair J held that the words “if sued” in the statutory context were to be understood as meaning “would, if sued at any time, have been liable”[14]. The problem in that case was that the third party had died, and a particular requirement of other legislation enabling proceedings to be brought against a deceased tortfeasor or his estate required that proceedings be taken within six months after probate or letters of administration had issued. The defendant’s third party claim for contribution was not made until some years after letters of administration were granted in respect of the deceased estate of the putative joint tortfeasor. That was held to be no obstacle to the defendant’s claim for contribution in that case.
[12] (1966) 114 CLR 213.
[13] [1958] 2 QB 78.
[14] [1958] 2 QB 78 at 109.
31. Both McNair J in Harvey v O’Dell[15], and Owen J in Brambles Constructions v Helmers[16], spoke of the proceedings envisaged by the phrase “if sued” as “hypothetical” proceedings. Another illustration of the use of a similar drafting technique is found in the provisions of the Admiralty Act 1988 (Cth) regulating proceedings in rem in Admiralty against a surrogate or “sister” ship owned by a “relevant person”, defined to mean a person who “would be” liable on a claim in a proceeding commenced as an action in personam. In Owners of “Iran Armanat”v KMP Coastal Oil Pte Limited[17], their Honours spoke of this as predicating a “putative” or “hypothetical”, and not an actual, liability. Yet another example is the definition of “contributory” in successive British and Australian Companies Acts, which was interpreted to mean “every person who would be liable to contribute in any possible event under the Act”, and so as including someone who was not liable to contribute because his shares were fully paid up: see Re Phoenix Oil v Transport Co Ltd[18]. In that instance there was, in the events that had happened, not even a hypothetical liability to contribute.
[15] [1958] 2 QB 78 at 109.
[16] (1966) 114 CLR 213 at 223.
[17] (1999) 196 CLR 130 at 137, 138.
[18] [1958] ch 560 at 564.
32. In s 124(1A) of the 1988 Act the words “if compensation was, or would have been, payable” are, it was submitted by Ms Scott-MacKenzie, capable of being read as if followed by the words “if a claim had been made under the 1971 Act”. This would be consistent with the interpretative approach adopted in Harvey v O’Dell and the other authorities referred to here. It would follow, as we consider is the case, that s 124(1A) is satisfied if a claim for compensation, had it been made, would have been payable under of the 1971 Act even if in fact it had, as here, not been so made. It is concerned with a hypothetical not actual liability to pay. It is plain that “would have been payable” refers to something other than “was payable”, which is covered by the first of the two alternatives in s 124(1A). This therefore is the function of s 124(1A), and so provides a reason for its specific incorporation in s 124.
33. Approached in this way, we do not consider that, in order to establish his claim under the 1988 Act, it is necessary for the applicant to demonstrate that he satisfied the requirements of s 54 of the 1971 Act, which, on the face of it, he plainly did not. For the same reason, it is not necessary for him to show that under s 54(6) of the 1971 Act there is no prejudice to the respondent through his failure to serve a sufficient claim under that subsection. That element (no prejudice to the Commonwealth) is in any event only one of the two alternatives in s 54(6) afforded an errant claimant for escaping the requirements of s 54(1) of the 1971 Act, the other being failure to comply with those requirements “from ignorance, from a mistake or from any other sufficient cause”. We are reminded to say that, as we have already observed, Mr Clark retains the right at a future hearing to cross-examine the applicant about these issues.
34. There is, however, one further aspect that merits comment now. It arises out of s 99 of the 1971 Act. Without setting out the provisions of that section in full, it is enough to say that its effect was to require a claimant to bring into account, against the amount of any compensation payable for injury under the 1971 Act, the amount of any damages recovered by the claimant from any other person. Mr Clark complains that had the applicant’s present claim for compensation been made in proper time, it would have been possible to investigate more thoroughly the components of the sum of $33,000 recovered from Mr Dunley. As things are now, the “all-up” settlement sum appears simply as the combined product of what were no doubt a number of different and unspecified amounts and factors, which include, for example, legal costs, possible reduction on account of contributory negligence, and so on.
35. There are at least two possible responses to the complaint that through the passage of time since 1985 the respondent is prejudiced by being confronted now by an indivisible sum of $33,000, which might previously have been open to analysis and investigation by cross-examination or otherwise. The first response is that, back in 1985, it was the invariable practice of solicitors acting for plaintiffs in personal injury actions to ensure that the sum ultimately agreed and paid by way of settlement was as inscrutable as it was possible to make it. The purpose was to deter the revenue authorities from claiming taxation on items capable of being identified with damages awarded as compensation for lost income. The practice is discussed by Professor Luntz in the second edition of his Assessment of Damages for Personal Injury and Death[19]. It nevertheless remains true that Mr Clark is entitled to try his hand at questioning the applicant about the $33,000 settlement sum.
[19] Luntz, H Assessment of Damages for Personal Injury and Death (2nd ed, 1983) paragraph 5.6.04, 367.
36. The second response is one of pure law. Section 48 of the 1988 Act contains a series of provisions designed to replace s 99 of the 1971 Act by a somewhat similar section concerning the recovery of damages in respect of an injury for which compensation is payable under the 1988 Act. It is however not necessary here to discuss the application of s 48 to the settlement sum of $33,000 recovered by the applicant in 1985. The reason is that s 124(11) of the 1988 Act states quite explicitly that s 48 “does not apply where the damages referred to in that section were recovered before the commencing day” of 1 December 1988. In this instance they were. That being so, it is, as Ms Scott Mackenzie submits, difficult to see the relevance of any possible cross-examination that might be directed to showing prejudice to the respondent arising out of the receipt of that sum as long ago as 1985.
37. Turning to the decision of the delegate dated 11 September 2007, there are several things about it that we do not find satisfactory. We have already mentioned that the decision-maker appears to have thought that it was s 29 of the 1971 Act that applied, whereas it was concerned with disease, not injury. Some of the material now before us appears not to have been provided to the delegate who made the decision on 11 September 2007; if it was, he did not give sufficient attention to it. For example, in considering the lateness of the claim 24 years after the accident, he notes that the applicant’s solicitor submitted that the “you” [applicant] “did not initially appreciate the severity of your injuries”. This explanation was rejected on the ground that “you had undergone surgery in 1982 and were pursuing legal action in 1985”. January 1985 was, of course, when the action was settled. The delegate then says he does not accept that “you [the applicant] considered your injuries minor at the time”, and therefore does not consider that you had “other reasonable cause” for not submitting a compensation claim in time.
38. This statement displays considerable confusion. The surgery in 1982 was related to the knee joint not to the applicant’s fractured pelvis or the osteoarthritis that has now developed in his hips. As to the pelvis, there is a specialist medical report dated 9 June 1982 (T6 at 48) that records, “the pelvic fracture is completely pain free now and may be ignored”. It is therefore not at all surprising that the applicant thought no more about it within the period prescribed in s 54(3). In addition, in considering “whether the Commonwealth has been prejudiced by delay in lodgement of the claim”, the decision-maker says that “it prevents the Commonwealth from obtaining evidence from independent witnesses as to when you were required for duty after the accident and obtaining police reports from that time”. But it is hard to see that the police reports could do any more than confirm that the collision took place when and how the applicant says it did. It can scarcely be in dispute. There is an Army report dated on about 12 July 1982 (T75) in which the applicant gives a brief account of the collision. It is signed by a Warrant Officer, who says he believes the statement by the applicant to be true and correct. It was confirmed by Major Maber, saying “the circumstances are as stated above”. What more is required to prove that the applicant suffered a broken pelvis at the time in question? Only the medical and hospital records, of which there are many in evidence.
39. The other point mentioned about witnesses as to “when the applicant was required for duty after the accident” does not appear, if read literally, to be relevant at all. The real question is the meaning of the “days” of leave granted in exhibit 3, which we have already dealt with earlier in our reasons, as we also have in relation to the inability of the Commonwealth to establish the components of the settlement amount that was agreed on in 1985. Finally, Dr Purssey’s reporting of a link between the 1982 injury and the applicant’s current condition is dismissed as being of “no consequence” because the injury received in 1982 was in “non compensable circumstances”.
40. It is impossible to avoid the conclusion that the decision under review is affected by these and perhaps other misconceptions of law and fact. It is therefore liable to be set aside.
41. It is unnecessary, however, for us to determine matters other than those of jurisdiction at this stage. We are satisfied that the Tribunal has jurisdiction to hear the application to review the reviewable decision.
42. There are several courses that the application might now follow. Three come readily to mind:
· the matter might simply be referred to the Tribunal’s conference processes, with a view to listing the matter for hearing in the ordinary course; or
· under s 42D of the Administrative Appeals Tribunal Act, we might remit the matter to the decision maker for reconsideration; or
· we might set aside the reviewable decision using the powers in s 43 of the AAT Act, again remitting the matter with directions or recommendations.
43. As we have not canvassed these alternatives with the parties, we propose to list the matter for a Directions Hearing so that the parties may make submissions with respect to the further conduct of the matter.
I certify that the 43 preceding paragraphs are a true copy of the reasons for the decision herein of Honourable Dr B H McPherson CBE Deputy President and Senior Member
MJ CarstairsSigned: .....................................................................................
E. Young, Research AssociateDate/s of Hearing 27 March 2008
Date of Decision 24 April 2008
Counsel for the Applicant Ms S Scott-Mackenzie
Solicitor for the Applicant Slater and Gordon
Counsel for the Respondent Mr C Clark
Solicitor for the Respondent Australian Government Solicitor
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