Reitano, Frederick Victor v The Commonwealth of Australia

[1982] FCA 242

Re: FREDERICK VICTOR REITANO
And: THE COMMONWEALTH OF AUSTRALIA
No. Qld.G97 of 1982
Administrative law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Fitzgerald, J.

CATCHWORDS

ADMINISTRATIVE LAW - Appeal from Administrative Appeals Tribunal - Compensation (Commonwealth Government Employees) - Refusal to redeem liability to pay compensation by payment of a lump sum - Refusal upheld by A.A.T. - Error of law.

WORKERS' COMPENSATION - Application to have liability to pay compensation redeemed by payment of a lump sum - evidence that Applicant may no longer be incapacitated - foreshadowed application by employer for reconsideration of entitlement to compensation - both applications remitted back to the Commissioner for Employees' Compensation.

Administrative Appeals Tribunal Act, 1975, ss. 43(1), 44, 45

Compensation (Commonwealth Government Employees') Act, 1971, ss. 20(4), 46(2), 49.

HEARING

BRISBANE

#DATE 27:10:1982

ORDER

1. The appeal be allowed;

2. the Respondent pay the Appellant's taxed costs of and incidental to these proceedings;

3. the decision of the Administrative Appeals Tribunal to affirm the decision of the Commission for Employees' Compensation, that the Applicant's request made under s.49 of the Compensation (Commonwealth Government Employees') Act 1971 to have payments of compensation in respect of his partial incapacity redeemed by payment to the applicant of a lump sum be refused, be set aside;

4. the decision of the Commissioner for Employees' Compensation to refuse the Applicant's request made under s.49 of the Compensation (Commonwealth Government Employees') Act 1971 to have payments of compensation in respect of his partial incapacity redeemed by payment to the applicant of a lump sum be set aside;

5. the matter be remitted to the Commissioner for Employees' Compensation to reconsider the applicant's request made under s.49 of the Compensation (Commonwealth Government Employees') Act 1971 to have payment of compensation in respect of his partial incapacity redeemed by payment to him of a lump sum, and the determination of 3 April 1981 of a delegate of the Commissioner that the applicant is entitled to compensation from 1 September 1980 until a date to be determined by the Commissioner or his Delegate of payment of $105.00 per week in respect of compensation for partial incapacity.

JUDGE1

On 7 March 1980, the Commissioner for Employees' Compensation determined under the Compensation (Commonwealth Government Employees) Act 1971 the Attorney-General's Department was not liable to pay compensation in respect of Mr Reitano's incapacity for work since 4 February 1980.

On 17 February 1981, the Commonwealth Employees Compensation Tribunal set aside that determination and remitted the matter to the Commissioner for Employees' Compensation with the direction that after 4 February 1980 Mr Reitano has been partially incapacitated and entitled to an amount for the time being prescribed by the relevant provisions of the Act.

On 3 April 1981 the Delegate of the Commissioner for Employees' Compensation determined, in accordance with the Act and the Tribunal's determination, that:

". . . in accordance with the provisions of sub-s. 46(2)(a) of the said Act, the said Frederick Victor Reitano is entitled to the payment of compensation of $90 per week from 5 February 1980 to 31 August 1980, both dates inclusive and $105 per week from 1 September 1980 until a date to be determined by the Commissioner or his Delegate."

Neither party disputed before the Administrative Appeals Tribunal, or this Court, that, by reason of the retrospective entitlement to compensation for partial incapacity for work given to Mr Reitano by that direction, payments of compensation were to be treated as having been made from the commencement of the period of entitlement, that is, from 5 February 1980.

Accordingly, it was common ground that, by 30 April 1981, payments of compensation have been made to Mr Reitano under s.46 of the Act for a continuous period of more than six months notwithstanding that the date of the determination of the Delegate of the Commissioner for Employees' Compensation was 3 April 1981. Sub-section 49(1) of the Act provides as follows:

"Subject to this section, where payments of compensation in respect of an injury have been made to an employee under section 46 for a continuous period of not less than six months, the employee may request the Commissioner in writing that the liability of the Commonwealth to make further payments to the employee under that section be redeemed by the payment to the employee of a lump sum."

On 30 April 1981, the applicant's then solicitors made a request in writing to the Commissioner on behalf of Mr Reitano that the liability of the Commonwealth to make further payments of compensation for partial incapacity for work to Mr Reitano under s.46 be redeemed by the payment to Mr Reitano of a lump sum.

Although it was submitted for the Commonwealth that sub-s. 49(5) of the Act, which I set out below, assumes permanent partial incapacity, I did not understand it to be submitted that no order for lump sum redemption could be made in respect of the compensation payments payable under the determination of 3 April 1981.

The Commissioner for Employees' Compensation arranged for Mr Reitano to be medically examined by Dr Miles Murphy, a specialist physician in Brisbane, and received a report dated 22 July 1981. Purporting to rely on Dr Murphy's report, the Commissioner rejected Mr Reitano's application on the basis that he was not satisfied that the personal injury which Mr Reitano had sustained, namely hypertension, in respect of which the Attorney-General's Department was liable to pay compensation for his partial incapacity, was not likely to result in him becoming totally incapacitated for work: see sub-s. 49(5), para (a).

Following the formal determination of the Commissioner for Employees' Compensation on 14 January 1982, Mr Reitano made an application to the Administrative Appeals Tribunal on 9 February 1982 for a review of the Commissioner's determination refusing his request that the liability of the Commonwealth to make further payments in respect of his partial incapacity under s.46 be redeemed by a payment to him of a lump sum under s.49. The Commonwealth did not attempt to sustain before the Administrative Appeals Tribunal the opinion of the Commissioner for Employees' Compensation that Mr Reitano's condition was likely to result in total incapacity. Further, the learned Senior Member of the Administrative Appeals Tribunal before whom the matter came was plainly of the view that the determination of the Commissioner for Employees' Compensation was incorrect. That being so, it fell to the Administrative Appeals Tribunal, as it recognised, to decide what was the right or preferable decision having regard to the relevant facts and evidence before it and the provisions of the Act.

The Tribunal referred in this connection to s.43 of the Administrative Appeals Tribunal Act 1975 and Drake v. Minister for Immigration and Ethnic Affairs (1979) 24 A.L.R. 577. It noted that sub-s. 49(3) of the Act required a determination of whether the liability of the Commonwealth was to be redeemed by the payment to Mr Reitano of a lump sum and, if so, the amount of the lump sum, and set out sub-s. 49(5) of the Act which provides:

"The Commissioner shall not make a determination that the liability of the Commonwealth to make further payments to an employee under section 46 is to be redeemed unless he is satisfied that -

(a) the injury is not likely to result in the employee becoming totally incapacitated for work;

(b) the employee intends to use the lump sum in a manner that is particularly advantageous to the employee; and

(c) in all the circumstances it is desirable in the interests of the employee that the liability of the Commonwealth be redeemed.

The amount of any lump sum is required to be calculated in accordance with sub-s. 49(4) of the Act.

The learned Senior Member of the Administrative Appeals Tribunal said that he was satisfied that each of the matters referred to in sub-s. 49(5) of the act was established, but further said that the exercise of the discretion where the liability of the Commonwealth was to be redeemed upon payment of a lump sum which was given by sub-s. 49(3) of the Act was not limited to the matters referred to in sub-s. 49(5). The view was expressed that the negative form in which sub-s. 49(5) is stated reinforces the conviction that sub-s. 49(3) is discretionary and that an employee is not entitled as of right to redemption merely because the provisions of sub-s. 49(5) are satisfied. It was said that the discretion was to be exercised:

". . . in accordance with the express dictates of Parliament laid down in s.20(2) of the Compensation Act and having regard to the scope and object of the Act (Water Conservation and Irrigation Commission v. Browning (1947) 74 C.L.R. 492)."

The Tribunal did not seek to lay down an exhaustive definition of the matters relevant to the exercise of the discretion which it considered to exist under sub-s. 49(3), but expressed the opinion that, at a general level, regard should be had as to whether, by exercising the discretion in a particular case, ends or objects which are comfortable with the scope and purpose of the Act would be achieved or frustrated. A comparison was invited with Re Ivovic and Director-General of Social Services (1981) 3 A.L.N. 95, n.61. Further, the Administrative Appeals Tribunal said that:

". . . the relevant considerations must include the question whether or not the condition giving rise to the applicant's entitlement to partial incapacity payments has so stabilised as would be likely to continue and be capable of quantification having regard to the matters required to be taken into account in subsection 49(4) of the Act in determining the amount of any lump sum or redemption (Hatton v. Victoria Railways Commissioners (1935) V.L.R. 33)."

In my opinion there is no need to comment on the correctness of these views in this case.

The Administrative Appeals Tribunal had before it not only Dr Murphy's report but also evidence which he had given before the Tribunal, which might support an attempt by the Commonwealth to establish that Mr Reitano is no longer entitled to payment of compensation for partial incapacity for work. The Tribunal was informed that the Commonwealth felt encouraged by Dr Murphy's evidence to request a re-consideration of Mr Reitano's entitlement subject to the outcome of Mr Reitano's present application for lump sum redemption. In this regard the Tribunal noted that the determination of 3 April 1980 was expressed to apply only "to a date to be determined by the Commissioner or his Delegate" and that there was nothing in the decision of the Commonwealth Employees' Compensation Tribunal leading to that determination which went beyond a finding that Mr Reitano's work-caused partial incapacity was continuing at the date of the decision of 17 February 1981, a date anterior to the examination of Mr Reitano by Dr Murphy.

After noting Mr Reitano's protest that the Commonwealth had had ample opportunity to apply for reconsideration and that his application for redemption of the Commonwealth's liability should not be frustrated by the possibility of an application by the Commonwealth in the future for a re-consideration, the Administrative Appeals Tribunal stated its conclusion in the following paragraph:

"Having considered very carefully the arguments which Mr Reitano very ably advanced on his own behalf, I have nevertheless reached the conclusion that the proper exercise of the discretion conferred by s.49(3) of the Act requires that I should refuse Mr Reitano's application at this stage. In doing so I make it plain that I make no findings of fact in respect of Dr Murphy's evidence or in respect to the applicant's continuing compensibility. However, given the very difficult questions which arise in determining the extent to which a person's employment may be a contributing factor to the long term aggravation of his hypertension (see Re Pengelly and Commonwealth of Australia, No. V81/287) given that it is now over 4 years since the applicant, by retiring, removed himself from the immediate stressful effects of that work, given that his hypertension is presently well controlled and given the views expressed by Dr Murphy particularly in his evidence, it would, in my view, be premature to make a determination for redemption at this stage. The applicant's entitlement to weekly payments will, of course, continue in accordance with the terms of the determination dated 3 April 1981."

Mr Reitano has appealed to this Court. He seeks orders that his request under s.49 of the Act to have payments of compensation in respect to the partial incapacity redeemed by payment to him of a lump sum be granted and that the Court determine the lump sum to be paid to him in accordance with his entitlement at law.

The grounds of his appeal are that:

"The Tribunal erred in respect to the following questions of law:-

(a) the Tribunal failed to base the exercise of its discretion upon the evidence presented to it and the findings of fact made by it;

(b) the Tribunal based the exercise of its discretion and its consequent finding upon irrelevant factors and/or propositions not proved in evidence and/or contrary to evidence and/or propositions not accepted as findings of fact by the Tribunal, namely:-

(i) That very difficult questions arise in determining the extent to which a person's employment may be a contributing factor to the long term aggravation of his hypertension;

(ii) That it is now over four (4) years since the Applicant, by retiring, removed himself from the immediately stressful effects of his former employment;

(iii) That the Applicant's hypertension is presently well-controlled;

(iv) the views expressed by Dr Murphy particularly in his evidence."

According to Mr Reitano, if the tribunal had properly exercised its discretion based on the evidence before it, it would have allowed his application.

The real difficulty seems to me to stem from the fact that, as the Administrative Appeals Tribunal noted, in the proceedings before it Mr Reitano concentrated on demonstrating that the basis upon which the Commissioner for Employees' Compensation had rejected his redemption request was erroneous. Further, although it foreshadowed an application directed to the termination of Mr Reitano's partial incapacity period compensation payments, no such application had been made by the Commonwealth at the time the matter was before the Administrative Appeals Tribunal. Accordingly, Dr Murphy's report and evidence were primarily directed to the question of whether or not Mr Reitano's injury was likely to result in his becoming totally incapacitated for work. Dr Murphy was called upon to assume Mr Reitano's partial incapacity, and his evidence touched only incidentally upon whether or not Mr Reitano continued to be partially incapacitated for work, a matter upon which there was no other acceptable evidence. That issue was at least faintly raised but never joined by the parties before either the Administrative Appeals Tribunal or the Commissioner for Employees' Compensation.

The power of the Administrative Appeals Tribunal is a power of review and thus it may well be that it could not have reconsidered the determination of 3 April 1981 in the present proceedings: cf. Roidoulis v. Australian Postal Commission, unreported judgment of Keely J., 16 April 1981, and Commonwealth of Australia v. Hawkins, unreported judgment of Keely J., 22 April 1981. It, of course, does not follow that an application for lump sum redemption could not or ought not be dismissed if it appeared either from the evidence before either the Commissioner or the Administrative Appeals Tribunal that an applicant for redemption no longer had a work-caused partial incapacity. Whether or not the considerations in sub-s. 49(5) of the Act should otherwise be considered exhaustive of the matters relevant to the exercise of the discretion to grant or refuse redemption, there is, to my mind, much to be said for the proposition that, at least in a case such as this, having regard to the determination of 3 April 1981, it would justify refusal of redemption if it were established that the applicant no longer had a work-caused partial incapacity. The submissions for the Commonwealth implicitly assume to the contrary. That seems to me both inconsistent with its submissions that the relevant considerations were not limited to those in sub-s. 49(5) of the Act and in conflict with the position with which it would wish to support, namely, the dismissal of the application for redemption. The Commonwealth had neither applied for a re-consideration of Mr Reitano's partial incapacity entitlement or proved that he no longer had a work caused partial incapacity.

The Administrative Appeals Tribunal said it made no findings of fact in respect of Mr Reitano's continuing compensability on the basis that he continues to be partially incapacitated. I think that it meant that it could not do so by reason of the way in which the proceedings had been conducted and having regard to the material available.

Further, had it attempted to do so, quite apart from any question of its power, it seems to me that Mr Reitano might well have been disadvantaged by being deprived of an opportunity to produce his own medical evidence. It may reasonably be assumed that he would have complained had the Administrative Appeals Tribunal concluded in such circumstances that he no longer continues to be entitled to compensation because he is no longer partially incapacitated.

The question which falls for decision therefore is, what should have been done by the Administrative Appeals Tribunal in such circumstances. While there is something to be said for the view that there was no reason to refuse the application for redemption in view of the Commonwealth's failure to establish that Mr Reitano was no longer partially incapacitated for work, I am not prepared to say that the Administrative Appeals Tribunal was incorrect in not taking that course in view of the doubt which it seems to have felt as to that question as a result of Dr Murphy's evidence.

Regrettably, however, I do not think that the course which the Administrative Appeals Tribunal followed was satisfactory. The affirmation by the Administrative Appeals Tribunal of the decision which it was called upon to review left standing the refusal of Mr Reitano's application for lump sum redemption without any full consideration of the merits, and, indeed, with Mr Reitano having succeeded on every question in fact litigated. It is no answer that the effect of the Administrative Appeals Tribunal decision was not finally to shut out Mr Reitano, particularly since no time or other limitation was placed upon any obligation by the Commonwealth to carry out its threat to seek a reconsideration of Mr Reitano's entitlement to compensation. There was no reason to leave it to Mr Reitano to make a fresh application for redemption in the event that the Commonwealth did not apply for a reconsideration.

In my opinion, the course followed by the Administrative Appeals Tribunal in upholding the decision to refuse lump sum redemption for the reasons given involved an error in law. No proper basis existed in law for that course.

If the Tribunal considered that it could not or should not enter upon the question of whether Mr Reitano is still partially incapacitated, it should have set aside the decision to refuse redemption, which was admittedly founded on a misconception, and remitted the matter to the Commissioner for Employees' Compensation with a direction that he reconsider whether or not Mr Reitano continues to be partially incapacitated and entitled to compensation: see para. 43(1)(b) of the Administrative Appeals Tribunal Act and para. 20(4)(a) of the Compensation (Commonwealth Government Employees) Act. The latter provision provides:

"20(4) Where a determination has been made under this Act -

(a) the Commissioner may, of his own motion, whether or not the proceeding has been instituted or pleaded under Part V in respect of the determination, reconsider a determination and may, if he thinks fit, make a determination varying or revoking the first mentioned determination. . . . "

It was in my opinion plainly within the power of the Administrative Appeals Tribunal to remit the matter to the Commissioner for Employees' Compensation and direct him to reconsider it under para 20(4)(a) of the Compensation (Commonwealth Government Employees) Act.

The order of the Court is that the appeal be allowed and that the respondent pay the appellant's taxed costs of and incidental to these proceedings.

Pursuant to s.44 of the Administrative Appeals Tribunal Act, the Court orders that the decision of the Administrative Appeals Tribunal to affirm the decision of the Commissioner for Employees' Compensation, that the applicant's request made under s.49 of the Compensation (Commonwealth Government Employees) Act 1971 to have payments of compensation in respect of his partial incapacity redeemed by payment to the applicant of a lump sum also be set aside.

The Court further orders that the matter be remitted to the Commissioner for Employees' Compensation in respect of his partial incapacity redeemed by payment to him of a lump sum, and the determination of 3 April 1981 of a delegate of the Commissioner that the applicant is entitled to compensation from 1 September 1980 until a date to be determined by the Commissioner or his Delegate of payment of $105.00 per week in respect of compensation for partial incapacity.