Riley, D.K. v Commission for the Safety Rehabilitation and Compensation of Commonwealth Employees

[1994] FCA 130

JUDGMENT No. .!A.Q ...... l .... 2.k

4

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) No. G323 of 1993

)

GENERAL DIVISION 1

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN :  DIANNE KERRI RILEY
Applicant

AND	COMMISSION FOR THE SAFETY REHABILITATION AND C O M P E N S A T I O N 0 F COMMONWEALTH EMPLOYEES
Respondent

CORAM:	Beaumont J.
DATE :	8 March 1994

MINUTE OF ORDERS

THE COURT ORDERS:

1.   Appeal against Order 2 made by the Tribunal allowed, with costs; set aside Order 2; in lieu thereof, order that respondent pay the applicant's costs pursuant to s.67(9) of the Act.

2.   Appeal against Order 1 made by the Tribunal is dismissed, with costs.

.

3.   Order that the parties are at liberty to set-off costs.

Settlement	and	entry of orders is dealt with in
Order 36 of	the	Federal Court Rules.

RECEIVED
10 MAR 1994
FEDERAL COURT OF

AUSTRALIA PRINCIPAL REGISTRY

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	) NO. G323 of 1993
)
GENERAL DIVISION	)

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:  DIANNE KERRI RILEY
Applicant

AND	COMMISSION FOR THE SAFETY REHABILITATION AND C O M P E N S A T I O N 0 F COMMONWEALTH EMPLOYEES
Respondent

CORAM:	Beaumont J.
W:	7 March 1994

REASONS FOR JUDGMENT (No. 1)

( A ~ ~ e a l aainst s.19i4) direction aiven bv the Tribunal

in its Order No. 11

This is an appeal on a question of law against an order of the Administrative Appeals Tribunal and a direction given at the time by the Tribunal in the following context; The applicant, Dianne Kerri Riley, applied to the Tribunal for

a review of a decision of the respondent, the Commissioner for	the Safety, Rehabilitation and Compensation of Commonwealth
Employees. The decision of the respondent was that liability to pay compensation under the provisions of the statute now
known as the Safetv, Rehabilitation and Com~ensation Act 1988,
(formerly the Commonwealth EmDloveeS Rehabilitation and Com~ensation Act 1988) ceased on 6 May 1991 because the applicant was no longer incapacitated for full-time normal duties from any work-related accident.
The background to the dispute was that the applicant submitted a claim for compensation on 13 September, 1988, in respect of a swollen right wrist, shoulder and arm, claiming that this condition had developed over a period of approximately two years while she was carrying out the duties involved in the gauging of shells at the facilities of the AD1 at St Marys. In the first instance, liability arising out of the claim was accepted and compensation was paid in respect of various periods thereafter. In July 1991, the applicant's condition was reviewed and it was then determined that the applicant was no longer prevented by the condition from resuming normal full-time duties as from 6 May 1991.
The primary decision was reviewed internally and affirmed on 2 September, 1991. Thereafter, review by the Tribunal was sought in accordance with the provisions of s.64 of the Safetv Com~ensation and Rehabilitation Act. In the reasons for its decision the Tribunal came to the conclusion
Tribunal accepted that there was a "slight residual area of that the reviewable decision should be set aside because the work-related incapacity".
There is no challenge by either party to this aspect of the Tribunal's reasons. It follows that the reviewable decision is set aside and nothing turns on this aspect of the matter for present purposes. However, in its reasons the Tribunal considered the operation of s.19(4) of the Safety Com~ensation and Rehabilitation Act. In its order, the Tribunal gave the following direction under that provision:

"1. The r ev i ewab le d e c i s i o n i s set a s i d e and the

m a t t e r i s r e m i t t e d t o the responden t for re-

d e t e n i n a t i o n	i n	accordance	w i t h	the	d i r e c t i o n
t h a t	the	a p p l i c a n t	c o n t i n u e s	to	be

i n c a p a c i t a t e d f o r work, b u t t h a t f o r the purposes o f s 19 of the A c t , the amount she i s a b l e t o e a r n i n s u i t a b l e employment i s t h a t which the employer o f f e r e d her for working 8 hour s pe r d a y i n the f u s e section and which she

f a i l e d t o a c c e p t . "

It appears that the possible application of s.19(4), which deals with the measure of compensation for injuries resulting in incapacity was dealt with in submissions before the Tribunal. In order to understand the context of this issue, which is the principal matter argued on the appeal, it is necessary to note the scheme of s.19.

By s.19(1), of section 19, it is provided that the
section applies to an employee who is incapacitated for work

as a result of an injury with certain exceptions not here

material. By S. 19(2), it is provided that Comcare is liable	to pay compensation to the employee in respect of the injury
in the period and in accordance with the formula there stated. By s.19(3), it is provided that Comcare is liable to pay to the employee in respect of the injury for each week during which the employee is incapacitated, other than a week referred to in sub-s.(2), compensation as there provided. As has been noted, s.19(4) is important for present purposes and its provisions are as follows:

" ( 4 ) In d e t e r m i n i n g , for the p u r p o s e s o f

s u b s e c t i o n s ( 2 ) and (3), the amount per week t h a t a n

employee i s a b l e t o e a r n i n s u i t a b l e employment ,

Comcare s h a l l h a v e r e g a r d to:

(a)	where the employee is in employment - the
amount per week t h a t the employee i s e a r n i n g i n

t h a t employment;

( b )	where , a f t e r becoming i n c a p a c i t a t e d for work,
the employee r e c e i v e d a n o f f e r o f s u i t a b l e
employment and f a i l e d t o a c c e p t t h a t o f f e r -
the amount per week t h a t the employee would be
e a r n i n g i n t h a t employment i f he or she were

engaged i n t h a t employment;

( c )	where , a f t e r becoming i n c a p a c i t a t e d for work,
the employee r e c e i v e d an o f f e r o f s u i t a b l e
employment and , h a v i n g a c c e p t e d t h a t o f f e r ,
f a i l e d t o engage , or t o c o n t i n u e t o engage , i n
t h a t employment - the amount per week t h a t the
employee would be e a r n i n g i n t h a t employment i f

he or she were engaged i n t h a t employment;

( d )	where , a f t e r becoming i n c a p a c i t a t e d for work,
the employee r e c e i v e d an o f f e r o f s u i t a b l e
employment on c o n d i t i o n t h a t the employee
c o m p l e t e d a r e a s o n a b l e r e h a b i l i t a t i o n or
v o c a t i o n a l r e t r a i n i n g program and the employee
f a i l e d t o f u l f i l t h a t condition - the amount

t h a t the employee would be e a r n i n g i n t h a t employment i f he or she were engaged i n t h a t

empl oymen t ;
( e )	where , a f t e r becoming i n c a p a c i t a t e d for work,
the employee h a s f a i l e d t o seek s u i t a b l e

employment - the amount per week t h a t , h a v i n g

r e g a r d t o the s t a t e o f the labour -marke t a t the

r e l e v a n t t i m e , the employee c o u l d r e a s o n a b l y be

e x p e c t e d t o e a r n i n s u c h employment i f he or

she were engaged i n s u c h employment;

( f ) where paragraph ( b ) , ( c ) , ( d ) or ( e ) a p p l i e s t o

the employee - w h e t h e r the e m p l o y e e ' s f a i l u r e

t o a c c e p t an o f f e r o f employment , t o engage , or

to	c o n t i n u e	t o	engage ,	i n	employment ,	t o
u n d e r t a k e ,	or	t o	c o m p l e t e ,	a	r e h a b i l i t a t i o n	or

v o c a t i o n a l r e t r a i n i n g program or t o seek

employment , a s the c a s e may be, was, i n

Comcare's o p i n i o n , r e a s o n a b l e i n a l l the

c i r c u m s t a n c e s ; and

( g ) a n y other m a t t e r t h a t Comcare c o n s i d e r s

re1 e v a n t . "

In its reasons the Tribunal made the following

observations and findings with respect to the operation of

s.l9(4)(b) of the Safetv Com~ensation and Rehabilitation Act:

"50. In determining the extent of compensation to which the applicant should be entitled, we consider that the provisions of S 19(4) (b) of che Safety Com~ensation and Rehabilitation Act are appropriate. In our view, the evidence shows that the applicant is perfectly capable of doing 8 hours work per day in the fuse section, whether or not she is capable of doing that work in the shell gauging section. She was offered employment for 8 hours per day, carrying out the lighter duties in the fuse section but seemed bent upon restricting her hours of work to 6 per day, in the face of almost all medical and other advice to the contrary. If there is residual incapacity, it relates only to the slightly heavier work to be found in the shell gauging section of ADI's operations. We find as a fact therefore that the amount per week which the applicant is able to earn in suitable employment is the amount per week that she would be earning if employed to work 8

hours per day in the fuse section. "

There was evidence before the Tribunal on the
question whether the applicant could work for eight hours per

day. There was also evidence that on the 31 July, 1991, and

that on 2 August, 1991, she worked for 2.5 hours only. This	on 1 August, 1991, the applicant worked for eight hours, but
work, the evidence disclosed, was undertaken as part of a rehabilitation program for the applicant.
However, there was also evidence before the Tribunal and it appears to be common ground that the applicant was not happy about undertaking a program which included a requirement by way of rehabilitation that she work for as long as eight
hours per day. She complained that her shoulder was sore and did not work eight hours per day beyond 1 August 1991. As a consequence, AD1 terminated her employment on 5 August 1991.
On behalf of the applicant it is submitted that there was as a matter of the true construction of section I

'-_,'	> . '	19(4) (b), neither an offer of employment nor a failure to accept that offer. Having regard to the dismissal of the applicant on 5 August 1991 it was said, in substance, that the offer should be deemed to be withdrawn by the fact of the dismissal.
I have difficulty in accepting the submission. It seems to me that whether an offer has been made within the meaning of s.l9(4)(b) is in substance a question of fact (cf. Claro v Minister for Immiaration. Local Government and Ethnic Affairs (1994) 119 ALR 342 at 351).
It is true that the offer was no longer subsisting once the dismissal took effect on 5 August 1991; however, this is not the point: the purpose and object of S. 19 (4) is the provision of a measure of economic loss in terms of assessing the earning capacity of the employee in suitable employment. In that connection it is provided that in certain circumstances, one looks at an offer of suitable employment and a failure to accept that offer, where s.19(4) (b) applies. As I have said, essentially these are matters of fact. It is no condition precedent to the operation of s.l9(4)(b) that the offer should continue for any particular period of time. Of course, the offer must be a bona fide and genuine one. It would not, for instance, be legitimate to have regard to an offer which was no more than a device used for the purpose of frustrating the evident object and purpose of s.19(4).
An alternative argument was advanced on behalf of the applicant that there was no evidence to justify the finding made in para.50 of the Tribunal's reasons that the
applicant "seemed ben t upon r e s t r i c t i n g h e r hours of work t o 6
p e r d a y i n t h e face o f almost a l l medical and o t h e r a d v i c e t o
t h e c o n t r a r y " .
It is said that there was no evidence that the applicant wished to restrict her hours to six per day. As I followed the argument, there was no substantial contest on so much of the finding as dealt with the medical and other advice
mentioned. In the course of the submissions, the argument was refined, as I followed it, to a contention that for the
purpose of s.l9(4)(b) in assessing whether there had been a failure to accept an offer, one could, as a matter of law, look at the objective situation and disregard the state of mind of the employee.
Again, as I followed the submission, I do not think that it was seriously contended, at least ultimately, that there was no material upon which the Tribunal could conclude that it was not the wish of the applicant to work more than six hours per day. Indeed, there appears to be quite a deal of evidence to that effect; such a view on the part of the applicant would, of course, be quite consistent with her case, that she was suffering from a work-related disability on a continuing basis. As I have said, that part of the Tribunal's reasoning is not challenged. In the submission put on behalf of the applicant, it was suggested that even if an employee evinces an intention and wish not to work more than six hours, one should ignore the indication of such an attitude, for the purposes of s.l9(4)(b) and instead one should focus upon the actual capacity of the employee; and if that actual capacity, on the expert evidence, involves an ability to work - in this case for eight hours per day - there is no failure to accept an offer in any relevant sense for the purpose of S. 19(4) (b) .

Again, I have difficulty in accepting this

analysis.

In my opinion, the failure to accept the offer

mentioned in S. 19(4) (b) , is in substance, a question of fact.

The offer could of course be accepted by conduct. It need not be accepted expressly, but whether express or implied there must be some basis for a conclusion that, as a matter of fact, the employee has accepted the offer. Where, as now appears to be common ground, the applicant has evinced an intention not to undertake the rehabilitation programme, insofar as that programme involves working more than six hours, it is difficult to see how it can be said that the employee has done any more than failed to accept an offer to work for eight hours.

It follows, in my view, that no error of law has been established in the approach taken by the Tribunal to the operation and meaning of s.l9(4)(b). As was pointed out in argument, it may be that the provisions of Section 19(4)(f) were apposite in the present case. However, I do not think that any material consequence follows for present purposes. It may have been open, in a hypothetical sense, to the applicant to argue that her failure to accept an offer of employment or to continue to engage in the employment was reasonable. But it does not appear that any such stance was taken before the Tribunal; in any event, the findings made by the Tribunal, in para.50 of its reasons, are inconsistent with

the potential operation of s.l9(4)(f) in the present case.

In my opinion, the appeal from Order 1 made by the

Tribunal fails.

I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of his Honour

Mr. Justice Beaumont.

Associate

Dated:  7 March 1994