Risson and Comcare

[2004] AATA 233

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 233

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2002/1217

GENERAL ADMINISTRATIVE DIVISION

Re:         RONALD GILBERT RISSON

Applicant

And:COMCARE

Respondent

DECISION

Tribunal:       G.D. Friedman, Member

Date:             4 March 2004

Place:            Melbourne

Decision:The Tribunal refuses the respondent’s application under s 42B of the Administrative Appeals Tribunal Act 1975 that the claim be dismissed as frivolous or vexatious.  

(sgd) G.D. Friedman

Member

COMPENSATION - jurisdiction - claim for asbestos-related condition - compensation not payable when damages recovered - whether claim frivolous or vexatious  

Administrative Appeals Tribunal Act 1975

Safety, Rehabilitation and Compensation Act 1988 ss24, 25, 27, 28, 44, 45, 48

Safety Rehabilitation and Compensation and Other Legislation Amendment Act 2001

Cooper v Comcare (2002) 118 FCR 157

Fisher v Hebburn Limited (1960) 105 CLR 188

Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 119 ALR 629

Lee v Secretary, Department of Social Security (1996) 68 FCR 491

Slattery v Comcare (1996) 70 FCR 131

REASONS FOR DECISION

4 March 2004  G.D. Friedman, Member

1.      This is an application by Ronald Gilbert Risson (the applicant) for review of a decision of a delegate of Comcare (the respondent) dated 17 October 2002.  The delegate revoked a determination dated 15 May 2002, as well as determinations dated 30 November 2000, 8 May 2001, 23 October 2001 and 15 February 2002, all dealing with the applicant’s claim for incapacity payments for pleural and pulmonary asbestosis.  

2.      At the hearing on 29 September 2003 and 22 January 2004, Mr S. McCredie of counsel represented the applicant and Mr J. Lenczner of counsel represented the respondent.

3. The Tribunal received into evidence the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (the AAT Act) (T1-T40), together with five exhibits (Exhibits R1 to R5) tendered by the respondent.

BACKGROUND

4.      The applicant was born on 29 September 1950.  In 1994 he commenced action against the Commonwealth, in the Supreme Court of Victoria, for recovery of damages for injuries sustained as a result of exposure to asbestos, while serving in the Royal Australian Navy (the navy) on HMAS Parramatta and HMAS Melbourne between 1968 and 1972.

5.      In October 1997 the Supreme Court proceedings were settled.  Under the terms of the Release the applicant accepted the sum of $100,000 for “…general damages…inclusive of any amounts to be repaid to the Health Insurance Commission”.  On 1 June 2000 the applicant lodged a claim for compensation under the Safety, Rehabilitation and Compensation Act 1988 (the Compensation Act), for injury or disease arising from exposure to asbestos during his navy service. On 30 November 2000 the respondent determined that the applicant had contracted benign fibrous pleural plaques - both lungs, a disease to which his military service had contributed.  On 8 May 2001 the respondent determined that the applicant was not entitled to incapacity payments for the condition because incapacity was caused by post traumatic stress disorder, which was not compensable.

6.      On 23 October 2001 the determination dated 30 November 2000 was varied to provide that the applicant had contracted pleural and pulmonary asbestosis (the condition), a disease to which his military service had contributed.  On 15 February 2002 the respondent revoked the determination dated 8 May 2001 and substituted the decision that the applicant was entitled to weekly benefits.  On 17 October 2002 the respondent revoked the earlier determinations and decided that the applicant was not entitled to compensation for the condition under the Act.

7.      On 11 November 2002 the applicant lodged an application with the Tribunal for review of the reviewable decision dated 17 October 2002.

8.      The issue before the Tribunal is whether the application should be dismissed as frivolous or vexatious because the Tribunal has no jurisdiction to hear the application.   

CONSIDERATION OF THE ISSUES

9. Section 42B of the AAT Act provides that the Tribunal may dismiss an application at any stage of the proceeding, if satisfied that the application is frivolous or vexatious.

10. Section 44 of the Compensation Act provides:

44.(1)      Subject to section 45, an action or other proceeding for damages does not lie against the Commonwealth, a Commonwealth authority, a licensed corporation or an employee in respect of:

(a)an injury sustained by an employee in the course of his or her employment, being an injury in respect of which the Commonwealth, Commonwealth authority or licensed corporation would, but for this subsection, be liable (whether vicariously or otherwise) for damages; or

(b)the loss of, or damage to, property used by an employee resulting from such an injury; whether that injury, loss or damage occurred before or after the commencement of this section.

(2)          Subsection (1) does not apply in relation to an action or proceeding instituted before the commencement of this section.

(3)          If:

(a)an employee has suffered an injury in the course of his or her employment; and

(b)that injury results in that employee’s death;

subsection (1) does not prevent a dependant of that employee bringing an action against the Commonwealth, a Commonwealth authority, a licensed corporation or another employee in respect of the death of the first-mentioned employee.

(4)          Subsection (3) applies whether or not the deceased employee, before his or her death, had made an election under subsection 45(1).

11.     As discussed in Georgiadis v Australian and Overseas TelecommunicationsCorporation (1994) 119 ALR 629, until this provision was introduced into the Compensation Act in 1988, Commonwealth employees were entitled to workers compensation payments, and where negligence was established, were also entitled to maintain an action at common law. After 1988 the Compensation Act extinguished the right of a Commonwealth employee to sue for common law damages.

12. Section 45 of the Compensation Act provides an exception to that extinction:

45.(1)      Where:

(a)compensation is payable under section 24, 25 or 27 in respect of an injury to an employee; and

(b)the Commonwealth, a Commonwealth authority, a licensed corporation or another employee would, but for subsection 44(1), be liable for damages for any non-economic loss suffered by the employee as a result of the injury; the employee may, at any time before an amount of compensation is paid to the employee under section 24, 25 or 27 in respect of that injury, elect in writing to institute an action or proceeding against the Commonwealth, the Commonwealth authority, the licensed corporation or other employee for damages for that non‑economic loss.

(2)          Where an employee makes an election:

(a)subsection 44(1) does not apply in relation to an action or other proceeding subsequently instituted by the employee against the Commonwealth, the Commonwealth authority, the licensed corporation or the other employee for damages for the non-economic loss to which the election relates; and

(b)compensation is not payable after the date of the election under section 24, 25 or 27 in respect of the injury.

(3)          An election is irrevocable.

13. Section 48 of the Compensation Act provides:

48.(1)      This section applies where:

(a)an employee recovers damages in respect of an injury to the employee or in respect of the loss of, or damage to, property used by the employee, being an injury, loss or damage in respect of which compensation is payable under this Act; or

(b)damages are recovered by, or for the benefit of, a dependant of a deceased employee in respect of the death of the employee and compensation is payable under this Act in respect of the injury that resulted in that death.

…

(4)          Compensation is not payable under this Act to the employee in respect of the injury, loss or damage, or to, or for the benefit of, the dependant in respect of the injury that resulted in the death of the employee, after the date on which the damages were recovered by the employee or by, or for the benefit of, the dependant, as the case may be.

…

(5)          Subsection (4) does not apply if the damages were recovered:

(a)as a result of a claim, or fresh claim, made by Comcare under section 50 (whether or not that claim progressed to the formal institution of proceedings); or

(b)as a result of Comcare’s taking over the conduct of a claim under that section; or

(c)as a result of an action for non-economic loss; or

(d)by way of a settlement of such a claim or of such an action (whether or not that claim or that action progressed to the formal institution of proceedings).

14. The current provisions in s 48 were introduced into the Compensation Act as the result of amendments made by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001 No. 144, 2001 (the Amendment Act) and the amended section came into effect on 1 July 2002. Section 48(5)(c) and (d) previously provided as follows:

48(5)       Sub-section (4) does not apply where the damages were recovered:

(a)…

(b)…

(c)as a result of proceedings instituted by the employee as a result of an election by the employee under section 45; or

(d)by way of settlement of those proceedings.

15. The Amendment Act also introduced a definition not previously present in the Compensation Act, namely the definition of action for non-economic loss. The definition is as follows:

action for non-economic loss means any action…to recover an amount for damages for non-economic loss…

(a)that is taken by the employee against the employer…; and

(b)that follows an election made by the first-mentioned employee under subsection 45(1).

16. Mr Lenczner sought dismissal of the application for review under s 42B of the AAT Act. He said that, as a consequence of s 48(4) of the Compensation Act, the applicant is not entitled to seek compensation for economic loss and medical expenses, from the respondent, in respect of asbestosis. He stated that, in any event, the applicant did not exercise an election in writing as required by s 45 of the Compensation Act prior to the issue of the proceedings, noting that this was common ground between the parties.

17. Mr McCredie submitted that s 48 of the Compensation Act applies in this case, by reason of s 48(1), because the applicant is an employee who has recovered damages in respect of an injury compensable under the Compensation Act, including an injury that occurred before the commencement of the Compensation Act (Slattery v Comcare (1996) 70 FCR 131). He said that s 48(4) applies to the applicant (subject to s 48(5)) to provide that compensation is not payable under the Compensation Act, in respect of the injury to him, after the day on which damages were recoverable by the applicant under the Release. Mr McCredie noted that s 48(5) of the Compensation Act, as it now is, excludes the operation of s 48(4). He submitted, however, that the applicant‘s settlement of proceedings in October 1997 comes within s 48(5)(d) of the Compensation Act as being the settlement of an action for non-economic loss, so the bar to further entitlements under s 48(4) of the Compensation Act does not apply. Therefore, the applicant is entitled to exercise the jurisdiction of the Tribunal with respect to his claim.

18. Mr McCredie referred to the Release and stated that in his Amended Statement of Claim, in the Supreme Court proceedings, the applicant stated that he made no claim for economic loss but claimed for general damages only, so those proceedings and the Release were for non-economic loss only. With respect to s 48(5) of the Compensation Act, Mr McCredie said that the correct analysis of the effect of the amendment to s 48(5) is that, to the extent that the applicant seeks compensation arising before the commencement of s 48(5) as amended by the Amendment Act, the applicant is bound by the pre-existing terms of s 48(5).

19. Mr McCredie submitted that the event by which liability for weekly payments is incurred by the respondent, after the commencement of s 48(5), is incapacity after that date as a result of relevant injury. Similarly, the event by which liability for medical and like expenses incurred after the commencement of s 48(5) is medical and like treatment after that date as a result of the relevant injury (Fisher v Hebburn Limited (1960) 105 CLR 188 at 202‑203).

20. Mr McCredie submitted that in any event the legislative scheme provided by s 44 to s 48 of the Compensation Act was generally to prohibit claims for damages, except in prescribed circumstances. The prescribed circumstances included the requirement that any employee seeking damages, which were restricted to damages for non-economic loss (s 45(2)(a)), must make an irrevocable election under s 45. The provision was intended to be universal, applying to all employees except those referred to in s 44(2).

21. The Tribunal was told that the reference in s 48(5)(c), as it was prior to the Amendment Act, that the proceedings be instituted as a result of an election by the employee under s 45, or s 48(5)(d) by way of settlement of those proceedings, was intended to be adjectival rather than as inserting a condition to the operation of the provision. This is so since it was not intended as part of the scheme that employees covered by s 44(1) might otherwise be entitled to claim damages. An absurdity could otherwise arise in proceedings, where on behalf of a plaintiff it is alleged that an irrevocable election had been made and defended by the Commonwealth, on the ground that no such election had been made.

22. The Tribunal heard extensive submissions in regard to whether s 48, pre amendment or post amendment, should apply and concerning the retrospectivity of the new provision. Real issues remain in regard to these matters and in regard to the nature of the decision under review. While it is difficult to see how Mr McCredie’s argument concerning the interpretation of the current s 48(5)(d) can be sustained in light of the definition of action for non-economic loss introduced by the Amendment Act, the question of which provision should be applied is a key issue in this matter.

23.     The applicant seeks review of a reviewable decision that post-dates the Amendment Act, but at the heart of the matter is the claim made by the applicant on 1 June 2000, which has been reviewed by numerous decisions as set out above, some accepting the claim and others denying it.  It may be that issues arise in regard to this as were dealt with in Lee v Secretary, Department of Social Security (1996) 68 FCR 491. These and other matters were not addressed in submissions.

24.     As the Federal Court said in Cooper v Comcare (2002) 118 FCR 157, in regard to applications for dismissal of an application as frivolous or vexatious, there are good reasons, in other than clearly unmeritorious cases, to determine the application on the merits at a full hearing rather than in an action for dismissal.

25.     Therefore, the Tribunal does not accept that the application should be dismissed as frivolous or vexatious. 

DECISION

26. The Tribunal refuses the respondent’s application under s 42B of the Administrative Appeals Tribunal Act 1975 that the claim be dismissed as frivolous or vexatious.

I certify that the twenty-six [26] preceding paragraphs are a true copy of the reasons for the decision of

G.D. Friedman, Member

(sgd)       Catherine Thomas

Clerk

Dates of hearing:  29 September 2003

22 January 2004
Date of decision:  4 March 2004

Counsel for applicant:                  Mr S. McCredie

Solicitor for applicant:                  Clark & Toop Lawyers

Counsel for respondent:              Mr J. Lenczner
Solicitor for respondent:              Australian Government Solicitor