Robinson and Military Rehabilitation and Compensation Commission
[2008] AATA 37
•15 January 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 37
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/2006 &
GENERAL ADMINISTRATIVE DIVISION ) 2007/2007 Re JASON ROBINSON Applicant
And
MILITARY REHABILITATION AND COMPENSATION COMMISSION
Respondent
DECISION
Tribunal Dr KS Levy, RFD, Senior Member Date15 January 2008
PlaceBrisbane
Decision The decisions 20 October 2006 and 31 January 2007 are affirmed.
................[Sgd]...........................
Senior Member
CATCHWORDS
COMPENSATION – ‘ability to earn’ – factors affecting interpretation – power to pay for attendance at medical examinations
Safety Rehabilitation and Compensation Act 1988 (Cwth) ss 19, 20, 57, 58
Financial Management & Accountability Act 1997(Cwth) s 44
Public Service Act and Regulations 1999 (Cwth)Taylor v Australian Postal Commission (2004) FCA 1265 at 9
Hooper v Comcare [(2001) AATA 548:33 AAR 326]
Drake v Minister for Immigration & Ethnic Affairs (1979) 24 ALR 577, 589
Comcare v Lees (1998) FCA 1144
CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384
Project Bluesky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355
Network Ten Pty. Limited v TCN Channel Nine Pty. Limited (2004) 205 ALR1
Bortolazzo v Comcare (1997) 75 FCR 395 at 388
Hardin v Comcare Australia (1997) AAT No.11727/97REASONS FOR DECISION
15 January 2008 Dr KS Levy, RFD, Senior Member INTRODUCTION
1. This is an application by Jason Robinson, a former member of the Royal Australian Army for review of two decisions applicable to him and made by the Military Rehabilitation Compensation Commission (MRCC), an element of the Department of the Veterans Affairs.
2. Mr Robinson enlisted in the Army in April 1995 and was discharged in 2003. During that service, he was employed in a Water Transport Unit. His discharge was due, in large part, to injuries he sustained to both of his knees when he was involved in a motorcycle accident on his way to work. It was a single vehicle accident and involved him colliding with a kangaroo. Following the accident, he had some restrictions on his employment within the Army and that caused some adjustment difficulties. Since his discharge, he has been involved in a business in North Queensland as an instructor in boat safety and operation and is an accredited licensing agent. He also provides training in Jet Ski operation as well as courses in radio communication and offshore navigation.
3. Mr Robinson was self represented. The MRCC was represented by Mr R Derrington SC of Counsel, instructed by Mr P Crethary of Dibbs, Abbott Stillman.
ISSUES
4. There are two decisions under review in this application, both of which were affirmed on 27 March 2007. These relate to the original decision of a delegate of the MRCC as follows –
1. A determination dated 20 October 2006 that the Commonwealth is liable to pay $300.00 per day (as opposed to $900 per day claimed by the applicant) for loss of wages as a self employed marine licence instructor, pursuant to section 57(3) of the Safety Rehabilitation and Compensation Act 1988 (“the Act”) these claims relate to the two occasions where the applicant was required to attend medical appointments.
2. A determination dated 31 January 2007 that in calculating entitlements to incapacity benefits under section 20 of the Act, that the applicant’s ability to earn $300.00 per day is excessive, and that a weekly earning capacity of $600.00 per week used in statutory calculations. The applicant claims the weekly amount should have been $367.34 per week.
EVIDENCE
Documentary Evidence
5. Considerable documentary material was available to the Tribunal. The following documents were admitted into evidence:
(a)Exhibit 1 – The T documents lodged under section 37 of the Administrative Appeals Tribunal Act 1975 – 2007/2006
(b)Exhibit 2 – The T documents lodged under section 37 of the Administrative Appeals Tribunal Act 1975 – 2007/2007
(c)Exhibit 3 – Boatsafe Training Association of Queensland Inc. letter dated 14 December 2007
(d)Exhibit 4 – Australian Boating College letter dated 1 November 2007
(e)Exhibit 5 – Letter by Jason Robinson with a letter from the Australian Boating College North Queensland dated 24 July 2006
(f)Exhibit 6 – Report by Dr Hausego dated 5 September 2007
(g)Exhibit 7 – Report by Dr Hausego dated 1 October 2007
(h)Exhibit 8 – Documents pertaining to the applicants medications
(i)Exhibit 9 – Report by Ryan Kelly Orthotist dated 7 June 2006
(j)Exhibit 10 – Report by Ryan Kelly Orthotist dated 8 June 2006
(k)Exhibit 11 – Extract from National Standards for commercial vessels
(l)Exhibit 12 – Company tax return for the applicant
(m)Exhibit 13 – Report by Dr Athey, psychiatrist dated 31 May 2004
(n)Exhibit 14 – Report by Dr Jamieson, Orthopaedic surgeon dated 23 March 2007
(o)Exhibit 15 – Report by Dr Philip Vecchio, Rheumatologist dated 25 October 2007
(p)Exhibit 16 – Report by Dr Les Ding dated 1 June 2007
6. Essentially, the documentary evidence available showed that:
(a)Mr Robinson had medical conditions related to his military service which have been accepted by the respondent as follows -
(i)Adjustment disorder with mixed disturbance of emotion and conduct (T19) (accepted 23 August 2004)
(ii)Osteoarthritis of the right knee (T20) (accepted 14 February 2005)
(iii)Lacerations to the right and left knees
(b)Various medical reports have been provided since the acceptance of those conditions which are informative of the degree of impairment to the right and left knees and with respect to the psychiatric diagnosis. These are -
(i)Reports of 31 August 2005 and 14 February 2007 by Dr Maguire (Orthopaedic surgeon)
(ii) Report of 25 November 2005 by Dr Khursandi (Consultant Orthopaedic surgeon)
(iii)Report of 4 May 2006 by Dr Cook (Psychiatrist)
(iiii)Reports of 21 June 2006 and 19 October 2006 and 7 February 2007 by Dr Walters (Orthopaedic surgeon).
(iv)Report of 28 June 2006 by Ms Fiona Macintosh (Occupational Therapist)
(c)Financial Statements were available of Mr Robinson’s business “Australian Boating College NQ” for the financial years ending 30 June 2004, 30 June 2005 and 30 June 2006. These showed a loss for the first year of operation (a partial year) and a relatively minimal profit for the years ending 30 June 2005 and 30 June 2006, although there are significant inconsistencies in the records available for the last two of those trading periods.
(d)Determinations as to Mr Robinson’s entitlements prior to 20 February 2005 and since that date. There have been challenges to entitlements and overpayments as well as to the degree of his incapacity. Despite some variation in expert reports, it seems common ground that Mr Robinson can work (and is wiling to work) two to three days per week and that for the purposes of calculating his earning capacity, the respondent has used the lower level of this range (i.e. two days per week).
Oral Evidence and Submissions of Mr Robinson
7. Mr Robinson emphasised his General Practitioner, Dr Hausego, had prescribed mediation for pain and for his depression. He stated that he is keen to work but if he has an accident, the onus would be upon him to show he was not affected by his prescribed medication.
8. He submitted that his claims were that he should be compensated for –
(a)Attendance at medical appointments based on an amount lost from what he is unable to earn for those times;
(b)The compensation formula should be based on what his earning capacity is in a more realistic sense.
9. In respect of the latter claim, he noted that the respondent relies on an opinion of Boatsafe Training Association of Queensland Inc. dated 19 October 2006 where the respondent sought an estimate of the cost to replace an instructor to run a course in boat license training and assessments’ in the North Queensland region. The President and the Vice President of that organisation believed that, despite a number of variables, two options would be the ‘best estimates’ –
(a)A flat rage of $250 - $300 per day; or
(b)A set fee per student of between $45 and $80 depending on the service provided.
10. That letter concluded that both the President and Vice President agreed that a reasonable average figure would be $300 per day.
11. The applicant submitted that that figure does not reflect the state of competition in his area and provided an example that he might now earn only $100 for a 10 person course.
Submissions - Mr Derrington SC
12. Counsel for the respondent provided detailed written submissions. He submitted that in terms of the claim under section 57(3) of the Act, it is strongly arguable that there is no statutory power to compensate for income forgone while attending medical examinations. If there is such a power, it was submitted that it must be a reasonable amount. He also argued that it only requires reimbursement after the employee or person concerned has incurred the actual expenditure [Taylor v Australian Postal Commission (2004) FCA1265 at 9].
13. In respect of the claim under section 20 of the Act, it was submitted that the approach by the respondent in determining the ‘ability to earn’ is a proper interpretation of that provision and that the approach is supported by the decision of Senior Member Beddoe in Re Hooper v Comcare [(2001) AATA 548:33 AAR 326], a case which is factually similar to the present one.
14. Extracts from that decision were submitted to show that the amount drawn in wages per week by the proprietor in such a case is not an accurate indicator of the ‘ability to earn’, as such a payment for employment is ‘……not at arms length from the employer’ and ‘is not a reasonable basis to determine the amount able to be earned by the applicant’. (Re Hooper v Comcare supra at [33]).
CONSIDERATION
15. I have considered all the oral and documentary evidence and the relevant statutory and case law.
16. The issues to be decided are technical legal ones, or application of technical provisions. The accepted medical conditions of the degree of incapacity were not facts in issue in this case. The statutory provisions involved are also concerned with an applicant being involved in ‘suitable employment’. This term is referred to in section 4 of the Act and refers to age, experience, training, language etc and includes self employment, having regard to the above factors. Mr Robinson seems to have been qualified for his present work from his army training and experience. He has also been assessed independently by an Occupational Therapist as being suitable for that employment and that is supported by medical opinion. Mr Robinson has chosen this occupation and I therefore proceed to consider this matter on the basis that his employment is “suitable employment”.
17. What is in issue centres around two questions. These, and their resolution follows. In resolving these, the Tribunal has the powers of any relevant enactments which empower the original decision maker and can set aside or substitute an alternate decision for the decision under review (section 43, Administrative Appeals Tribunal Act 1975). I am not necessarily restricted only to material which was available to the original decision maker or material which was available up until the date of the previous decision (Drake v Minister for Immigration & Ethnic Affairs (1979) 24 ALR 577, 589). But that does not include extending the jurisdiction which is available for reviewing the decision before the Tribunal if such was not part of the original decision (Comcare v Lees (1998) FCA 1144).
Issue One
Is Mr Robinson entitled to payment for attendance at medical examinations under section 57(3) of the Act, and if so what amount should he be paid?
18. Shortly put, Mr Robinson has claimed he should be paid $900.00 per day under this section. The respondent has paid him $300.00 per day.
19. The statutory law in respect of this question relevantly provides:
Section 57 of the Safety Rehabilitation and Compensation Act 1988
(3) The relevant authority shall pay the cost of conducting any examination required under this section and is liable to pay to the employee an amount equal to the amount of the expenditure reasonably incurred by the employee in making a necessary journey in connection with the examination or remaining, for the purpose of the examination, at a place to which the employee has made a journey for that purpose.
(4) The matters to which the relevant authority is to have regard in deciding questions arising under subsection (3) include:
(a) the means of transport available to the employee for the journey;
(b) the route or routes by which the employee could have travelled; and
(c) the accommodation available to the employee.
20. In addition, section 58 provides that the respondent is empowered to request further information before authorising any payment under section 57.
21. Counsel for the respondent argues that there is no statutory power to pay wages in the circumstances of this claim. He argued that if such a payment is made, it is a matter of policy of the relevant Secretary or his or her delegate.
22. I agree with those submissions. Certainly, it is the case that a specific statutory power is only provided in the Act to pay the cost of the medical examination and reasonable costs of travel to and from that appointment (and if necessary the cost of accommodation for remaining at the location for the purpose of the examination). Section 57(3) is qualified by section 57(4) and together with section 58, in the construction of those provisions plainly supports the respondent’s contentions. Any extra amounts paid (such as wages) would be a matter of policy for the Departmental Secretary or delegate, but such payments would also require a statutory authority. Those authorities are undoubtedly contained in section 44 of the Financial Management & Accountability Act 1997 (Commonwealth) and there is also undoubtedly power in the discretionary management responsibilities of the Secretary and his or her delegates as required in exercising those responsibilities under the Public Service Act 1999 (Commonwealth) and its subordinate regulations.
23. In terms of the approval, I accept that there is ample authority for the Secretary’s delegate to approve $300.00 per day. I have been provided with no evidence that justifies $900.00 per day as claimed by the applicant.
24. I therefore affirm the decision of 27 March 2007 in respect of this issue for determination.
Issue Two – Is the amount of $300 per day as the ‘ability to earn’ in calculating the formula in section 20 of the Act, too high in Mr Robinson’s circumstances?
25. Mr Robinsons claim here seemed somewhat inconsistent with the claim under section 57(3) (above). There, he claims he should be paid $900.00 per day while here, he claims he is ‘able to earn’ only $367.34 per week (T39, folio 243). The latter figure is the result of the applicant’s claim that he accepts that he can earn $300.00 per day from his business but that is only for 2 days per week, or $600.00 per week. He maintains the hourly rate should be determined by dividing that weekly figure ($600.00 per week) by 36.75 hours (a standard working week), which would produce an hourly rate of $16.32. That rate multiplied by 22.5 hours per week (the hours he is capable of working based on medical opinion), would provide an amount of $367.34 per week.
26. The respondent, on the other hand, extrapolated the daily rate of $300.00 to show what that would equate to for a full 5 day week and then divided this hypothetical weekly total by 36.75hours. That produced an hourly rate of $40.82, which when multiplied by 22.5 hours per week, gives a total weekly amount of $918.45 as the applicants weekly ‘ability to earn’.
27. The different bases of calculation produce different results. The approach by the applicant however results in only 40% of the respondent’s calculations. The applicant argued that the calculation should reflect more accurately, his true capacity to earn. The correct approach must accord with the legislation as best interpreted by principles of Statutory interpretation.
28. With respect, the applicant’s arguments are not tenable. Section 20 of the Act provides a formula for the calculation of compensation in the special situation Mr Robinson, where he is also in receipt of a superannuation pension. This section applies for a Commonwealth employee who is incapacitated as a result of an injury and is subsequently retired (voluntarily or compulsorily) and is entitled to a pension under a superannuation scheme.
29. The formula which is not in contention here, is set out in section 20 of the Act as follows:
AC – [SA+5% of employee’s normal weekly earnings]
= AC – [SA+SC]
Where –
AC = Amount of compensation as calculated in section 19, including the adjustment percentage set out in section 19(3)(c);
SA = Superannuation contribution amount received
SC = Superannuation contribution which Mr Robinson would have been required to make if he was still contributing to the superannuation scheme.
30. The result in calculation of this formula shows the net calculation to be:
AC – [SA + SC] = $233.13 – [$304.81 + $49.01]
= $233.13 - $353.82
= ($120.69)
31. Therefore, as this is a negative result, there is no compensation payable under section 20 of the Act.
32. Is this consistent with the legislative intent of section 20 of the Act? The modern approach to statutory construction has clearly been stated by the High Court of Australian to be one which is consistent with the statutory context of all of the provisions of the relevant statutes (CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384: Project Bluesky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355: Network Ten Pty. Limited v TCN Channel Nine Pty. Limited (2004) 205 ALR1). The calculations referred to above reflect the purpose of determining the amount of incapacity benefits under Division 3 of Part 2 of the Act. Using the “purposive” approach to statutory interpretation espoused by the High Court of Australia in the cases above, the relevant statutory provisions in this case are intended to impose a limit so that the employee is not, by reasons of payments made by the Commonwealth, put in a position which is more lucrative during the period of incapacity and after retirement than would have been the case prior to the relevant injury (Bortolazzo v Comcare (1997) 75 FCR 395 at 388).
33. The definitive question is, having regard to the intention of the legislation, whether the amount of the ‘ability to earn’ as utilised by the respondent or the applicant, is the correct one to be applied in this case. For reasons alluded to above, I have concluded that the approach used by the applicant is not internally consistent in applying the elements in the formula, whereas I accept the respondents approach as being more in accordance with the legislative intent.
34. I must say however, I accept the evidence of Mr Gordon Peterson (Exhibit 3) which highlights the fact that overheads (and capital expenditure) may make businesses such as that of Mr Robinson, only minimally profitable. Mr Robinson’s evidence in this respect was, and I accept this evidence, that competition in his area has increased and tended to place downward pressure on his income. Nevertheless, I find as a matter of fact, that the Tribunal has some doubt as to the efficacy of the applicant’s financial records for the financial years ending 30 June 2005 and 30 June 2006 in particular. Having said that and recognising there may be increasing difficulty for Mr Robinson to generate income from time to time, that evidence is not determinative of the issue here, as the question for resolution is concerned with the proper application of section 20 and specifically, about the ‘ability to earn’ element which is defined in section 19. Lack of profitability is not a basis for determining the formula in section 20 (Hardin v Comcare Australia (1997) AAT No.11727/97).
35. The application of the legislative intent is, as submitted by Mr Derrington, logically explained by the reasoning of Senior Member Beddoe in Re Hooper v Comcare (supra). Particularly in cases such as this where the true net earnings of a business may not be intuitively obvious from the financial statements (as opposed to that of an employee on wages where amounts are more certain), the wages drawn by the owner of the company, or even the true net profit shown in the profit and loss account, may not be good indicators of ‘ability to earn’. The rationale for this proposition is that expenses debited to the accounts may be inconsistently applied or even not in accordance with good accounting practice or the prescribed accounting standards. Alternatively, the business may be cost inefficient and thus the true ‘ability to earn’ would be concealed for that reason also. I therefore accept the respondent’s calculations and use of the average figure of $300.00 per week as being the appropriate figures for use in these calculations as it is a more objective amount (provided by Boatsafe Training Association of Queensland Inc.) and is more consistent with the meaning of the words ‘ability to earn’ as used in section 20. In cases such as the present one where the applicant and respondent agree on earning capacity of $300 per day and Mr Robinson’s ability to work 2 days per week, the use of hourly rates to create other hypothetical scenarios is not desirable and can lead to a degree of manipulation, whereas a degree of consistency of interpretation and application should be aimed at where compensation legislation is involved.
36. In these circumstances, I reject the submissions of the applicant and affirm both the decisions under review in respect of this application.
DECISION
37. The decisions 20 October 2006 and 31 January 2007 are affirmed.
I certify that the 37 preceding paragraphs are a true copy of the reasons for the decision herein of Dr KS Levy, RFD, Senior Member
Signed: .......................[Sgd].........................................................
Personal AssistantDate/s of Hearing 21 December 2007
Date of Decision 15 January 2008
Applicant Mr Robinson, himself
Counsel for the Respondent Mr R Derrington SC
Solicitor for the Respondent Dibbs Abbott Stillman
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