The Commonwealth of Australia v El-Hassan, F
[1985] FCA 499
•01 OCTOBER 1985
Re: THE COMMONWEALTH OF AUSTRALIA
And: FRANK EL-HASSAN
No. 429 of 1984
Administrative law
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Burchett J.
CATCHWORDS
Administrative law - Commonwealth Employees' Compensation - Appeal from Administrative Appeals Tribunal re employee's request for lump sum redemption of further payments - Proposed use of lump sum in self-service petrol station business - Interpretation of s.49 of Compensation (Commonwealth Government Employees) Act 1971 - Meaning of requirement of satisfaction that "in all the circumstances it is desirable in the interests of the employee that the liability of the Commonwealth be redeemed" - Meaning of requirement that the intended use of a lump sum be in a manner particularly advantageous to the employee - Meaning of "a request" - Factors relevant to determination of lump sum - Powers of Administrative Appeals Tribunal upon appeal from a decision of the Commissioner - The place of "policy" in the discretion under s.49 - Whether the interests of the employee are the central issue - Whether the viability of a proposed business use of a lump sum must be considered both under paragraph (b) and paragraph (c) of s.49(5). Administrative Appeals Tribunal Act 1975, s.43(1), s.44(1)
Compensation (Commonwealth Government Employees) Act 1971, s.49
Australian Telecommunications Commission v. Newson, unreported, Woodward, Toohey and Pincus JJ., 12/7/85.
Watkins Ltd. v. Wiremu Renata, unreported, Toohey and Morling JJ., McGregor J. dissenting, 14/6/85.
Reitano v. Commonwealth of Australia, unreported, Lockhart, Morling and Neaves JJ., 5/8/83.
Re Becker (1977) 15 ALR 696.
HEARING
SYDNEY
#DATE 1:10:1985
ORDER
(1) The decision of the Administrative Appeals Tribunal be set aside.
(2) The decision of the Commissioner for Commonwealth Employees' Compensation the subject of the application to the Administrative Appeals Tribunal be affirmed.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an appeal from a decision of the Administrative Appeals Tribunal constituted by Mr. J.O. Ballard, Senior Member.
The matter arises under s.49 of the Compensation (Commonwealth Government Employees) Act 1971, which provides as follows:
"(1) 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.
(2) A request under the last preceding sub-section shall be in writing and shall specify the manner in which the employee intends to use the lump sum if the request is granted.
(3) Where a request is made under sub-section (1), the Commissioner shall, unless the employee has, by notice in writing to the Commissioner, withdrawn the request, determine -
(a) whether the liability of the Commonwealth is to be redeemed by the payment to the employee of a lump sum; and
(b) if he determines that the liability is to be so redeemed - the amount of the lump sum.
(4) The amount of the lump sum is the amount determined to be the value, as at the date of the determination by the Commissioner that the liability is to be redeemed, of the right of the employee to receive further payments of compensation under section 46 and, in the determination of the value of that right, regard shall be had to the nature of the injury to the employee, the age and occupation of the employee and any other relevant matters.
(5) 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.
(6) Where -
(a) the Commissioner has made, in pursuance of a request under sub-section (1), a determination that the liability of the Commonwealth to make further payments to an employee under section 46 is to be redeemed by the payment to the employee of a lump sum;
(b) the employee has not instituted a proceeding under Part V in respect of the determination or, if he has instituted such a proceeding, has discontinued the proceeding; and
(c) the lump sum has not been paid to the employee in pursuance of the determination,
the employee may notify the Commissioner in writing that he no longer wishes the liability to be redeemed and, in that case, the determination shall be deemed not to have been made and a further determination shall not be made in respect of that request."
The respondent, Frank El-Hassan, sustained a soft tissue injury to his lumbar spine on 12 February 1974, as a result of which he received (during a long period) compensation on the basis of total incapacity. On 29 April 1982 he was diagnosed by Dr. H.P. Greenberg, a psychiatrist, as suffering from a functional overlay of an hysterical kind "not predominantly due to conscious malingering or exaggeration". The Doctor commented: "However it is evident that compensation factors play a part in maintaining his disability and until litigation is finally settled with, there is no likelihood of improvement." On 14 September 1982 a consent decision of the Administrative Appeals Tribunal was made to the effect that, from 30 March 1981 and continuing, he should be regarded as partially incapacitated for work as a result of the personal injury he sustained on 12 February 1974, and that from 30 March 1981 he should be regarded as able to perform the duties of a gatekeeper, watchman, or car park attendant.
In fact the respondent did not obtain any employment at all, but by correspondence culminating in a letter from his solicitor to the delegate of the Commissioner for Employees' Compensation dated 26 September 1983, he applied for a redemption under s.49 of the Act. Pursuant to s.49(2), he specified the manner in which he intended to use the lump sum, if his request had been granted, as follows:
"1. To repair his home which is in a poor state of repair.
2. To add to the home, which is only a two bedroom home and which at the present time accommodates two adults and five children.
3. To purchase a business, in the form of a general business that the elder children would be able to operate and which would at least allow some income to be generated for the household."
The decision of the Commissioner, upon this request, was that the current entitlement of the respondent should not be redeemed under s.49.
The decision of the Commissioner was expanded by the following reasons:
"I am precluded from awarding a lump sum under section 49 unless I am satisfied that a claimant has met the requirements set out in sub-section 49(5). After carefully considering the matter I have concluded that Mr. El Hassan has not met those requirements.
By way of expansion, Mr. El Hassan has not worked for a decade and suffers from a neurotic conversion reaction. I note that he has been trained as an electrical mechanic. I have no evidence that he has experience in running a business. It is stated that his children would operate the business and I understand that they range in age from 11-21 years. I think on these facts that there must be considerable doubt whether, if Mr. El Hassan were able to purchase a general business with a lump sum compensation payment, it would prove to be a financially viable proposition.
In view of the above I am not satisfied that, having regard to his medical problems and other factors, the purchase of a business would be a use of a lump sum that would be particularly advantageous to Mr. El Hassan. In all the circumstances, I believe that it would be more beneficial for him to continue to receive regular weekly payments."
From the Commissioner's determination, Mr. El-Hassan appealed to the Administrative Appeals Tribunal. In his Application for Review of Decision, there were specified the following reasons for his Application:
"The decision of the Commissioner is apparently based on his view that Frank El-Hassan would not be able to operate a business. If his weekly payments are redeemed he would propose to apply the proceeds towards the purchase of a self-service station which would supply petrol and other requirements for motor vehicles and which would not involve any heavy duties or much business acumen."
At the hearing in the Administrative Appeals Tribunal, there were tendered a number of letters from a firm of business brokers setting out details of particular service stations claimed to be typical of service stations of the kind contemplated by Mr. El-Hassan for purchase. In addition, a letter from Mr. El-Hassan's solicitor to the delegate of the Commissioner for Employees' Compensation was tendered. This letter gave details of a particular Caltex service station at 1126 Canterbury Road, Punchbowl and added:
"Our client believes that this particular business, which has been on the market for approximately five months, would be a viable proposition to him...".
Mr. El-Hassan gave evidence of the profit margin per litre of petrol, that he would operate a self-service station but would not be involved in any mechanical repairs (sub-leasing any repair shop associated with a station purchased by him), and that on this basis he felt that he could sit at the cash register to take the cash, and that a twenty year old son and a seventeen year old daughter would assist with the running of the business. The evidence was that the son had a trade qualification as a panel beater but had voluntarily left his job, some eighteen months previously, because he did not like the fumes and dust, and had not worked since. The daughter had never worked. Neither of them had done the School Certificate. Mr. El-Hassan had not attempted to do any work at all in the past ten years, and in particular had not tried to obtain work in a service station behind the cash register, although he had relatives who had been in service station businesses.
Although the documents tendered directed attention, as I have indicated, to particular service station businesses, Mr. El-Hassan, in his evidence, did not restrict himself to those service stations. He asserted: "Any petrol station is a good one", and "I like to buy any petrol station".
In answer to Mr. El-Hassan's case, evidence was called from the Executive Director of the Service Station Association of New South Wales, a Mr. B.E. Mark, which clearly showed that, on the assumption the respondent received a lump sum of about $90,000-00 (and it was not suggested he would receive any more), such an amount would be utterly inadequate to purchase a viable business of the kind in question, that the net profit from the sale of petrol was nothing like the figures mentioned by Mr. El-Hassan, that in the past eight years about half the service stations in Australia had had to close, that the expectation in the industry was that the process of eliminating service stations would accelerate, that the particular area nominated in the respondent's solicitor's letter was probably the most undesirable area in all of Sydney in which to go into a service station business (this evidence led Mr. El-Hassan's own counsel to comment: "Then you would not touch the area"), that each of the other service stations specifically referred to in Mr. El-Hassan's case had features which disqualified it as a viable proposition for him, and that in any case Mr. El-Hassan would have no chance of being accepted by an oil company as a lessee of a service station with security of tenure for any period other than a period of less than one year, with the consequence that he would be at risk of losing his entire investment after that brief period. Mr. Mark said that if Mr. El-Hassan came to him at the Service Station Association with a sufficient sum to invest in a viable self-service station, a sum much larger than $90,000-00, he would advise Mr. El-Hassan to go and operate as a commission agency for an oil company for a year before considering actually putting his own capital into a service station, since such an enterprise involved too much risk for a person without expertise.
In the face of this evidence, it is hardly surprising that the Tribunal felt unable to determine that the liability of the Commonwealth to make further payments to the respondent should be redeemed by the payment of a lump sum. Specifically, the Tribunal considered that it was debarred from so determining by the provisions of s.49(5)(b). The Tribunal could not be satisfied that the respondent intended to use the lump sum in a manner that was particularly advantageous to the respondent. The Tribunal did not consider that the original proposition put to the Commissioner was such as to enable him to be so satisfied, nor was the proposal as clarified in evidence before the Tribunal sufficient to enable the Tribunal to be so satisfied.
However, the Tribunal took the view that the determination of the Commissioner should, nevertheless, be set aside and the matter should be remitted to him with a series of directions as follows:
"(i) in considering whether the liability of the Commonwealth is to be redeemed by the payment of a lump sum, regard shall be had to the objects and purposes of the Act and to its provisions but not to policy considerations which would fetter the application of the discretion whether to redeem on these facts;
(ii) the application for redemption the subject of these proceedings is in accordance with the scope and purpose of the Compensation (Commonwealth Government Employees) Act 1971 ("the Act") (sub-section 49(3));
(iii) the value of the lump sum is to be determined as at the date of redemption disregarding possibilities of future improvement in the applicant's medical condition;
(iv) the applicant's injury is not likely to result in his becoming totally incapacitated for work (paragraph 49(5)(a));
(v) in all the circumstances, it is desirable in the interests of the applicant that the liability of the Commonwealth be redeemed (paragraph 49(5)(c));
(vi) the liability of the Commonwealth is to be redeemed by the payment to the applicant of a lump sum if the Commissioner is satisfied that the applicant intends to use the lump sum in a manner that is particularly advantageous to the applicant (paragraph 49(5)(b)); for the purposes of determining whether the Commissioner is so satisfied -
(a) the applicant shall be invited to submit details of a specific project for which he intends to use the lump sum,
(b) in considering any such project the word "manner" shall be construed as in these reasons and not as requiring that the financial viability of the project or the applicant's capacity to perform it be the subject of scrutiny save to the extent that this is necessary for the Commissioner to be satisfied that the applicant genuinely intends to use the lump sum in the manner indicated and that the applicant will participate in the project."
It is this decision which is the subject of the present appeal. The appeal is, of course, limited to questions of law by virtue of s.44 of the Administrative Appeals Tribunal Act 1975.
The first thing which strikes one, upon reading the decision, is that the determination of the Commissioner is set aside. This is intrinsically surprising, after a finding that neither what was originally specified as the manner in which the respondent intended to use the lump sum if his request was granted, nor the elaboration of it upon his appeal, enabled a finding in his favour under s.49(5)(b). S.49(2) provides that a request "shall specify the manner in which the employee intends to use the lump sum if the request is granted", and s.49(5) forbids the grant of the request by the Commissioner "unless he is satisfied that...(b) The employee intends to use the lump sum in a manner that is particularly advantageous to the employee." Plainly, the specification of the manner of intended use of the lump sum is essential to the request. The respondent made it clear his intention was to use it to buy a self-service petrol station. That intention failed to fulfil the requirement of s.49(5)(b).
In this situation, it is difficult to see why the decision of the Commissioner was not simply affirmed. It is not as if such a decision would estop the respondent from making a further application, founded upon a new intention. Were that the position, one could understand a decision-maker's solicitude to ensure that a worker did not lose his one opportunity. But the final words of s.49(6) clearly contemplate the possibility of a further request, and in any case the subject matter of a request (being as changeable as human intentions and circumstances) confirms that s.49(5) does not produce, upon a refusal, an unalterable result (cf. Collett v. Loane (1966) 117 CLR 94). See also s.20(4)(a). Furthermore, there is no substance in the suggestion that the respondent had not put to the Tribunal a sufficiently "specific proposal" to warrant its proper consideration and simple rejection. An employee does not have to submit "detailed proposals of the business he contemplates" (Australian Telecommunications Commission v. Newson, unreported, 12/7/85, Woodward, Toohey & Pincus JJ., per Toohey J. referring to the present case). But he does have to show a "probability that a lump sum will be used in a manner which will be advantageous to him in his particular circumstances" (ibid, per Toohey J.; see also per Woodward J.).
What the respondent had done was to put forward a proposal quite as specific as that in Newson's case, but without showing that it would be advantageous to him; indeed the evidence demonstrated it would be disastrous for him, losing him his compensation and (if he mortgaged his home to raise additional business capital) perhaps his home as well. There was, before the Tribunal, simply a properly formulated request which was bound to be denied. There was no other request. In the circumstances, the relevance of the Tribunal's suggestion that "the delegate failed to give the applicant a fair opportunity of presenting his case" is tenuous - that case had been presented, with a wealth of detail, in the Tribunal. If, as the Tribunal asserts, "the proper course was for the delegate to have sought from the applicant further details of a specific proposal and of his participation in it", such details had in fact been furnished both before and during the hearing. It was, of course, the function of the Tribunal to consider the preferable decision upon the material before it, rather than the somewhat arid question of what should have been done with the different material before the delegate.
This is not the occasion to consider precisely what limitations, upon the power of the Tribunal to issue directions, are to be derived from considerations of relevance to the controversy which enlivens its jurisdiction. Some limitations there must be, since it is "the matter" which s.43(1)(c)(ii) of the Administrative Appeals Tribunal Act 1975 authorises it to remit for reconsideration in accordance with any directions or recommendations of its own. The Tribunal was not created to usurp the functions generally of administrators from whom appeals might be brought to it in respect of particular decisions.
Whatever might be the position in other circumstances, in this case the directions given involve, in my opinion, fundamental errors of law. In the first place, the directions amount to a decision in advance upon a request which had never been made, or at all events upon circumstances which had never been disclosed. The statute did not authorise the making of such a decision. It authorised only a decision "where a request is made under sub-section (1)" (s.49(3)) which "shall specify the manner in which the employee intends to use the lump sum if the request is granted" (s.49(2)). It forbids a redemption unless the Commissioner is satisfied of the three matters set out in s.49(5), which include:
"(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."
I think the better view is that the specification of an intention to purchase some other category of business, instead of the self-service petrol station contemplated by the original request, as explained in the Application to the Administrative Appeals Tribunal, would constitute a fresh request. Sub-secs. (2) and (5) make it clear that the particular intention is at the core of a request. Consequently, I think the giving of the directions was beyond the powers of the Tribunal (cf. Roidoulis v. Australian Postal Commission, Keely J. unreported 16/4/81).
But even if that not be so, "all the circumstances", which the Commissioner is required by para.(c) to consider, must include those pertaining to the contemplated business. The separate statement, in sub-s. (5), of paras. (b) and (c), emphasises that a favourable finding under para.(b) is but one step upon the path to decision - whether "in all the circumstances" redemption "is desirable in the interests of the employee" remains to be determined. That determination must embrace a fresh look at the particular proposal, in the wider context of all its personal, familial and financial implications, and a weighing of its peculiar effects against the Commissioner's perception of the other effects of redemption in the instant case.
The statute cannot be construed as intending a decision, that in all the circumstances redemption is desirable in the interests of the employee, to be made before all the circumstances are known, and especially before the proposal to which sub-s.(2) gives central significance has been identified. Therefore directions (ii) and (v) must be set aside.
Furthermore, the terms of direction (vi) of the directions given by the Tribunal specifically exclude consideration of the financial viability of any business project specified by the respondent, or of his capacity in relation to it. While I shall indicate below that I think this direction is itself wrong in law, it is pertinent to observe that it could not possibly be consistent with the restricted view of the meaning of s.49(5)(b), which it reflects, to exclude also from the circumstances referred to in s.49(5)(c) the viability of an intended business undertaking. If that were the correct approach, a whole range of advantages (or disadvantages) which could be described as economic would never really come to be considered at all - at least in relation to sub-s.(5). Accordingly, if direction (vi) stands, direction (v), which embodies the Tribunal's view that para.(c) had been satisfied, must be set aside, and the Commissioner must, upon considering any further proposed use of a lump sum, have regard to the capacity of the employee and the viability of any business he proposes.
Direction (vi) is so restrictive of the parameters within which s.49(5)(b) is to be applied as to suggest the Tribunal took the view that, except where the contrary could be conclusively proved, any business project in which the respondent genuinely intended to invest would be "particularly advantageous". Indeed the Tribunal was critical of the appellant's calling of evidence to demonstrate that the proposed service station business would inevitably fail. The expert's suggestion, that the respondent's best way of entering the service station industry would be by way of becoming a commission agent, was brushed aside on the footing that it would not require a lump sum and "could also involve the loss or diminution of the existing entitlement to weekly payments." This comment seems only consistent with the view that the respondent's working capacity might in fact be greater than that which his compensation payments reflected, and that a sound exercise of discretion would nevertheless aim to assist his retention of those payments. If the Commissioner has a general discretion, such an approach to its exercise must I think be wrong in law, but perhaps an assumption of a greater capacity than that evidenced may assist to explain the lack of attention to the question whether the respondent would, in fact, be able to perform the work requisite to the carrying on of a business. However, the problem which should have been faced has very much bigger dimensions than that. The advantages of a business to the respondent cannot be considered without reference to his business experience and acumen. Yet, nowhere in the reasons of the Tribunal is the question raised whether the respondent's conspicuous ignorance in matters of business casts doubt on his ability to organize and manage even a small enterprise. He demonstrated an airy indifference to the realities of the service station businesses about which he gave evidence, and a naive faith in the untried abilities of his son and daughter. Yet the Tribunal did not consider the real possibility that, if his first choice was so misdirected, a second choice might not afford any sound assurance of a secure future, and gave direction (vi). I think this must proceed upon a "private opinion" (see per Kitto J. in R. v. Anderson; Ex parte Ipec-Air Pty. Limited (1965) 113 CLR 177 at p 189) that virtually any business investment would be advantageous.
In Newson's case, during the argument in which the decision of the Tribunal in the present case was cited, Toohey J. said:
"I agree with Woodward J. that the Commissioner need only be satisfied of the genuineness of the employee's present intentions and of the probability that a lump sum will be used in a manner which will be advantageous to him in his particular circumstances. While the Tribunal relied upon the decision of El-Hassan, it did in fact direct its attention to the advantages to the respondent of using the lump sum to buy a house and to establish a carpentry business. In that respect the Tribunal applied a test perhaps more onerous to the respondent than El-Hassan requires, but a test which I think the Act demands."
In the present case, not only did the Tribunal not
direct its attention to the question what real advantages to the respondent would be offered by an intended use of the lump sum requested, but it specifically directed that the application of s.49(5)(b) be considered, in relation to a contemplated business proposal, "not as requiring that the financial viability of the project or the applicant's capacity to perform it be the subject of scrutiny" except in the limited way stated in the direction. While it is not necessary to examine detailed proposals of a particular business, this direction is wrong in law, for it is necessary to be satisfied that it is intended to use the lump sum in a manner that is "particularly advantageous" in the sense defined by the majority in Newson's case. The satisfaction demanded by the Act cannot be attained without considering whether (if a business of a particular type is proposed) it would be within the employee's power to carry on such a business with profit.I should add that, while direction (vi) understates what is required to be shown in the respect I have been discussing, it also overstates the particularity required of the respondent; it is clear from Newson's case (which of course was not available to the Tribunal) that the request can be dealt with on the basis of a class of business activity, such as a carpentry business in a particular locality, it not being necessary (as distinct from perhaps desirable - see the comments in the last paragraph of the judgment of Woodward J. in Newson's case) for the employee to "submit details of a specific project".
Finally, in relation to direction (vi), I note that there is no warrant in s.49(5)(b) for any assumption that it is essential, to enable an intended use of a lump sum by investment in a business to pass the statutory test, that the employee personally "participate in the project". S.49(5)(b) is simply concerned with advantage to the employee in his particular circumstances, though his personal participation may often be thought an indication of his true intention and a measure of the benefits he is likely to derive.
Direction (iii) of the Tribunal's directions was the subject of separate submissions. That direction requires the lump sum the subject of any redemption to be determined "disregarding possibilities of future improvement in the applicant's medical condition".
S.49(4) lays down the basis upon which this amount must be assessed. It refers to "the value as at the date of the determination... of the right of the employee to receive further payments of compensation under s.46", to "the nature of the injury", and to "the age and occupation of the employee and any other relevant matters".
Prima facie, I should think any prospect of recovery must be relevant to the value of a right, the continuance of which is dependent upon the absence of recovery. But the matter is not free from authority. In Reitano v. The Commonwealth of Australia (Full Court, Lockhart, Morling and Neaves JJ., unreported, 5/8/83) it was held that the making of a request for redemption did not deprive the Commissioner of the power to reconsider the entitlement of the employee to the payments the subject of the request. The joint judgment of the Court added the comment:
"We should say that, in any event, it would be relevant in determining the amount of any lump sum payable under sub-s. 49(4) of the Act to have regard to the prospect of the employee ceasing to be entitled to payment of compensation under s.46. In determining the value of the right of the employee to receive further payments of compensation it would be relevant, in our opinion, to have regard to any matter which might affect the continuation of those payments. What sub-s. 49(4) requires to be valued is the right of the employee to receive further payments of compensation under s.46. The right which that section confers is a right to receive compensation only during the period during which the employee is partially incapacitated for work due to injury. Clearly, if it be shown that an employee is no longer partially incapacitated for work, this circumstance would need to be taken into account in assessing whether the Commonwealth's liability should be redeemed and, if so, the value of the employee's right to receive further payments of compensation: see Heath v. Commonwealth of Australia, (1982) 43 ALR 673 at p 678."
If this passage be regarded as obiter, it is nevertheless the considered view of a Full Court. It is also consistent with views taken regarding other provisions for redemption of weekly payments of compensation. See, in respect of the Northern Territory Act, the joint judgment of Toohey and Morling JJ. in Watkins Ltd. v. Wiremu Renata (Full Court, unreported, 14/6/85). In one of the most often-cited cases in this area of the law, Calico Printers' Association v. Higham (1912) 1 KB 93, Cozens-Hardy MR at p 97 said:
"In reviewing a weekly payment under clause 16 the arbitrator must deal only with existing facts, and must not prophesy or speculate as to the workman's future condition. But in redeeming under clause 17 he is bound to speculate. He must not rest content with finding that the weekly payment which has been continued for six months is at the moment the proper sum. He must start with the assumption that the existing weekly payment is proper; but he must go further, and ascertain as best he can whether that payment is likely to be proper during the rest of the man's life."
In my view, the Tribunal should have followed the observation of the Full Court in Reitano's case, and I should do so too.
Direction (i) forbids the Commissioner to have regard "to policy considerations which would fetter the application of the discretion whether to redeem on these facts". Two things need to be said about this direction. The first is that it cannot be applied to the examination of any fresh proposal, since such a proposal would in itself be an additional fact, so that the discretion would no longer simply relate to "these facts" referred to in the direction. The other matter is that an ambiguity lurks in the words "policy considerations which would fetter the application of the discretion". The Tribunal referred in its reasons to Rex v. Port of London Authority; Ex parte Kynoch Ltd. (1919) 1 KB 176. But that case distinguishes between a policy obdurately to exclude certain types of application, which would be "a refusal to exercise any discretion", and a general policy honestly adopted to guide the exercise of discretion unless there is something exceptional in an individual instance. There is no doubt that the latter type of policy is both appropriate, and also desirable in the interests of consistency which is one facet of fairness: Re Becker (1977) 15 ALR 696; Drake v. Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; Nevistic v. Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639.
The ambiguous reference to the fettering of the application of a discretion might be thought to apply to the legitimate effect of a policy which, properly taken into account, produced a decision different from that which would have resulted from an untramelled consideration of the circumstances without regard to any policy (see Nevistic's case (supra)). The Tribunal's direction could thus inhibit a proper application of policy, and do so notwithstanding that there is no indication in the record of any advertence to the content of any relevant policy, or the circumstances of its evolution. In Re Becker (supra) Brennan J. at pp 700-1 warned:
"Whenever the review of a decision involves consideration of policy, it is essential that the Tribunal be fully informed as to the policy and the reasons for it. Otherwise the decisions of the Tribunal may, instead of providing a rational analysis of policy and assisting to develop principled yet flexible decision-making, intervene incongruously to disrupt the due course of administration."
The Tribunal also appeared to assert a legislative policy "that redemption of weekly payments to partially incapacitated employees is in (scil. principle) to take place but that this is not at large as under the State Acts and is to take place pursuant to the criteria set out in the section." Of course the primary provision of compensation in the Act is by way of weekly payments. But I think s.49, having regard to the terms of sub-s.(5), evinces a policy that the most important consideration, concerning redemption, is whether in all the circumstances it is desirable in the interests of the employee. To see this as the central issue is to see the provision for redemption in the Act as part of a long inheritance in this area of compensation law. The leading cases are reviewed, in respect of their application to the analogous though differently expressed section in the Workmen's Compensation Act of the Northern Territory, in Watkins Ltd. v. Wiremu Renata (Full Court, Toohey and Morling JJ., McGregor J. dissenting, unreported 14/6/85); see also particularly Harrington v. Harrington (1981) 55 ALJR 566, and Heath v. Commonwealth of Australia (1982) 43 ALR 673 at 679, per Mason and Wilson JJ., where s.49 of the Act is referred to.
For these reasons, I set aside the decision of the Tribunal. In several respects, to which I have referred, it gave weight to irrelevant considerations, failed to consider relevant factors, misapprehended the matters of which it had to be satisfied, misconstrued the section, and misunderstood its own function in the statutory scheme defining the respondent's rights. Indeed, counsel for the respondent frankly conceded it was difficult to support the approach of the Tribunal in giving the directions which it gave. Since, upon an application of the law as I have held it to be to the Tribunal's findings of fact, the appropriate order (in the sense expounded by Sheppard J. in Minister for Immigration and Ethnic Affairs v. Gungor (1982) 42 ALR 209 at 220-1 - see also Director-General of Social Services v. Hales (1983) 47 ALR 281 at 310, per Lockhart J. and McBay v. Director-General of Social Security (Wilcox J., unreported, 15/2/85)) is to affirm the decision of the Commissioner for Commonwealth Employees' Compensation, the subject of the Application to the Administrative Appeals Tribunal, I order that that decision be affirmed.
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