Trimboli v Secretary, Department of Social Security

Re: MARINO TRIMBOLI
And: THE SECRETARY TO THE DEPARTMENT OF SOCIAL SECURITY
No. G633 of 1988
FED No. 86
Administrative Law - Constitutional Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Woodward(1), Beaumont(2) and Hill(3) JJ.

CATCHWORDS

Administrative Law - Social Security Act 1947 - recoverability of sickness benefit where lump sum workers compensation aware made - calculation of amount to be recovered by Department of Social Security - "Edwards" formula - wrongful retention of money by the Department - allowance for inability to use money which was wrongfully retained - whether question of interest was properly before Administrative Appeals Tribunal - discretion under s.115E of the Social Security Act to reduce amount recoverable by the Department in view of "special circumstances" - whether the failure by the Administrative Appeals Tribunal to exercise its discretion under s.115E involved an error of law.

Constitutional Law - whether payment of interest before litigation is commenced is illegal as contrary to s.81 of the Constitution - whether potential statutory liability to pay interest means that a payment out of Consolidated Revenue would not be unauthorised by Parliament within the Auckland Harbour Case (1924) AC 318.

Social Security Act 1947 ss 17, 115C(1), 115D(1) and (2), 115E.

Administrative Appeals Tribunal Act 1975 ss 25, 29(1), 43(1), 44(1).

HEARING

SYDNEY

#DATE 23:3:1989

Counsel and Solicitors for J.A. McCarthy Q.C. and
the Applicant: S.D. Robb instructed by Margiotta

Counsel and Solicitors for Dr. G.A. Flick instructed by the
the Respondent: Australian Government Solicitor

ORDER

The appeal be allowed.

The orders made by the Administrative Appeals Tribunal on 24 February 1988 be set aside.

The matter be remitted to the Tribunal to review the exercise of discretion under s 115 E of the Social Security Act 1947, either with or without the hearing of further evidence, in accordance with the reasons for decision of this Court.

No order as to costs.

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

JUDGE1

I have read the draft judgment of Hill J in this matter. I adopt his description of the relevant facts and circumstances of this application and agree with his statement of the law applicable to those facts and circumstances. I also concur in the comments of Beaumont J on the particular issue with which he deals.

Before the Administrative Appeals Tribunal, an order was sought for the payment of interest on the moneys withheld from the applicant by the actions of the respondent. That application was rightly rejected - not entirely for the reasons given by the Tribunal, but rather for those set out by Hill J.
The only difficulty I feel about this application arises at the very last stage of the Court's consideration of the first substantial matter identified by Hill J as requiring the Court's attention.
I am satisfied that, for the reasons given by Hill J, this applicant was deprived for a time of substantial sums due to him as a result of his Workers' Compensation award. He was so deprived by the erroneous actions of the respondent. I agree with Hill J that this was a matter proper to be taken into account by the respondent's officers, the Social Security Appeals Tribunal and the Administrative Appeals Tribunal (in turn) in considering, under s 115E of the Social Security Act 1947, whether part of the payments of sickness benefits received by the applicant should be treated as not having been made and therefore not be reclaimed by the respondent from the applicant's award.
The difficulty I feel arises from the fact that this approach was not expressly urged, on the applicant's behalf, upon the respondent or either Tribunal. It only emerged in the course of discussions during the hearing of this application.
As Deane J said, in an often-quoted passage in Sean Investments Pty. Ltd v MacKellar (1981) 38 ALR 363 at 375,

"In a case such as the present, where relevant considerations are not specified, it is largely for the decision-maker, in the light of matters placed before him by the parties, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards. The ground of failure to take into account a relevant consideration will only be made good if it is shown that the decision-maker has failed to take into account a consideration which he was, in the circumstances, bound to take into account for there to be a valid exercise of the power to decide".

In my view the question of temporary deprivation of moneys in this case falls close to the borderline between a consideration which the decision-maker was bound to take into account, even though the argument for it was put inadequately or not at all, (see, for example, Minister for Health v Charvid Pty. Ltd. (1986) 10 ALD 124 at 131-2), and a consideration which, if it had been raised, could have been taken into account or disregarded as the decision-maker saw fit.
While I still have doubts whether the Tribunal's failure to consider the deprivation of moneys as a factor relevant to the exercise of the s 115E discretion amounted to an error of law, I shall not dissent from the decision of the other members of the Court.
I think there was an error of law in the way in which the question of interest was approached. The Tribunal's outright rejection of that claim as being beyond the power of the respondent to grant, may have caused the Tribunal to overlook the possibility of making some less precise compensation to the applicant for his deprivation in another way which was within the express provisions of the Social Security Act. A general claim for consideration under s 115E was always alive, even though the relevant argument was not put.
I believe it would be a just result if the Tribunal were directed to reconsider the s 115E claim in the light of these respective reasons for judgment. Because the only issue on which the applicant has succeeded arose for the first time in oral argument before this Court, I would make no order as to costs.

JUDGE2

I agree with the orders proposed by Hill J. for the reasons he has given.

In his decision, the learned Senior Member of the Tribunal held that a payment made by the Secretary to the applicant by way of interest would be illegal because it would lack Parliamentary authorisation (see Auckland Harbour Board v. The King (1924) AC 318 at p 326; and see the Constitution, s.81 and Victoria v. Commonwealth and Hayden (1975) 134 CLR 338 at p 392). In seeking to distinguish observations made by the High Court in Evans Deakin, the Tribunal said:
"The essential factor in Evans Deakin was that the

plaintiff company had rights which, once an action was commenced, could be enforced by the Court. However in relation to interest, if the Commonwealth, or any other person or corporation, were to refuse to pay interest, but refunded the capital sum, no action could be brought to recover the interest alone. It is clear on common law principle that a person is not entitled to interest, where money is wrongfully held by another. The Supreme Court Act creates procedural rules for the handling of actions before that Court, but s.94 does not create a substantive right, and does not overrule the common law principle that interest is not a part of the action for money had and received. Accordingly I find that there is no legal liability to pay interest on the money to be refunded. As stated in Re Daniel, a payment of funds in the absence of a legal liability would be unlawful."

I cannot accept this analysis.
It is true that, at the material time, the respondent had no legal right to interest at common law or under any statute. The respondent did have a right at common law to recover the excess now in question (i.e. the principal sum) as monies had and received but he had no right, at common law, to claim interest. Yet, if the respondent were to commence proceedings in a court of competent jurisdiction, he could claim interest under the statutory provisions in force in that jurisdiction. If a claim for interest were made, the court would decide, in the exercise of its judicial discretion, whether it was appropriate to order the payment of interest. Three distinct aspects to the exercise of this discretion would need to be considered by the court: (1) Should any interest be paid? (Ordinarily, this would be answered affirmatively.) (2) In respect of what period should interest be calculated? (Ordinarily, interest would accrue over the whole of the period in question.) (3) What is the appropriate rate of interest? (This would depend upon the evidence, or in the absence of evidence, facts of which judicial notice may be taken.) Because interest claimed under such a statute would be discretionary, it must follow that the respondent had no statutory right to interest. But it is a different thing to say that a payment by the Secretary to the respondent of interest, or of an amount in the nature of interest, is therefore illegal. On the contrary, if there is a potential statutory liability in the Commonwealth to pay interest, it would be within the power of the Secretary to compromise a claim for interest before proceedings in a court were commenced.
In Evans Deakin, the question arose under the Subcontractors' Charges Act 1974 (Q.) which entitled a sub-contractor to a charge on the money payable by an employer to a contractor for the performance of work. The charge secured payment in accordance with the sub-contract of all money that was payable or was to become payable to the sub-contractor for work done by him under the sub-contract. When a sub-contractor gave a notice of claim of charge the employer was required to retain a sufficient part of the money that was or was to become payable by him under his contract to satisfy the claim. If he failed to do so he was personally liable to pay the sub-contractor the amount of his claim. Where the employer did not pay or make satisfactory arrangements for paying the amount claimed, the sub-contractor might recover it from the employer. In proceedings in the Supreme Court of Queensland, Evans Deakin, as sub-contractor, claimed against the Commonwealth a declaration that it was entitled to a charge under the Subcontractors' Charges Act on the moneys payable by the Commonwealth to the contractor and consequential relief. The High Court rejected the Commonwealth's argument that it was not bound by the Subcontractors' Charges Act. It was held that s.64 of the Judiciary Act created substantive rights against the Commonwealth. In other words, the rights created by s.64 were not merely procedural. The High Court said (at pp 265-6):
"On behalf of the Commonwealth it is submitted that

until the proceedings were commenced the Commonwealth could not comply with the provisions of s.ll of the Subcontractors' Charges Act - it could not, e.g., pay money into court in accordance with s.ll(5). On the contrary, it is submitted, the Commonwealth had a positive obligation to act in accordance with the terms of its building contract with Maltry and a payment made otherwise than in compliance with its legal obligations would be rendered illegal by the provisions of ss.81 and 83 of the Constitution and s.34 of the Audit Act 1901 (Cth), as amended. There are two answers to this submission. In the first place, the rights and obligations created by a State statute may be given effect in favour of or against the Commonwealth in a suit to which the Commonwealth is a party, notwithstanding that not all of the provisions of the State statute will be enforceable against the Commonwealth...Secondly, in deciding whether a private person has a right against the Commonwealth, and the Commonwealth has a corresponding obligation, it must be remembered that once a suit is commenced between those parties the rights of the parties in that suit will as nearly as possible be the same as in a suit between subject and subject. If it is possible to say that once a suit is commenced the Commonwealth will be held liable, it follows that it can also be said, before the suit is commenced, that the events which have happened have created a liability which will be recognized and enforced in legal proceedings. A payment in satisfaction of such a liability will not be unlawful.

It is therefore only a half-truth to say that s.64 has

the effect that upon the commencement of a suit the Commonwealth becomes subject to obligations which did not exist beforehand. The section does not have a retrospective operation. At all times before a suit is commenced, it can be known what the rights of the parties will be once the suit is commenced..."

The "half-truth" described by the High Court is illustrated by the circumstances of the present case. If the respondent had commenced proceedings in a court to recover the excess moneys and also claimed interest pursuant to the statute in force in that jurisdiction, although the respondent would not then have a right to interest, the Commonwealth would be potentially liable to pay interest. It would then be lawful for the Secretary to compromise the claim for interest and thereby discharge the Commonwealth's potential liability in that connection. But is the position any different if the respondent had not then commenced the court proceedings? In my opinion, there is no substantial difference.
The question is not whether the Secretary should, or should not, pay or seek to pay any amount by way of interest or its equivalent. That is a matter entirely within the Secretary's judgment or discretion. The question is whether it would offend s.81 of the Constitution if the Secretary were to pay an amount by way of interest, or its equivalent, in the absence of any court proceedings in which interest is claimed.
At all material times the Commonwealth was subject to a potential liability to pay interest under one or other of the statutes in force in the several jurisdictions in which the respondent could have litigated his claims. In my view, it must follow from the existence of this potential statutory liability, that the principle stated in the Auckland Harbour Case can have no application here. This is so independently of the operation of s.ll5E of the Social Security Act. I agree with Hill J. that this Act provides an answer to the suggestion that the payment of interest or its equivalent would lack statutory sanction. But the statutory provisions in force in this State conferring power upon courts to award interest provide an alternative source of Parliamentary authorisation for such a payment. This source is available notwithstanding that proceedings have not yet been instituted in a court for recovery of the amount in dispute.
This is not to say that the Secretary has any obligation to pay interest, or its equivalent. Nor is it to say that the Secretary ought to exercise his power to compromise any such claim in any particular way. But it is not correct to suggest that, by virtue of the Auckland Harbour principle, any such payment would be illegal unless and until court proceedings had been commenced.

JUDGE3

On 3 March 1975 the applicant Mr. Trimboli was injured while levering a piece of metal with a bar in the course of his employment.

Between 16 October 1978 and 18 May 1983 he was paid sickness benefits under the Social Security Act 1947 ("the Act"). On 12 April 1984 he was awarded a lump sum of $50,000 in the Workers' Compensation Commission in full redemption of his rights under the Workers' Compensation Act 1926 (NSW) in respect of the injury. There is no dispute before us that some part of that lump sum was paid in respect of the same incapacity as the sickness benefits were paid within the meaning of ss.115C and 115D of the Act. Those sections and s.115E provide relevantly as follows:
s.115C(1)"Where it appears to the Secretary that a

person is, or may become, liable to make a payment by way of compensation in respect of the incapacity of another person who is, or was, qualified to receive a sickness benefit in respect of that incapacity, the Secretary may, by notice in writing served on the first-mentioned person, inform him that the Secretary, on behalf of the Commonwealth, proposes to, or may wish to, recover from him an amount equal to the whole or some part of the amount of sickness benefit paid to the other person in respect of that incapacity ..."

s.115D(1)"Where it appears to the Secretary that an

insurer under a contract of insurance, is, or may become, liable to indemnify a person (in this section referred to as the 'client'), in whole or in part, against the liability, or the possible liability, of the client to make a payment or payments by way of compensation in respect of the incapacity of another person who is, or was, qualified to receive a sickness benefit in respect of that incapacity, the Secretary may, by notice in writing served on the insurer, inform the insurer that the Secretary, on behalf of the Commonwealth, proposes to, or may wish to, recover from him an amount equal to the whole or some part of the amount of sickness benefit paid to that other person in respect of that incapacity.

(2) Where an insurer is liable, under a contract of insurance, to indemnify a client, in whole or in part, against the liability of the client to make a payment or payments by way of compensation in respect of the incapacity of another person who is, or was, qualified to receive a sickness benefit in respect of that incapacity, the Secretary may serve a notice in writing on the insurer (whether or not a notice has been served on the insurer under sub-section (1)) specifying the amount that the Secretary, on behalf of the Commonwealth, proposes to recover from the insurer, being an amount not exceeding the amount of the sickness benefit paid to that other person in respect of that incapacity ..."

s.115E "For the purposes of this Division, the

Secretary may treat the whole or a part of payment by way of compensation that has been, or that will be, made in respect of an incapacity as not having been made or as not being, or as not likely to become, liable to be made, if the Secretary considers that, in the special circumstances of the case, it is appropriate to do so."

On 11 May 1983 Mr. Trimboli applied for an invalid pension and was examined by a Commonwealth Medical Officer, Dr. McMillan. As a result of that examination Mr. Trimboli was awarded an invalid pension backdated to 19 May 1983. Thus the sickness benefits which were being paid ceased from that day.
The Department of Social Security on 18 May 1984 advised Industrial Liability Underwriters, the employer's insurers, that the Department had an interest in the case under Division 3A of Part III of the Act. It would seem that the Department initially notified the insurers under s.115D of the Act that the whole of the sickness benefits paid by the Department to Mr. Trimboli should be refunded. This was an amount of approximately $32,660.48.

In determining that the relevant sum was $32,660.48 the Department applied, as it is now conceded, the wrong principle. It sought later to recalculate the amount of the refund to it in accordance with the "Edwards" formula (Re Edwards and Director General of Social Services (1981) 4 ALD 341) and notified Mr. Trimboli's solicitors of the recalculated sum, namely $15,113.96, on 26 September 1984. Accordingly, on 16 October 1984 the insurers paid to the Department the sum of $15,113.96. Inferentially the balance was refunded around this time to Mr. Trimboli.
On 18 June 1984 Mr. Trimboli had instituted an appeal to the Social Security Appeals Tribunal against the Department's recovery from him of the amount of $32,660.48. On 25 February 1985 the Tribunal recommended that the amount of the "charge" be reduced to $15,113.96, the figure which the Department had itself recalculated in September 1984.
The issues before that Tribunal were stated in the Tribunal's recommendation to be:
"(1) Whether the lump sum workers' compensation payment

is in whole or in part a payment in respect of the same incapacity in respect of which sickness benefit was paid to you, which payments the Department is now seeking to recover.

(2) Whether, even if there is legal basis for the Department to take s.115 recovery action, the Secretary should exercise his discretion under s.115E of the Social Security Act to treat the whole or part of your compensation claim as not having been made.

(3) If recovery action is considered to be both legal

and appropriate, the further issue arises of the method to be used to calculate the amount of sickness benefit payments which should be recovered."

Mr. Trimboli then sought review of the decision of the Social Security Appeals Tribunal pursuant to s.29(1) of the Administrative Appeals Tribunal Act 1975. Among the amended grounds of review relied upon by Mr. Trimboli was a ground that Mr. Trimboli was "entitled to interest on moneys unlawfully appropriated from his workers' compensation award being:

(i) Interest on the amount of $32,660.48 from May to November 1984

(ii) Interest on the amount of $15,113.96 from November 1984 to November 1987

(iii) Alternative to (b) (sic) above interest on the amount of $2,515.88 from November 1984 to November 1987."

The appropriate interest rate was said to be that applicable in the relevant period in the Supreme Court of NSW.
The Tribunal constituted by Dr. Hayes, Senior Member stated the issues for decision before it in the following terms:

"This left before the Tribunal the following issues, first whether the lump sum redemption was, in whole or in part, a payment in respect of the same incapacity for which sickness benefit was paid; secondly, whether the Secretary should have exercised his discretion under s.115E of the Act to treat the whole or part of the compensation claim as not having been made; and thirdly, if recovery was appropriate, what method should have been used to calculate the charge. As part of the third issue, it was further submitted that the Tribunal should consider whether interest should have been paid on the amount of money wrongfully withheld from the compensation award by the Department."

Although it does not say so expressly, the Tribunal has clearly found, and its finding is not disputed, that the lump sum redemption was in part a payment in respect of the same incapacity for which sickness benefit was paid. Further, the Tribunal refused to exercise the discretion under s.115E, but, applying the formula in Re Castronuovo and Director General of Social Security 1984) 5 ALN No. 344 and taking into account certain medical expenses, was of the view that the proper amount which the Department was entitled to recover was $12,544.62, leaving the amount of $2,569.34 to be refunded to the applicant. No interest was said to be payable to the applicant.
Before us two substantial matters were argued. The first of these matters was expressed in the amended notice of appeal as follows:
"1. The learned senior member erred in law in holding

the Administrative Appeals Tribunal had no power to direct or otherwise order that the excess of a charge under Social Security Act 1947 ("the Act") be refunded to the appellant, together with an amount for interest on such funds for the period during which the appellant had been deprived of such funding by the Respondent."

Dr. Hayes discussed in his reasons the question of the power of the Administrative Appeals Tribunal to award interest, a question that had also been raised and answered adversely to the applicant in Re Daniel and Secretary, Department of Social Security (1986) 10 ALD 219.
Before the Tribunal, as before us, it was argued that following Maguire v. Simpson (1977) 139 CLR 362; and The Commonwealth v. Evans Deakin Industries Ltd. (1986) 161 CLR 254, s.64 of the Judiciary Act operated whether or not curial proceedings had been commenced to make applicable to the Tribunal either s.94 of the Supreme Court Act (NSW) or s.83A of the District Court Act (NSW) and thus to permit the Tribunal to award interest.
In the Evans Deakin case the High Court was concerned on a demurrer with the applicability of a Queensland Act, the Subcontractors' Charges Act 1974, to arrangements between the Commonwealth and Evans Deakin Industries Ltd. In the course of the joint judgment of Gibbs C.J., Mason, Wilson, Deane and Dawson JJ. their Honours, in dealing with an argument that until legal proceedings were commenced the Subcontractors' Charges Act had no application because s.64 of the Judiciary Act is applicable only to curial proceedings, said at pp 265-6:

"...it must be remembered that once a suit is commenced between those parties the rights of the parties in that suit will as nearly as possible be the same as in a suit between subject and subject. If it is possible to say that once a suit is commenced the Commonwealth will be held liable , it follows that it can also be said, before the suit is commenced, that the events which have happened have created a liability which will be recognised and enforced in legal proceedings. A payment in satisfaction of such a liability will not be unlawful."

While it might, in my view, follow from the High Court's judgment in Evans Deakin that the Department could compromise a claim for an excess of sickness benefits withheld under s.115D by paying to the claimant interest rather than litigating the issue in a court and becoming liable to interest pursuant, for example, to s.94 of the Supreme Court Act, that is not the issue before us.
A perusal of the social security legislation shows that it is not concerned with the mechanics of recovery of benefits withheld in circumstances such as the present. That is left to the general law where the cause of action would be for money had and received (cf. Werrin v. The Commonwealth (1937) 59 CLR 150; Mason v. State of NSW (1958) 102 CLR 108; Kodak (Australia) Pty. Ltd v. The Commonwealth (1989) 89 ATC 4010 at p 4013). No doubt if proceedings were commenced in an appropriate court for recovery of moneys so withheld the court would in the normal case order interest to be paid, cf. Bennett v. Jones (1977) 2 NSWLR 355, although it should be noted that an order of interest will be discretionary. But it is clear that there is no right to interest at common law. Cf. Hungerfords v. Walker (High Court of Australia, unreported, 9 February 1989).
If there is to be an obligation on the Department to pay interest with a correlative right in a pensioner to recover benefits withheld with interest, that right must be found in the Social Security Act. If there is to be a power in the Social Security Act to award interest, which power can on review be exercised by the Administrative Appeals Tribunal under s.43(1) of the Administrative Appeals Tribunal Act, that power must be found in the statute whereby the administrative tribunal is constituted. There is no such statutory power; nor is there a power in any person or tribunal conferred under the Social Security Act to award damages for the wrongful detention of money such as could under the principles discussed in the Hungerfords' case permit the damages suffered to be calculated by reference to interest foregone.
Further, as the respondent argued, the matter was not properly before the Administrative Appeals Tribunal at all, at least if the issue was whether the Tribunal could order a refund of benefits withheld plus interest.
Under s.25 of the Administrative Appeals Tribunal Act the jurisdiction of that Tribunal is, for present purposes, limited to the review of decisions made in the exercise of powers conferred by the relevant enactment, that is to say the Social Security Act. That Act in s.17 confers upon the Administrative Appeals Tribunal jurisdiction to review a decision made by the Secretary under s.16 and to affirm, vary or set aside a decision of an officer that has been reviewed by a Social Security Appeals Tribunal.
In the present case there is not the slightest indication that the question of interest was considered by either the Social Security Appeals Tribunal or any officer of the Department including the Secretary. Indeed, the first occasion that the question of interest arose seems to have been in the amended grounds of appeal to the Administrative Appeals Tribunal. In these circumstances it must follow that the question of the power of that Tribunal to order a refund of the amount wrongly withheld plus interest cannot (even assuming a decision not to pay interest is a decision under the Social Security Act) arise. Cf. Secretary, Department of Social Security v. Riley (1987) 76 ALR 393.
But it does not follow that the question of the applicant being wrongfully deprived of his money by the actions of the Department was an irrelevant question.
An issue both before the Social Security Appeals Tribunal and the Administrative Appeals Tribunal was the question of the exercise of discretion under s.115E of the Social Security Act. In reviewing that exercise of discretion the Administrative Appeals Tribunal has all the powers and discretions conferred upon the Secretary under s.115E (see s.43 of the Administrative Appeals Tribunal Act).
It was conceded by counsel for the respondent that the fact that the applicant had, as a result of wrong calculations made by the respondent been deprived of money properly his, was a relevant matter which the decision maker could have taken into account under s.115E.
Power to reduce the amount of sickness benefits to be refunded by the applicant arises where the Secretary or the Tribunal in his place considers that the circumstances of the case are "special" and that it is appropriate to reduce the amount of sickness benefits which are to be refunded to the Department.
It is neither appropriate nor proper here to attempt a definition of what circumstances will be "special". The occasions when circumstances are special will vary with the facts of each particular case. Further, the decision as to when it will be "appropriate" to exercise the power under s.115E involves the exercise of a discretion which is extemely broad and which is not to be confined, save in accordance with usual principles, namely, that it is to be exercised bona fide and for the purposes for which the discretion is conferred, such purposes being determined by reference to the policy and purpose of the Social Security Act. Cf. Giris Pty. Ltd. v. The Commissioner of Taxation of the Commonwealth of Australia (1969) 119 CLR 365 at p 384.
The Tribunal does not appear in considering the exercise of its discretion under s.115E to have considered the fact that the applicant was wrongly deprived of money to which he was entitled, and so lost the opportunity cost of that money, as being a special circumstance occasioning the exercise of discretion under s.115E. Rather, the Tribunal concentrated on the question of interest in the context of whether any amount in excess of the charge calculated by the Tribunal should be refunded to the applicant. Indeed, it would seem that this was the only way the case was argued in the Tribunal.
In considering the exercise of discretion Dr. Hayes made reference to the factors set out in a document (T.41), being a report of an officer of the Department made in July 1984 as to the economic circumstances of the applicant at that time. It may be noted that the report referred to the fact that the applicant had not received the settlement amount from his workers' compensation case as it was being held awaiting the outcome of his appeal and that he had borrowed between $12,000 and $13,000 from friends to meet past commitments and was awaiting release of compensation moneys to pay his debts.
While there was material before the Tribunal from which it was clear that the Department had miscalculated the amount of the charge and that the applicant had thereby been deprived of money which was rightly his from the redemption award, it does not seem from the reasons of the Tribunal that this was a factor taken into account under s.115E notwithstanding that it was conceded before us, and in my opinion correctly conceded, that these were relevant matters which could be taken into account in determining both that there were special circumstances in the present case and that it was appropriate to exercise the discretion under s.115E.
It seems to me that while a pensioner who has been deprived of money may have no legal right to interest unless awarded it in curial proceedings, the exercise of discretion under s.115E in an appropriate case can substantially put a pensioner who does not commence court proceedings in the same position as one who does and thereby prevent an anomalous situation arising.
However, whether in the present case the discretion under s.115E should be exercised in favour of the applicant having regard to the department's miscalculations and the time in which the applicant was deprived of his money, and if so the extent to which the charge should be reduced, are matters vested in the Secretary or, in the case of a proceeding by way of review to the Tribunal, in the Tribunal. These are not matters for this Court.
While I am of the opinion that the Tribunal committed an error of law in not taking into account the above matters it is my view that the proper course would be to remit the proceedings to the Tribunal to enable it to reconsider the exercise of discretion under s.115E having regard to these reasons.
The second substantial matter said to involve an error of law by the Tribunal was a finding by Dr. Hayes that there was insufficient evidentiary basis on which to conclude that the applicant would have been entitled to the invalid pension from mid 1982. This finding was made in connection with an argument that the discretion under s.115E should be exercised so as to disregard the receipt of sickness benefits during the period from 1982 through to the grant of the invalid pension in May 1983.
There are a number of answers to this argument. Assuming, without needing to determine the issue, that this was a matter properly before the Tribunal (the issue of whether there was a prior entitlement to invalid pension not having been raised until the proceedings in the Administrative Appeals Tribunal commenced) it has not been demonstrated to me that there was any error of law in the relevant sense made by the Tribunal. There was before the Tribunal a number of medical certificates from Dr. Singh certifying in respect of particular periods specified that the applicant was unfit to work. Also in evidence was a report of Dr. Singh dated 8 September 1980 in which, inter alia, he said: "At present Mr. Trimboli is totally unfit for work. The prognosis for future recovery is guarded."
In support of the applicant's claim for an invalid pension Dr. Singh in May 1983 stated that the applicant's condition had deteriorated. The Commonwealth Medical Officer, Dr. McMillan, who reported, diagnosed the applicant as having chronic invalidism/hypochondriasis. He concluded that the applicant was not employable. The printed form required the medical officer to tick a box indicating whether in his opinion during the 12 months prior to the examination the claimant's condition had improved, retrogressed, remained stationary or whether the officer was unable to provide an opinion on the matter. The officer in the present case ticked the box "remained stationary".
On the basis of the medical officer's report and other reports of Dr. Singh it was argued before the Tribunal that the Tribunal should infer that as the applicant's condition had remained stationary for 12 months the applicant was entitled to an invalid pension at least 12 months previously.
It was argued before this Court that there was no material before the Tribunal founding a proper basis for rejecting Dr. McMillan's conclusions and in particular that the Tribunal had failed to take into consideration the other reports to which I have referred above.
However, the reasons for decision of the Tribunal show that Dr. Hayes was fully aware of the reports of Dr. Singh, and there is no suggestion in his reasons that he did not consider them in reaching his factual conclusion that there was not a sufficent evidentiary basis to make a finding that the applicant would have been entitled to an invalid pension from mid 1982. Indeed, having regard to Dr. Singh's reports, there would be much to be said for the view that in the 12 months period stipulated the applicant's health had deteriorated so that it logically did not follow that the applicant had to be unfit for work 12 months before Dr. McMillan's report.
An appeal to this Court from the Administrative Appeals Tribunal lies only on a question of law: s.44(1) of the Administrative Appeals Tribunal Act 1975. As this Court said in Brown v. Repatriation Commission (1985) 60 ALR 289 at p 291:

"Although it is necessary in some appeals ... for this Court to consider the evidence before the Tribunal (for example, where the alleged question of law is that there is no evidence upon which the Tribunal could reasonably support its finding) the court should be cautious before embarking on its own analysis of the evidence where the task of assessing facts has been placed by the legislature in the hands of specialist bodies such as the Tribunal and the Commission which are equipped to deal with them."

While the Court was there speaking of the Repatriation Review Tribunal the same is equally true of the Administrative Appeals Tribunal.
In Edwards (Inspector of Taxes) v. Bairstow (1956) AC 14, Lord Radcliffe described at p 36 the case where the appellate court on comparable legislation could intervene to upset a finding of fact as being one where,

"If the case contains anything ex facie which is bad law and which bears upon the determination, it is, obviously, erroneous in point of law. But, without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene. It has no option but to assume that there has been some misconception of the law and that this has been responsible for the determination. So there, too, there has been error in point of law. I do not think that it much matters whether this state of affairs is described as one in which there is no evidence to support the determination or as one in which the evidence is inconsistent with and contradictory of the determination, or as one in which the true and only reasonable conclusion contradicts the determination. Rightly understood, each phrase propounds the same test."

It is clear that whichever formulation of the test may be propounded there remains ultimately in the present case only a challenge on a question of fact, not a challenge on a question of law.
In an attempt to elevate a question of fact into a question of law the applicant sought to express the errors of law, first by alleging a failure to take into account in exercising the discretion under s.115E the medical reports in question, and secondly by asserting that the Tribunal's finding of fact was not based on any material before the learned Member upon which such holding could properly be based.
However, no matter how the point is sought to be expressed, it remained a question of fact and as such within the function of the Tribunal to decide, it being clear that the learned Senior Member did have before him the medical evidence, considered it but was unable to conclude that there was any evidentiary support for the proposition that the applicant was unemployable 12 months before he was examined by Dr. McMillan.

I am therefore of the view that the appeal on this point

fails.

It follows that while I am of the view that the Appeal should be allowed, the only issue upon which the Applicant succeeded was one in respect of which no submissions were made to the Tribunal and which was not the subject of any ground of appeal. Indeed, it arose only during the course of oral argument. In these circumstances, I think that the proper order should be that no order be made as to costs.

[1989] FCA 86

23 MARCH 1989