Australian Postal Corporation v Sinnaiah [2013] FCAFC 98 | Case summary

THE COURT 1 Section 37(1) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("SRC Act") entitles a rehabilitation authority to make a determination that an employee who has suffered an injury resulting in incapacity for work or an impairment undertake a rehabilitation program. Absent a reasonable excuse for not doing so, s 37(7) provides for the suspension of an employee's rights to compensation under the Act or to institute or continue proceedings under the Act until the employee begins to undertake the program. 2 The question in this appeal is whether the Administrative Appeals Tribunal erred in construing s 37(7) as applying only to the employee's rights with respect to the injury the subject of the determination, rather than to the employee's rights with respect to any or all injuries. The answer is that it did not. 3 The first respondent, Indrani Sinnaiah is an employee of the Australian Postal Corporation ("Australia Post"). She claims to have suffered various injuries for which her employer is liable to pay compensation under the SRC Act. Australia Post accepted liability for two of them (to the lower back and the right shoulder) but denied liability for others. 4 On 9 July 2012 a rehabilitation authority (in this case the principal officer of Australia Post by his or her delegate) determined that Ms Sinnaiah undertake a rehabilitation program for her right shoulder injury, more particularly described as "right rotator cuff irritation with pain in the proximal and right shoulder region". The rehabilitation program involved undertaking work for five hours a day five days a week with certain restrictions as to duties, such as avoidance of physical duties and elevation of the right shoulder above 60 degrees. 5 Ms Sinnaiah failed to undertake the program and on 2 August 2012 Australia Post determined that her entitlement to compensation was henceforth suspended until such time as she embarked upon it. On 6 August 2012, through her solicitors, Ms Sinnaiah sought a reconsideration of that decision. In a determination made on 11 September 2012 the reconsideration officer affirmed the previous determinations, decided she should commence rehabilitation in accordance with the program, and found that her "entitlement to relevant compensation payments [was] suspended on and from 2 August 2012 until such time as [she] begins to undertake the rehabilitation program" (emphasis added). Despite the language in which the determination was couched, Australia Post contends that the effect of s 37(7) of the SRC Act is to suspend all Ms Sinnaiah's rights to compensation under the Act and to institute or continue any proceedings under the Act, not just her rights with respect to the right shoulder injury. 6 At the time of the tribunal's decision there were pending in the tribunal five applications by Ms Sinnaiah under s 64 of the SRC Act for review of reconsideration decisions. In the order in which they were filed those applications concern decisions made by Australia Post: (i) accepting liability to pay compensation for a right shoulder injury but denying liability for other claimed injuries affecting Ms Sinnaiah's right hand, neck, lower back, upper back, left hand and elbow; (ii) denying present liability to pay compensation for medical treatment expenses and weekly incapacity payments in respect of a previously accepted lower back injury; (iii) denying liability for a claimed "secondary severe depression" injury; (iv) requiring Ms Sinnaiah to undertake a rehabilitation program in respect of the accepted right shoulder injury; and (v) finding that Ms Sinnaiah did not have a reasonable excuse for her failure to undertake the rehabilitation program. 7 Australia Post argued that s 37(7) deprived the tribunal of jurisdiction to consider any of these applications. The tribunal rejected the contention, holding that the subsection only operates to suspend an employee's rights in relation to the particular injury the subject of the rehabilitation program (here, the right shoulder injury). Citing the High Court's decision in Canute v Comcare (2006) 226 CLR 535 the tribunal emphasised "the pivotal importance" of the concept of injury in the SRC Act and held (at [34]) that compensation under the Act is "unavoidably and unseverably tied to an injury". 8 The tribunal's decision is not susceptible to appeal under s 44 of the Administrative Appeals Tribunal Act 1976 (Cth) as it is not a final decision or determination: Director-General of Social Security v Chaney (1980) 31 ALR 571. No doubt it is for this reason that Australia Post seeks constitutional writs under s 39B of the Judiciary Act 1903 (Cth) to have the decision set aside for jurisdictional error. It submits that the jurisdictional error consists of an error of law or a constructive failure by the tribunal to exercise its "statutory power" by "seeking to read down the scope and operation" of s 37(7). In particular, it submits that the tribunal "misconstrued or misunderstood its powers" and thereby misapplied them by wrongly holding that: The Minister's second reading speech properly informed the meaning of s 37(7) so that it should be read narrowly; It was a more natural reading for the section to be read narrowly; The section should be read narrowly so that any suspensions should be directed only at the employee's rights in relation to the specific failure in question, which is a failure to undertake the program determined under s 37(1) with respect to the specific injury; and That s 37(7) of the Act only operates to suspend compensation in respect of the particular injury the subject of the rehabilitation program under s 37(1). 9 Australia Post also submitted that the tribunal erred in relying on the Minister's second reading "speeches", referring in particular to the remarks in Harrison v Melhem (2008) 72 NSWLR 380. 10 On 23 July 2013 Comcare filed an interlocutory application seeking to be joined as a party to the proceedings pursuant to s 108C(8)(b) of the SRC Act. Once the application is made, the Court has no discretion to refuse it. Consequently, on 24 July 2013 orders as sought were made. Comcare made submissions in support of Australia Post's position. 11 Section 37 relevantly provides: 37 Provision of rehabilitation programs (1) A rehabilitation authority may make a determination that an employee who has suffered an injury resulting in an incapacity for work or an impairment should undertake a rehabilitation program. … (3) In making a determination under subsection (1), a rehabilitation authority shall have regard to: (a) any written assessment given under subsection 36(8); (b) any reduction in the future liability to pay compensation if the program is undertaken; (c) the cost of the program; (d) any improvement in the employee's opportunity to be employed after completing the program; (e) the likely psychological effect on the employee of not providing the program; (f) the employee's attitude to the program; (g) the relative merits of any alternative and appropriate rehabilitation program; and (h) any other relevant matter. … (5) Where an employee is undertaking a rehabilitation program under this section, compensation is not payable to the employee under section 19 or 31 but: (a) if the employee is undertaking a full-time program - compensation is payable to the person of an amount per week equal to the amount per week of the compensation that would, but for this subsection, have been payable under section 19 if the incapacity referred to in that section had continued throughout the period of the program; or (b) if the employee is undertaking a part-time program - compensation is payable to the employee of such amount per week as the relevant authority determines, being an amount not less than the amount per week of the compensation that, but for this subsection, would have been payable to the employee under this Act and not greater than the amount per week of the compensation that would have been payable under paragraph (a) if the employee had been undertaking a full-time program. … (7) Where an employee refuses or fails, without reasonable excuse, to undertake a rehabilitation program provided for the employee under this section, the employee's rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the employee begins to undertake the program. (7A) However, subsection (7) does not operate to suspend the employee's right to compensation for the cost of medical treatment that is payable under section 16. (8) Where an employee's right to compensation is suspended under subsection (7), compensation is not payable in respect of the period of the suspension. 12 "Rehabilitation authority" and "rehabilitation program" are defined in s 4 of the Act. Nothing, however, turns on these definitions. 13 Section 37 appears in Pt III, Div 3 of the SRC Act. Pt III is entitled "Rehabilitation", Div 3 "Rehabilitation programs". Reference should also be made to s 36. Section 36 enables the rehabilitation authority to arrange for the assessment of the employee's capacity to undertake a rehabilitation program. Section 36(4) is in substantially similar terms to s 37(7). Section 36 relevantly provides: 36 Assessment of capability of undertaking rehabilitation program (1) Where an employee suffers an injury resulting in an incapacity for work or an impairment, the rehabilitation authority may at any time, and shall on the written request of the employee, arrange for the assessment of the employee's capability of undertaking a rehabilitation program. (2) An assessment shall be made by … (3) The rehabilitation authority may require the employee to undergo an examination by the person or panel of persons making the assessment. (4) Where an employee refuses or fails, without reasonable excuse, to undergo an examination in accordance with a requirement, or in any way obstructs such an examination, the employee's rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the examination takes place. (4A) However, subsection (4) does not operate to suspend the employee's right to compensation for the cost of medical treatment that is payable under section 16. … (7) Where an employee's right to compensation is suspended under subsection (4), compensation is not payable in respect of the period of the suspension. … 14 The argument in this Court was substantially the same as the argument advanced before the tribunal. In substance, the case mounted by Australia Post (and supported by Comcare) was that the construction for which it contended reflected the natural or ordinary meaning of the text and accorded with the purpose of the Act. Both Australia Post and Comcare submitted that there was no reason to import words into the subsection. They also submitted that when read in its statutory context, s 37(7) required the suspension of all rights: past, present and future. If the argument is correct, then it would apply equally to the rights suspended by s 36(4). 15 For the cogent reasons given by the tribunal, the argument must be rejected. 16 The nub of the tribunal's reasons appears in [33]-[36] of its decision. It is convenient to reproduce those passages here. 33. The subsection is concerned with a rehabilitation program in relation to an impairment arising from a particular injury. This context makes it appropriate to interpret references to "rights to compensation" and to "institute or continue proceedings" as being directed to the particular injury which is the subject of the rehabilitation program which has not been undertaken. This is a more natural reading rather than a reading which suspends all rights in relation to any injury or impairment whether or not the subject of the rehabilitation program in respect of which the failure occurs. 34. Compensation under the Act is unavoidably and unseverably tied to an injury. In the immediate context of a rehabilitation program provided to an employee under s 37, the injury is that specified in the determination under s 37(1) and notified under s 38(1), in respect of which compensation is payable under s 37(5). That being so, on the plain language of the section, it follows that the suspended rights to which s 37(7) refers are all of the employee's rights to compensation and to continue or institute any proceedings under the Act in respect of the injury that is the subject of a determination under s 37(1). 35. Australia Post's submission that there is no cause to import words into s 37(7) to properly understand the meaning of its terms in plain language is correct. There is no compelling reason to read down the section or, conversely, to read it large. The words speak plainly enough from the page when they are read in context. One cannot step over or around s 37(1) when reading s 37(7) - "…the meaning of any statutory provision…, and thus its range of operation, must be determined 'by reference to the language of the instrument viewed as a whole'". The words of s 37(7) can be "intelligibly applied to the subject matter" with which s 37 deals, consistent with the matrix of interlaced provisions in Parts II, III and V of the Act, and promoting the specific purpose of providing a strong incentive for an employee who has suffered an injury resulting in an incapacity for work, or an impairment, to undertake rehabilitation and to return to work as soon as possible after the injury. 36. This interpretation strikes a balance between the failure to undertake the program and the extent and effect of the suspension, whereas the broader interpretation for which Australia Post contends has a draconian effect in that it suspends all rights to compensation or to pursue all proceedings in respect of all injuries and impairments, regardless of the time or circumstances surrounding their occurrence. A strong incentive based on suspending an injured employee's rights to compensation in respect of an injury is one thing, the consequence of giving s 37(7) a general or ambulatory effect, dissociated from any specific injury, is entirely another. 17 Contrary to the submissions of Australia Post, the tribunal did not rely on the Minister's second reading speech; it was Australia Post, itself, which did. Its written submissions before the tribunal are replete with references to the Minister's comments. The tribunal rightly found that the speech was of no assistance, describing it at [17] as "equivocal". Australia Post also criticised the tribunal for relying on the Explanatory Memorandum to the Safety, Rehabilitation and Compensation Amendment Bill 2011 (Cth). The tribunal certainly considered it. Yet, once again, it was Australia Post, rather than the tribunal, who relied upon it. It contended that the introduction of the amendment which inserted s 37(7A) into the Act supported its construction of s 37(7). It was for that reason, no doubt, that the tribunal considered the Explanatory Memorandum. At [20], however, the tribunal said that there was no need to resort to any extrinsic material. 18 The contextual argument put in this court differed a little from the argument below. Comcare pointed to the terms of ss 50(5)(b) and 118(4) of the Act, contrasting them with s 37(7). 19 Section 118(4) is in the following terms: Where a claimant for compensation refuses, or fails, without reasonable excuse, to give a statutory declaration under subsection (3), the claimant's rights to compensation under this Act in respect of the injury or loss of, or damage to, property to which the claim relates, and to institute or continue any proceedings under this Act in relation to that compensation, are suspended until the statutory declaration is given. (Emphasis added.) 20 The apparent purpose of s 118 is to prevent double recovery of State and Commonwealth benefits in respect of the same injury: Telstra Corporation Limited v Worthing (1999) 197 CLR 61 at [37]. Subsection (1) prohibits an employee or the dependants of a deceased employee from recovering compensation under the SRC Act in respect of an injury, loss of, or damage to property or for the benefit of a dependant for which State workers' compensation in respect of that injury, loss or damage has been paid. Subsection (2) allows a relevant authority under the Act to recover any payment of compensation it has made if State workers' compensation is recovered in respect of the same injury, loss or damage or for the benefit of the dependant. Subsection (3) entitles a relevant authority that has received a claim to require the claimant to give it a statutory declaration stating whether any State workers' compensation has been paid "to or in respect of the claimant in respect of the injury … to which the claim relates". Subsection (4) imposes a sanction for non-compliance with such a requirement. 21 Section 50 entitles Comcare to bring proceedings against a third party or to take over the conduct of an existing claim where: it has paid compensation; the compensation is paid with respect to an injury, loss, damage or death occurring in circumstances that appear to create a legal liability in the third party to pay damages in respect of the injury etc.; and no proceedings have been brought or, having been brought, have not been prosecuted. 22 Section 50(5) provides: If Comcare makes or takes over the conduct of a claim under this section: (a) the employee or dependant must comply with any reasonable requirement of Comcare for the purposes of the claim; and (b) if the employee or dependent fails to comply with such a requirement, the right of the employee or dependent to compensation under this Act in respect of the injury, loss, damage or death to which the claim relates is suspended until such time as the employee or dependent complies with the requirement. (Emphasis added.) 23 The submission, in which Australia Post joined, was that, had Parliament intended by s 37(7) to suspend rights only in relation to the injury the subject of the rehabilitation program, then it could easily have used the same kind of language in s 37 as it did in ss 50(5) and 118(3). 24 The draftsperson could have used the same language in s 37(7) as was used in ss 118(4) and 50(5)(b) if his or her intention were the same. On the other hand, the context in which the language is used in each case is different. The sections also appear in different Parts of the Act. Whilst the general principle is that an Act must be read as a whole, Professors Pearce and Geddes suggest that where, as here, the Parts into which the Act is divided are self-contained, the scope of the subsection may be derived from the Part, rather than from the Act as a whole (Statutory Interpretation in Australia (7th ed, LexisNexis, 2011) at [4.4]). 25 There are other reasons to think that no assistance can be derived from a comparison with the other sections. Section 50(5)(b) does not provide for any exception where the employee has a reasonable excuse. The qualifying words (emphasised above) in ss 118(4) and 50(5)(b) may have been added for more abundant caution and/or merely to pick up the language in the earlier subsections. The draftsperson might have thought that the meaning of "rights" in s 37(7) was obvious from the immediate context and the additional words were unnecessary: subs (1) defined the scope of subs (7). 26 Comcare submitted that s 37(1) merely served as a "trigger" for the operation of all the remaining subsections and once the conditions in the subsection were satisfied it was "spent". We reject the submission. As the tribunal said at [35] of its reasons, it is not possible to "step over or around s 37(1) when reading s 37(7)", just as s 37 must be read with s 36. The rehabilitation program mentioned in s 37(7) is one in respect of which a determination under s 37(1) has been made: Pascoe v Australia Post Corporation (2004) 77 ALD 464 at [14]. That is to say, it is a program to rehabilitate the employee for work following an injury resulting in incapacity for work or an impairment. It is also the program for which the employee may have been assessed as suitable under s 36(1). 27 Australia Post submitted that s 37(7) must be construed by reference to the language of the provision and in the light of the purpose of the legislation (Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] per McHugh, Gummow, Kirby and Hayne JJ). Australia Post contended that the paramount purpose of the Act was to promote the rehabilitation of injured employees, pointing to the fact that the word "rehabilitation" appears before the word "compensation" in the long title. It also referred to s 15AA of the Acts Interpretation Act 1901 (Cth), which requires a court to prefer a construction that would promote the purpose or object of the Act to any other interpretation. This much may be accepted. But the SRC Act has multiple purposes. It is true that rehabilitation is an important feature of the legislation. But so, too, is compensation. It is also true (as Comcare in particular argued) that rehabilitation is concerned with the person, not the injury. These truisms do not take the matter very far. 28 As Gleeson CJ observed in Carr v Western Australia (2007) 232 CLR 138 at [5]-[7]: In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act is to be preferred to a construction that would not promote that purpose or object … That general rule of interpretation, however, may be of little assistance where a statutory provision strikes a balance between competing interests, and the problem of interpretation is that there is uncertainty as to how far the provision goes in seeking to achieve the underlying purpose or object of the Act. Legislation rarely pursues a single purpose at all costs. Where the problem is one of doubt about the extent to which the legislation pursues a purpose, stating the purpose is unlikely to solve the problem … Ultimately, it is the text, construed according to such principles of interpretation as provide rational assistance in the circumstances of the particular case, that is controlling. … [T]he general purpose of legislation of the kind here in issue is reasonably clear; but it reflects a political compromise. The competing interests and forces at work in achieving that compromise are well known. The question then is not: what was the purpose or object underlying the legislation? The question is: how far does the legislation go in pursuit of that purpose or object? 29 These observations were recently cited with approval by the High Court in Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36; (2013) 87 ALJR 1009 at [40]. The Court noted (at [41]) that "[t]he idea contained in the last paragraph of this passage was pithily expressed by the Supreme Court of the United States in Rodriguez v United States 480 US 522 at 525-526 (1987): '[N]o legislation pursues its purposes at all costs.'" 30 In our opinion the words "under this Act" in s 37(7) were inserted to distinguish between rights arising under the Act (statutory rights) and rights arising independently of the Act (such as common law rights) and so to preserve the employee's rights, if any, to sue for damages at common law. They were not inserted in order to extend the suspension beyond the injury for which the rehabilitation program is ordered. The rights with which s 37(7) is concerned are the rights to compensation arising from that injury and the entitlement to enforce those rights by litigation. As the tribunal said, this is the natural way to approach the subsection. As it happened, it is also the way the determining authority actually approached the matter in this very case. 31 This construction is aided, not contradicted, (as Australia Post submitted) by the inclusion of s 37(7A) (cf. s 36(4A)). The effect of those subsections is to exclude from the rights which are suspended the right to compensation for the cost of medical treatment payable under s 16. Section 16(1) relevantly provides that "where an employer suffers an injury, Comcare is liable to pay, in respect of the cost of medical treatment obtained in relation to the injury … compensation of such amount as Comcare determines is appropriate to that medical treatment". It follows that the cost of medical treatment that is payable under s 16 (rights in respect of which are saved by s 37(7A)) is "the cost of medical treatment obtained in relation to the injury" (emphasis added). It is not compensation for medical treatment at large or compensation for medical treatment in relation to all injuries. It would be odd indeed if the purpose of s 37(7) were to suspend rights with respect to all injuries and s 37(7A) only preserved the right to compensation for the cost of medical treatment for "the injury". It is far more likely that the purpose of s 37(7) is to suspend rights with respect to the injury (or injuries) which caused the rehabilitation authority to require the employee to undertake the rehabilitation program and s 37(7A) preserves the right to compensation for the cost of medical treatment for that injury or those injuries. 32 On either interpretation the effect of s 37(7) is to deprive the employee of significant statutory rights. The construction urged upon the tribunal by Australia Post and supported in this court by Comcare would have a draconian effect. Senior counsel for Australia Post fairly characterised it as using a sledgehammer to crack a nut. It would extend the reach of the suspension to rights in relation to injuries that have no relationship to the determination giving rise to the suspension including rights that have been recognised by previous decisions of the tribunal or this court. Indeed, both Comcare and Australia Post submitted that the suspension would extend to injuries which may occur in the future. Quite apart from the logical difficulty of suspending a right that has not yet accrued, these consequences tell against the sledgehammer construction. And it makes no sense to read the subsection in this way. As the tribunal said (at [38]), to give s 37(7) this broad reach "is to go beyond the 'mischief' resulting from failure to undertake a particular program". Had that been the Parliament's intention there should be no room for ambiguity; one would expect clear words, without resort to inference. The subsection does not speak of all rights, nor does it speak of rights in respect of all injuries. 33 In Buck v Comcare (1996) 66 FCR 359 ("Buck") Finn J dealt with the equivalent provision in s 57(2) of the Act under which an employee's rights to compensation and to institute or continue proceedings are suspended if he or she refuses or fails, without reasonable excuse, to undergo a medical examination by a legally qualified medical practitioner nominated by the relevant authority. In Buck Comcare argued that the existence of a reasonable excuse was not a matter of objective fact so that its presence or absence was not reviewable but was a matter entirely for Comcare's subjective opinion. His Honour said (at 364): … [Section] 57(2) operates on a significant, albeit statutory, right of an employee in Mrs Buck's position. That right does not fall into the category of "common law" rights which traditionally have been safeguarded from legislative interference etc in the absence of clear and unambiguous statutory language: cf J J Doyle QC, "Common Law Rights and Democratic Rights" in P D Finn (ed), Essays on Law and Government, Vol 1, 158ff. Yet it is a right of sufficient significance to the individual in my view, that, where there may be doubt as to Parliament's intention, the courts should favour an interpretation which safeguards the individual. To confine our interpretative safeguards to the protection of "fundamental common law rights" is to ignore that we live in an age of statutes and that it is statute which, more often than not, provides the rights necessary to secure the basic amenities of life in modern society. 34 While the context in which these remarks were made was a little different, in our opinion they apply with equal force here. 35 Comcare submitted that the broad construction which it urged would provide an incentive to an employee to undertake rehabilitation and, with s 36(4), s 37(7) was the only available sanction to enforce compliance with the rehabilitation requirements. The submission was embraced by Australia Post. Yet the submission presupposes, without demonstrating, that the sanction/incentive offered by the narrower construction preferred by the tribunal is not enough. On the construction adopted by the tribunal a failure without reasonable excuse to undertake a rehabilitation program results in the suspension of the right to weekly payments of compensation for: incapacity for work (s 19); permanent impairment compensation (s 24) no matter how serious (assuming none has yet been paid) or an increase in such compensation; non-economic loss (s 27); and household and attendant care services (s 29), no matter how acute or extensive the need. These are the rights to compensation affected by s 37(7). Like the tribunal, we cannot see why that does not offer the intended sanction or incentive to recalcitrant employees. 36 We would therefore order that the application be dismissed. 37 Ordinarily we would order that Australia Post and Comcare pay Ms Sinnaiah's costs but when Comcare asked to be joined as a party it offered to pay those costs and an order to that effect was made by Buchanan J on 24 July 2013. We will merely note that order. 38 The tribunal made no order for costs. Ms Sinnaiah sought an order in this Court that Australia Post also pay her costs in the proceedings before the tribunal. But no formal application was made for such an order. In the circumstances this Court has no jurisdiction to entertain it. Any application should be made to the tribunal itself. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Cowdroy, Buchanan & Katzmann.

Australian Postal Corporation v Sinnaiah

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