Barbaro, A. v. Leighton Contractors Pty Ltd [1980] FCA 73

Antonio Barbaro v. Leighton Contractors Pty. Limited

F.C. No. 8 of 1979 ° Coram: Smithers, Connor and Franki JJ. Date: 27 May 1980

Smithers, Connor and Frankia ) and i(c). Proof of Geath. total incapacity or partial incapacity as the case may be, 1s a condition of an

award based orn the particular event relied on. The structure of

"1 (>) \nere total or partial incapacity for work results from the injury, a weekly payment during the incanacity not exceeding fifty per cent of his

montns, if he "has been so long employed, put if nes then for

in the employment of the same employer, such weekly payment not to exceed one

to the basis upon which the award rested measurement of the weekly payments payable. was not affected materially save by the enactmenu of

substance, an award based on total and vartial incapacity and

as subject to avolaance on proof of the circumstance that tae

of the workman, an award shall persist so long es ther

ancapacity, be it total or partial,until sct aside but thas should not

be seen to zmply that an award based cn tctal incapacity 18s inherently an award based on total and supervening partial incapacity. Thisrcre analytical view appears to me to reflect the policy of the legislation in combination with convenience logic and gustice. It analyses the liability as arising under { either pare+4 (b) or Para. 1 (c) and places on those seeking

relief from liability under one or other the onus of | proving a change of circumstances relevant to the pertacular

grounds of liability established by voluntary payments or

awarded under Pcre. 1(b) orl(c),as the case nay be. Once

there 1s a finding that the appellant has ceased to be totally incapacitated for work liability under para. "(b) of the rst Schedule as activated by s.7 o2 the Ordinance hss ceased. IF tnal

is the only finding,it may be a question whether 1t operates

in respect of the earlier total incapacity Dy way of subtraction,

so to speak, so that some degree of incapacity either vhysicel

or economic remains. And, if economic incapacity remains, hoy

much remains? It appears to me that the better view is 'hat

once the critical factor of total incapacity for work has heen

removed the respondent has destreyed tke basis of the tiability established by an award under para.1(b) of the Schedule orthe Jiabiliy

which he had admitted by making rayrents av th? rete for total

incapacity and there 1s no ground for casting on the respondent any further burden, by saying ta the resvondent - - "Well you have

discharged total liability but you are Liable for partisl

incapacity for work cr establish tne amourc payatlo pursuant to

In my opinion the true view is tiat 1n a situarzon such as existed in thts case the eppellant was at the outset of the proceedings in as strong a position as though there were an existing award in his favour imposing liability uvon the respondent on the basis of total incapacity. If there had been an award it would have been based on an establisned

incapacity for work, constituted in the words of Lord

Loreburn in Rall v. William Hunt & Sons Limiled /19127 a,c. 496 by "a physical defect in the appellant waich made his labour unsaleable 1n any merket reaseonedly accessible to him". It 1s this basis of liability which would lterminate if tr. respondent established the change of circumstances cn which he relies. When that occurrs, there 1s ro basis ot liability

theory that 1t had been wrapped up in the concept of total auncapacity and was revealed by way of subtraction from thet

concept. In the case menvtioned,Lord Loreburn said at p,. 500

" ... there is partial sncapacaty for work when such a defect /i.e. a physical defect in

a man' makes his labour saleable for less than 1t would otherwise fetch."

It 1s a condition of entatlenent to an award,in 1espect of partial incapacity, that there be proof that as a conseguence

of physical incapacity the workman's labour 1s saleable for

to a specified degree. It :s logical that the burcen ci proving this, when there is no antecedent finding of vartial incapacity under the Ordinance, should be on the sppellant. In a case in

there may still be evidence of residual prysical incepacity

which has made the appellant's labour saleable for less than

1t would otherwise fetch. B3uv that would merely mean that there was evidence avallable to the workman on the 2z3sue with respect to which the lezal onus of proof 25 on him. And even in such a case,tne degree of unsaleability would be peculiariy within the knowledge of the appellant. For the purpose of making en award on the basis of partial incapacity, 2n eccordance 71th 3.7 of the Ordinance and para.1l(c) of the First Schedule,ihe extent o7 the

established to irplemert the provisions of fara.1(c).

In @ case in which liability is ostablished for peynont

of @ weekly sum at a rate establighed by a werkman on the Lasis of partial incapacity, 1t may be Lhal at a later date the employer may desire to seek reducticn or cessation of those weekly sums. In such a case the onus of proof vould be upon the employer. This 1s because an employer challenging an award based on total incapacity or on partial incapacity must prcve the relevant change of circumstances on which he relies. Where

the award under challenge was based on total incapacity, the relevant change of circumstance is cessation of total

Where the awarc under challenge was based on partiaL

incapacity and reduction of payments is sovent, the relevant

chnge of circumstances weuid be reduchicn an the d2ainmuiticn

of earning capacity suffered by the workman. In this exercise

the employer is at the disedvantage that the reievant facts may ve exclusively zim the knowledge of the workman. However, there 18

a difference pvetween the situation of an employer when he faces

an original claim based on partial incapacity and that when he subsequently challenges an award based on pertsal incapacity.

Tn the former,nothing has been established in relation ta the workman's partial incapacity. In the latter, the employer

has at least an established position to work from, In any

event it 1s inevatabie that an employer challeng:ng en award

it would seem tnat arising ouc of the rrovisions of the Ordinance the concepl of total incapacily for work differs in nature from thet of compensibdle partial

sneapacity for work. The cause oF action in respect of

total liabilaty depends upon s.7 of the Crdinance and pare. 1(b) of the First Schedule, that 1n respect of partial iuncapucity devends on s.7 and pare '(c) of the Pirst Schedule. The decision cf Katto, Taylor and Owen JJ. in Phillips v.

The Commonwealth (1954) 1°70 C.L.R. 247 appcars to ne ro be

directly in point. %n that case an employee received payments of compensation under pare. 1(b) of the Farst

Schedule ot the Commonwealth Emoloyees Compensation Act

1940-1956 (Cth) upon the basis of her total incapacity

for work because of an employment anzgury. Later the Commissioner for Employces! Compensation determined that payments should end because she was ro longer totally incapacitated, Upon appeal to the County Court she contended that she was still totally incapacitated, alternetively, partially incapacitated and thus entitled to ccempensation under

appellant submitted that on the evidence before him the delegate should have found that as from 16th November 1961 she was totally incapacitated for work, but his Honeur Judge Durn held that botn on tno2 finding in a certificate of a medical board given pursuent to s.19 of the fcr ard on the evidence beToré nim it was clear that the appellant was not totally incapacitated for work. 'The appellant als; argued that she was partially incapaciteted for work, but the Judge held that on the material before him he was unable to find that the appellant was not capable of carning, in some suitable employment or business, a weekly amount not less chan her pay at the date of tne ingury as since varied. He went on to say 'It wes urged on

behalf of the appellant that the onus of proof as to the amount vhe appellant 1s capaole of earning in some suitable employment or business 1s con the respondent. In ny opinion, that 18 not correct.

Court of Queensland that the burden of proof of past and present carning capacity rests on the claimant for compensation (Adams v. Scott (2)), = think as a matver of principle

"in the present case what had been initielly established was that the appellant was totally incapacitated as, indeed, was the basis of her original claim for compensation, and :msediately before the final determination of the delegate she held, in effect, an award establishing her entitlement to compensation 1n accordance with par.1(b) of the First Schedule to the act. Thac award however, could survive only so long as she remained totally incapacitated. Apparently the delegate of the Commissioner was satisfied that she did not so remain after i6th November 1961 and upon the rehearing of the appeal to the County Court 1% was found as a fact that she was not totally incapacitated after that date. This finding ns not challenged in this Court and indeed it could not be challenged, for it was founded upon e certificate of a medical board which s.19(4) makes conclusive evider.ce of the matters certified. Accordingly, 1t 1s clear that the appticant has no further right to compensation under par.1(b). But at 1s contended on her behalf that in order to secure the dismissal of her appeal to the County Court it was incwibent upon the Commonwealth not only to establish treat fact, but also thet after the date in question she was not partially incepacitated or, alternatively, that seny remaining residual incapacity did not diminish ker earning capacity. That 1s to say, that 1% was the appellant's contention that tne cnus lay upon the Commonwealth or proving facts snowing, not cnly an absence of liability on its part under par.i(b) of the First Schedule, but also an absence of liability under par.i(c). There is, we think, sone conrusion in this contention, it may be that the issues before the County Court were not vrecisely defined but that the appeal had dual aspects 1s beyond question. In the first place, there arose for determination the question whether the liability of the Commonwealth to pay compensation to the eppeliant as a totally incapacitated employee should be brought to an end. Upon this issue the onus rested fairly upon the Commonwealth but, as already appears, 1t was dis- charged and the finding of the County Court carnot be challenged. Then arose the gqustion whether comp- - ensation should be awarded to the appellant as « person partially incapacitated and with a dimanished earning capacity. This, in effect, constituted the basis of a new claim not previously pronounced upon before its rejection by the Commissioner. On this issue tne onus was, we think, clearly upon the apnellant,. Accordingly, ve do not think that the learned County Court Judge made any error of law upon this point."

It was argued by ilr. Costigan that this decision should be seen as nothirg more than an application of what yas Gecided by the majority of the members of the High

Court in J. & H, Timbers Pty. Ltd. v. Nelson (197'-72)126

C.L.R. 625, namely that in the case of a workman seeking an

initial award the onus is on the claimant to prove "not only angury and incapacity for work but, where that incapacity is less than total, financial loss", per Menzies J. at 637. Mr.

appellant was really seeking an initial award. He said,

as I understood, that the proceeding ain which the appeliant lost the award in her favour, because it was shown that she was no longer totally incapacitated, was, or at least should be considered, quite separate frem the proceecang 1n whick she

sought an award on the basis of nartzral incapacity for work. & E

He contended that this followed from the form of the proceedings and from tne fact thet the Commissioner under the Commonwealth Employees! Compensation Act was entitled not only to make determinations 2D initio, Dut was eniitled himself to vary cr termunate any payment cr compensation, It was argued that the Commissioner was the employer and to equate his position to tnat of the respondent in this case would be to say, but wrongly, that the respondent had the right to vary or terminate payments of compensation as did the Commissioner. It was also argued that the situation an the case before this

Court was similar to that dealt witn in Comnonweeltn of

Australia v. Muratore (supra) at n.98 rather then that

I am unable to accept the first contention, It appears to me that because the procedure was by way of

rehearing (see Phillips' Case (supra) at p.349) the situation

on the appeal to the County Court was precisely that obtaining in this case. At the outset of the proceedings the appellant was able to rely on the previous award having been made on

the basis of total incapacity. It was held tnat the onus was

on the Commonwealth to disvlace that award. This was

accomplished Ey evidence in the appeal. Tre fact that it was IP

accomplished easily by vroduction of the certificate 15 not to

the point. When that had been accomplished tne evpellant, as in this case, sought an award based cn partial incapacity and was required to prove the elements necessary to support such an award. Tnis she failed to do. It was in the sare proceeding, namely the appcal, that all these issues were dealt with. It was that one proceeding which was said by the Court to have a dual aspect. The claim by the appellant in tnis case, in the proceedings brought by him, had similarly a cual aspect. In its first aspect the award equivalent arising from

para, 12 of the First Schedule was :n issue. As from 20 May 1977 that ecuivalent ought not to have survived if the finding

had been made that total incapacity for work had then ceased,

In 1ts second asvect the anpeliant's claim for an éeward on the basis of partial incapacity for work vas in

issue. On that the appeliant carried the onus of proot,

benefit of the equivalent of an award on the basis of

partial incapacity for work, It was held that the Common- wealth's challenge to that award was on the ground of charged circumstances and that the Commonwealth carried the onus of proving a dimirution of incapacity. =n the case under appeal before this Court there 1s no challenge to any award already made

in respect of partial incapacity. ln Muravore's Case the

previous finding of partial aincapecity for work was regarded as critical, It was poznted out that the aporeacn cf the

majority of tne Court in Thompson v. Araustrong and Royse

Pty. Ltd. (1950) 81 C.L.R. 585 docs no: support the

submission that despite the reasonirg in Phillips's Case the

onus always 1ligs on the employee to prove cconomic loss, even if he has in his favour a finding of partial incapacity for work. See per vacobs J. at p.100. Whale deciding in

Muratcre's Case that the onus wus upon the Commom-ealth to

prove diminution of the worker's incapacity fcr work, in th

relevant sense, his Honour said at p.109 "The position 1s quite different if there has been no previous finding of partial incapacity with a consevuent assessment of the compensation

payable," it 1s establisned that in such a case the employ

ra) bears the onus of proving the partial incapacity for work and

the degree of his loss of ability to earn. J.& H. Timbers

andivisibility of the concept of vartial incapacity for work

in relation to 1%ts physical and economic aspects. As

"An employee who has been found to be partially incapacitated for work has his incapacity measured by the extent that the amount per week that he is able to earn in some suritable employment or business is less than his average weekly earnings before his angury (see s.46(2) of the 1977 Act). His partial incapacity for work 1s only relevant in so far as such a measurement can be made, that 1s to say, in so far as it produces incapacity to earn the wages which he was previously able to earn. Therefore the Commonwealth, when it alleges that the employee 1s physically able to earn, in some suitable employment or business, a weekly amount which 1s not less than his weekly pay at the date of injury is alleging nothing relevantiy different from an allegation that he has no physical incapacity for work producing an incapacity to earn those wages. The position would be no different 1f it were alleged that has degree of incapacity for work had diminished so that his compensation should be reduced. In both srtuations the Commonwealth is, orywould be, alleging that the circumstances of tne employee had changed; and the onus lies upon the party alleging the change of circumstances to prove it." (page 180)

at p.621 1n Thompsons Case (supra) apnear to me to anticipate

what was said above by the learned Justice.In the critical phrase "incapacitated for work" the economic aspect 1s wraeuved up in the words "for work". Thus in the words of Fullagar J. "Aman is,totally incapacitated for work when he is by recson of his ingury,vhysically unable to work" p.613. Kitto d.

said at 2.621: "Thus compensation is awarded, not for loss of wages,nor for impairment of physical condition per se,but for the economic aspect of that impairment, namely a lost or

separate Judgment stated the effect of Phillivs' Case in words

which appear to summarise the matter with compelling clarity.

the onus was on the Commonwealth to show that total

In the result I find that between 17 March 1977 and 20 May 1977 the appellant,despite physical injuries supervening upen those he suffered in September 1975, was able to earn a substantial income in some employment or bdusincss and was not then totally incapacitated within the meaning of para. 1(b) of the First Schedule to the Workmen's Compensation Ordznance 1951 of the Australian Capital Territory. Accordingly, the appellant at ali times carried the onus of proving partial incapacity for work within the meaning of para.1(c) of the First Schedule of the Act. I am satisfied that the findsng of the learned Magistrate that he was not satisfied that the appellant suffered any economic loss by reason of such injuries during the period referred to was one open to the

Megistrate on the evidence and shculd not be disturbed,

It was pointed out that the Magistrate said that but for certain aspects of the evidence he would have thought it proper to adjourn the matter to afford to the appellant an opportunity to call further evidence :f he so desired. But in this case there was no reason to think that the appellant had not fully presented his case so far as he desired te de so. The appellant was under the impression that he carried the onus on the issues both of total, as well as partial, ncapacity and in both the physical and economic aspects thereof. As was pointed out by the learned Magistrate ,the case had not really beer fought on partial incapacity. It is not to be thought that the course adepted by the appellant was not advisedly taken. He was not without advice. Reference to the course of proceedings befare the learned Magistrate indicates that the appellant hed every opsertunity Lo supply any omissions 1% or tender any additions to the evidence

he had submitted in the course of four separate hearing occasions

between 18 October i977 and 22 November 1977. After the case was closed it was statec on benalf of the appellant that 1% was not desired to call any other evidence. in those circumstarces the question of whether the Magistrate of hi2s own motion should suggest '

an adgcurnment for the purpose of giving the appellant an opportunity to call further evidence to support what was really an alternative case of partial incapacity was a metter purely in

the discretion of the Magistrate. Indeed, I do not consider that

the Magistrate would nave been at fault had he not considered

2 t a . However, h r S red it and havi the matter at all However, having considered it and having

exercised his discretion for the reasons stated by him I see no reason why his decision should be treated as unsound. The Magistrate stated that he exercised his discreticn :n the way that

",.. having regard to the unsatisfactory evidence and to the unsatisfactory exvlanation for these larce sums

by accident arising out of and in the course of his employment as a workman employed by the said respondent, such weekly payment to commence as from

the day of ,» and to continue during the total or partial incapacity of the said A.B. for work, or until the same shall be

ended, diminished, increased, or redeemed in accordance with the provisions of the above-mentioned Ordinance." In Higgins v. Poulson [1912] 2 K.B. 292 the Court of Appeal held that an identical form in the English Workers Compensation Act 1906 was intra vires and entirely consistent with the policy of

the Act and that the arbitrator ought to make his award in

it will thus be seen that the employer is not at the mercy of the workman because he can require a medical examination and suspend the payments if the worker refuses to be examined. After he has had the worker medically cxamined the employer can apply to vary or end the weekly payments. Neither is the . workman bound to continue receiving payments which have for one reason or another become inadequate. He can apply for an increase. The scheme of the Ordinance thus enables the weekly payments to be brought into line with changed circumstances by the process of agreement or arbitration. I think 1t is clear that, apart from a workman's refusal of a medical examination, the scheme

does not permit of unilateral cessation of weekly payments by

the employer - cf. Ocean Coal Company Limited v. Davies [1927]

A.C. 271 per Lord Atkinson at p.284 and Thiess Bros. Pty. Ltd. v.

So much for the general scheme of the Ordinance. In this case two related questions arise as to whether the payments made to the worker were payable under the Ordinance and if so whether the expression in paragraph 12 of the First Schedule "A weekly payment ... payable under this Ordinance" includes a pavment under an unrecorded agreement.

An emplover might for compassionate reasons make ex gratia payments to a worker which would not be regarded under paragraph 12 of the First Schedule as "payable under this Ordinance". In the present case, however, there was a dramatic accident at work and the workman was taken immediately from his place of work to the hospital on the employer's directions. Thereafter the employer made weekly payments for a period of eighteen months at the rate appropriate for total incapacity.

I think the inference is irresistible that these payments were

in respect of the respondent's liability to the workman under

Plainly enough the expression "A weekly payment ... payable under this Ordinance"',as it appears in paragraph 12, includes a payment pursuant to an award or under a recorded ' agreement. It frequently happens, however, that weekly payments are made pursuant to an unrecorded agreement written or oral. After injury by accident the workman makes a claim and the employer accepts liability by making weekly payments of the amount prescribed in the Ordinance. If nothing more appears this amounts to an agreement that there was an injury by accident giving rise to incapacity and an agreement to make weekly payments for the time being. It seems to me that as a matter of principle such payments are weekly payments payable under the Ordinance within paragraph 12 because the employer, in making such payments, 1s discharging his liability under the Ordinance. As

Lord Shaw of Dunfermline said in Ocean Coal Company Limited v.

"... it is not the award which creates the liability; an award is merely part of the machinery for determining its amount and for having it enforced. But the liability 1s tmposed by the statute itself ...".

authority. In Pudney v. William France, Fenwick and Company

Limzted [1925} 1 K.B. 346 the Court of Appeal considered s.14 of the English Workmen's Compensation Act, 1923 which provided: - "An employer shall not be entitled otherwise than in pursuance of an agreement or arbitration to end or diminish a weekly payment under the principal Act ..." except in certain cases. I do not think the difference in wording between this provision and paragraph 12 of the Ordinance is material to the question

whether or not a weekly payment under an unrecorded agreement

1s included. The Court of Appeal held that the "weekly payments" referred to in the section were not confined to weekly payments assessed under an award or recorded agreement, but included weekly payments made voluntarily or under an unrecorded agreement see per Pollock M.R. at p.350; per Warrington L.J. at pp.354, ° 356; per Scrutton L.J. at pp.359-360. Because of the particular issue which arose in that case it was in the workman's interests to argue that weekly payments did not include voluntary payments; but the argument was rejected.

In Ocean Coal Company Limited v. Davies [1927] A.C. 271 the House of Lords was also considering s.14 of the 1923 Act. The employer by an oral agreement admitted liability and paid the worker full compensation for over a year. The amount was then reduced by agreement and about a year later the employer stopped the weekly payment and served on the respondent a request for arbitration. The case concerned another point but it is of interest to note that Pudney's Case supra was not referred to either in the arguments or the speeches; and it was accepted on all sides that s.l4 applied to voluntary weekly payments. Viscount Dunedin at p.278 said:-

until it is ended in any one of five ways ..." (atalics supplied).

"I think it is clear that the object of this provision was to deprive the employer of the power or right to which he was theretofore entitled, arbitrarily, at his own will and pleasure, to end or diminish the weekly payment". \

It must be borne in mind that Lord Atkinson made these observations in a case where the only weekly payments under

consideration were payments made under an oral agreement.

A.C. 297 the Nouse of Lords considered s.12 of the English Workmen's Compensation Act 1925. By the time of this case a new Act had been introduced and s.14 of the 1923 Act had in effect become s.12 of the 1925 Act. The employer had unilaterally stopped making weekly payments which it was not making under an award or a recorded agreement. The House of Lords upheld the right of the workman to obtain an interim award pending the arbitration and held further that the arbitrator was not entitled to authorise the employers to pay the compensation into Court as it should be paid to the workman. Lord Buckmaster at pp.302, 303 said:-

"The justification for the award is sought under the terms of s. 12 of the Workmen's Compensation Act, 1925, which is in the following terms:-

'Limitation of power of employer to end or diminish weekly payments. ~ An employer shall not be entitled otherwise than in pursuance of an agreement or arbitration to end or diminish a weekly payment except in the following cases' (which are then specified under three sub-heads).

1 do not entertain much doubt as to the meaning of s, 12. Its purpose is, to my mind, plain.

It 1s to secure that if weekly payments are, in fact, being made to a workman, they shall not

be ended apart from agreement or arbitration except in the cases that are specified. None of the occurrences mentioned in the three sub-heads is alleged in the present case, and it therefore follows that the obligation imposed by the first words of the section still remains. ...

No award has been made, and pending the making of the award, or an agreement, the employer is not at liberty to suspend the weekly payments."

"In my opinion the object of the Act was, to secure payment to the workman while matters were unsettled, and this 1s not accomplished by payment into Court."

was only because of the scheme of the Act, including the appellate provisions, and the course of the particular litigation that the Court held in Phillips' Case that the application for

an award for partial incapacity was in effect a fresh application for an award of compensation and that consequently the onus of . proving it lay upon the employee.

For these reasons I am of opinion that in an employer's application to review weekly payments the employer has the onus either of showing that the weekly payments should be ended or of putting the arbitrator in a position to determine by what

The Learned Arbitrator Did Not Deal Fully With The Question Of

The learned arbitrator, in a passage I have quoted above, said that for practical purposes the issue before him was whether the workman had "any and if so what incapacity for work since March of 1977''. He did not, however, go beyond holding that the workman had not persuaded him that he was totally incapacitated. Prima facie the workman had some incapacity for work because he was a builder's Labourer who had a partial physical incapacity. The learned arbitrator did not find that the worker had no economic incapacity. He contemplated that further evidence might nave quantified a partial economic incapacity or might even have established a total economic

incapacity. The scheme of the legislation is that in general an

agreement has the same effect as an award - see Birch v. Pease

and Partners Limited [1941] 1 K.B. 615. The authorities, which

I have cited above, show that, in an application to review, weekly payments which have been agreed are treated as being on

all fours with weekly payments under an award. Ilad the payments

in this case been the subject of an award, that award would have

provided that they "continue during the total or partial incapacity of the [workman] for work, or until the same shall be ended, diminished, increased or redeemed in accordance with the ... Ordinance" - sec Form 17 supra. When either an employer ora . workman applies for a review of weekly payments, the application opens up the whole question of the workman's state of health and

his capacity or incapacity to earn - see Bagley v. Furness and etc.

(1914) 7 B.W.C.C. 560 per Cozens-Hardy M.R. at p.564, per Swinfen- Tady L.J. at pp.564-565. In the present case the learned arbitrator ended the payments without considering the matter of partial incapacity. In my view he should either have considered the matter on the evidence before him or, if he took the view that further evidence was necessary, he should have so advised the parties. He should not, in my view, have made an award for the employer unless he found that the workman had totally recovered

his earning capacity; and, as I understand the learned arbitrator's reasons, he made no such finding. 1 think, with respect, that the observation of the Master of the Rolls in

Cory Bros. and Co. Lid. v. dughes [1911] 2 K.B. 738 at p.743

(which was specifically approved by the High Court in Muratore's

Case) is in point, namely that "the burden 1s on the employers Pp ? y ploy

to satisfy the Court that the man at this moment is not under any incapacity by reason of the accident which admittedly befell ham". For these reasons I am of the view that the learned arbitrator did not properly or fully consider the question of the workman's capacity for work. New Trial The appeal from the learned arbitrator was heard in

the Supreme Court of the Australian Capital Territory by Blackburn

fact that an employer commences to make payments to a workman, when he is not under an obligation to do so by reason of an award or agreement under the Ordinance, creates a legal obligation on the part of the employer to continue those payments until he is relieved of that obligation by an award under the Ordinance or by some other provision of the Ordinance."

Because His Honour took this view he considered that the workman

had the onus of proof on all issues before the learned arbitrator.

For the reasons I have given I think there was an agreement to

pay compensation,albeit that it was not registered under the

Ordinance, and also that the employer had the onus of proof, as

described it. It follows that I consider that His Honour error in holding otherwise. For these reasons I would the appeal. The question then arises as to whether the

should be sent back to the learned arbitrator or whether

the employer, if so advised, should he left to make an application

to end or diminish the weckly payments. In the latter case the

worker would arguably remain entitled to weekly payments from

March 1977 until such time as they were ended or diminished by

any application which the employer chose to make, a period

already longer than three years. When the matter of the worker's

incapacity has been fully investigated it may emerge that his

capacity for work during this substantial period has been such

that it would be unjust for the emplover to be liable to pay him

as fer total incapacity. It might be said that the employer

has brought such a result on himself by unilaterally ending the

weekly payments. On the other hand a substantial amount of the

three year period has been occupied by the appeal to the Supreme '

Court of the Australian Capital Territory and by this appeal.

Had Blackburn C.J. taken another view, it would not

have been open to His Honour to remit the matter to the learned

arbitrator - see s.26(2) of the Workmen's Compensation Ordinance 1951 as amended and ss.208(1) (hj), 215, 218 and 219F of the Court of Petty Sessions Ordinance 1930 as amended.

Section 28(1)(c) of the Federal Court of Australia Act gives this Court power to remit a proceeding to the Court from - which the appeal was brought for further hearing and determination, subject to such directions as the Court thinks fit. I do not think it would be satisfactory to renit the matter for further hearing and determination to the Supreme Court of the Australian Capital Territory. It is not a trial court for such matters and has no power to remit to the learned arbitrator. This provision gives no power to this Court to remit direct to the learned arbitrator. Such a power might be spelt out of s.28(1)(b) which enables this Court on appeal to make such order, as, in all the circumstances, it thinks fit; but quaere whether paragraph (b) should be read down in the light of paragraph (c). I do not find it necessary to decide this matter because of the presence of paragraph (f) which provides that this Court, in the exercise of its appellate jurisdiction, may "grant a new trial in any case in which there has been a trial, either with or without a jury, on any ground upon which it 1s appropriate to grant a new trial", I do not think that any narrow view should be taken of this provision by reading into it a proviso that the power exists only when the intermediate appeal court could also order a new trial by the trial court, which in the Australian Capital Territory is the Court of Petty Sessions, Canberra.

I turn, therefore, to consider whether this is an appropriate matter in which to grant a new trial. For the reasons I have given I consider that the learned arbitrator

misdirected himself on the onus of proof and failed to consider

properly or fully the question of the workman's incapacity.

Section 27 of the Federal Court of Australia Act 1976 provides that in an appeal the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact.

I have reread the whole of the cvidence which was given before the learned arbitrator. I have endeavoured to make full allowance for the fact that I have not had the advantage of seeing or hearing the workman and that he did not impress the learned arbitrator at all favourably. Even so 1 am unable to say whether or not the learned arbitrator would have come to the same conclusions if he had not misdirected himself as to the onus of proof and if he had fully considered the question of incapacity. For myself I would not have been satisfied that the employer had shown, on the balance of probabilities, that there was work available in Canberra at the time of the hearing for an 11literate builder's labourer, who spoke very little English, who had no other skill, who had a back and neck injury for each of which he was wearing a brace and who was also a potential candidate for spinal surgery. Moreover there were some unsatisfactory aspects about the evidence concerning the source of the payments which the worker had received; and [ think there is a real question as to the extent to which it was possible to make a rational inference from such evidence that the workman had any capacity to earn. I note also that the learned arbitrator discouraged the workman's solicitor from investigating these matters fully - sce Appeal Book pp.&9-90 (original transcript pp.86-87} and Appeal Book pp.105-108 (original transcript pp.102-105). ,

I must also bear in mind that the learned arbitrator

suggested that further evidence might be desirable. [If that be

so, then, in deciding matters under beneficial legislation

which enjoins the Court to act "according to the substantial merits of the case" (paragraph GA(c) of the Fourth Schedule),

I think the parties should have been given the opportunity to

get such evidence. All these considerations lead me to the . conclusion that justice will be served best by an order for a

new trial in which the matter will be settled by the Court of Petty Sessions by arbitration. It Follows from what I have

said that I consider that when the matter comes on anew it should be treated as an application by the employer under paragraph 12 of the First Schedule of the Workers Compensation Ordinance to end or vary weekly payments, 1n which the onus is on the employer to prove changed circumstances. It 1s impossihie to indicate in advance how such an onus will be discharged in any given case,

In some cases if the employer by medical or other evidence can show that a workman has a partial physical capacity for work there might be an evidentiary onus on the workman to lead evidence of his inability to obtain work, particularly 1f his inability

is based on facts which are peculiarly within his knowledge.

Tor the foregoing reasons I would uphold the appeal, set aside the judgment below and the award of the learned arbitrator and order a new trial in the Court of Petty Sessions at Canberra in accordance with s.24 and the Fourth Schedule of the Workers Compensation Ordinance 1951. I would order the employer to pay the workman's costs of the hearing before the learned arbitrator, of the appeal to the Australian Capital

AUSTRALIAN CAPITAL TERRITORY F.C. No.8 of 1979. DISTRICT REGISTRY

On 22 September 1975 the appellant, whilst working for the respondent, was injured when he slipped and fell into a trench. Thereafter compensation was paid by the respondent to the appellant at the rate appropriate for total incapacity until a date in March 1977 when the respondent unilaterally terminated the payments. On 20 May 1977 the appellant applied for arbitration under the provisions of the Workmen's Compensation Ordinance 1951 of the Australian Capital Territory ("the Ordinance") for the determination of the following questions:

Applicant is a workman to whom the abovementioned Ordinance

(b) As to the liability of the said Respondent to pay weekly compensation under the

(c) As to the liabililty of the said Respondent to pay medical, hospital expenses incurred by the Applicant since the 22nd day of September, 1975.

(da) As to the liability of the said Respondent to pay arrears of weekly payments to the Applicant."

"S. Particulars of incapacity for work, whether total or partial and estimated duration of incapacity - total and permanent."

The learned magistrate who heard the application made an

"T am satisfied on the evidence that the applicant suffered an injury to his back at work on 22 September 1975 and that between March of 1977 and the date on which the - or put more precisely that between the date on which compensation ceased and now the applicant has had, in the physical sense, a partial incapacity for work. I am not persuaded on the evidence that he is totally incapacitated for work, let alone totally and permanently incapacitated for work."

"So that the applicant has to persuade me, on the balance of probabilities, that he is unable to earn his pre-injury earnings. In order to succeed in a claim before me that applicant has to show that he is not able to earn the equivalent of his pre-injury earnings allowing for changes that may have occurred since the date of the injury and what people, in the category that he was, were earning."

He then pointed out that the case was not conducted on the basis of partial incapacity but rather on the basis of total

"But here having regard to the unsatisfactory evidence and to the unsatisfactory explanation for these large sums of money that the applicant has undoubtedly received I am not persuaded, on the balance of probabilities, that the applicant has, as a consequence of this accident, in fact an incapacity to earn money. I am not satisfied that he has suffered economic loss as a consequence of the injury in the period that is relevant for my present decision."

Ordinance 1972 the appellant appealed from this arbitration to the Supreme Court of the Australian Capital Territory and that Court dismissed the appeal and confirmed the award. This appeal is by the appellant from the judgment of the Supreme Court.

"Tf personal injury by accident arising out of or in the course of his employment by his employer is caused to a workman, his employer shall, subject to this Ordinance, be liable to pay compensation in accordance with the First Schedule to this Ordinance."

Paragraphs l(b) and l(c) of the First Schedule, together with the provisions of s.12A of the Ordinance, provide the formula for calculating the payments to which a workman is entitled in respect of total incapacity and partial incapacity for work respectively. Section 12A of the Ordinance provides for the adjustment of certain figures in accordance with a specified

Index number. Paragraph 12 of the First Schedule provides:

"A weekly payment (...) payable under this Ordinance may be varied or ended by agreement or by arbitration under this Ordinance."

The learned magistrate held that he was not satisfied that the appellant was totally incapacitated for work and the

"The medical evidence showed and in my opinion the preponderance of evidence was, that the appellant waS, as a result of the injury, incapacitated for heavy labouring work, and that he was thereafter capable of other work not being heavy labouring work."

Both the magistrate and the learned trial judge were

satisfied that it had not been shown that the appellant was

that the appellant was totally incapacitated for work by the

the first schedule which deals with partial incapacity provides:

(i) of the amount (if any) by which the weekly amount that he is

less than his weekly pay at the date of the injury, or of the amount of Fifty-seven dollars, whichever is the less; or

(ii) of the amount (if any) by which the weekly amount that he is

less than the weekly amount that would have been payable to him under sub-paragraph (b) of

injured workman is entitled where he is partially incapacitated

for work by injury depends upon ascertaining the amount he "is

The principal argument advanced for the appellant before us was that the onus of establishing the amount the appellant was able to earn in some suitable employment or business did not fall upon the employee as had been found by the magistrate. The

"In my opinion this case is one in which the appellant, as applicant in the proceedings below, failed to persuade the learned magistrate that he was totally incapacitated, and also failed to provide the learned magistrate with evidence that the amount that he was earning, or was able to earn in some suitable employment or business, after the injury, was less than his weekly pay at the date of the injury, or that that amount was less than the weekly amount that would have been payable to him if he had been totally incapacitated, or evidence from which the learned magistrate could made a decision on these matters.

I would therefore uphold the decision of the learned magistrate. But counsel for the appellant

submitted that it was open to me to make other orders."

Before dealing with this argument in detail it is relevant to point to the findings of the magistrate that the applicant was shown to be a person who would tell lies in order to achieve his own ends, and that he had received substantial sums of money and that the account of the circumstances in which these monies were received, in so far as they had been disclosed

in the evidence, was not convincing. The magistrate then said:

-7- "IT am not satisfied that he has suffered economic loss as a consequence of the injury in the period that is relevant for my present decision."

On the question of onus the respondent argued that the words "payable under this Ordinance" in paragraph 12 of the First Schedule were only applicable where weekly payments were made pursuant either to an arbitration in accordance with the provisions of the Fourth Schedule or to an agreement which had been registered pursuant to paragraph 9 of the Fourth Schedule. Paragraph 12 of the First Schedule does not refer to the variation of a weekly payment payable as a result of agreement or arbitration under this Ordinance but only to a weekly payment payable under this Ordinance. It then says that such a weekly payment may be varied or ended by agreement or by arbitration under this Ordinance. The word "agreement" is not defined in the Ordinance or in the Workmen's Compensation Rules and it is

used in a number of places both in the Ordinance and in the

I can see no reason why the agreement cannot be an oral agreement. Certainly one might expect an oral agreement ultimately to be recorded in a memorandum which was registered as provided in paragraph 9 of the Fourth Schedule. The evidence was entirely silent about the way in which payments had been made and accepted in respect of the period from 27 September 1975 to March 1977 and, in particular, there was no evidence of any letters

accompanying the payments or of any documentation with respect to

• 8 - the payments. It was said in the application for arbitration by the appellant that "the respondent admitted liability and made compensation payments for some time thereafter." It seems that no answer was filed by the respondent but when the matter was first before the magistrate counsel for the respondent indicated that he was not taking any technical defences and said "I would expect that the appellant would be able to prove that he has received payments. So there is no point taken." The only possible inference is that the respondent regularly paid compensation based on total incapacity for work from the date of the accident for a period of about 18 months. In my opinion these payments were not suggested to be by way of gift or for any other purpose than to satisfy a liability under s.7(1) of the Ordinance and must be regarded as payments "payable under this Ordinance" within the meaning of par.12 of the First Schedule. This view is compatible with that expressed by che majority of the Full Court of this Court when it was considering a section of

the Workmen's Compensation Ordinance (N.T.) in The Western

Australian Coastal Shipping Commission v. Wallner (1979) 26

In Phillips v. The Commonwealth of Australia (1964) 110

C.L.R. 347 Kitto, Taylor and Owen JJ, in a joint judgment, were

considering the position under the Commonwealth Employees

Compensation Act 1930. In that case it appears that

determinations had been made that Miss Phillips was entitled to

payments for total incapacity and at a later date a further

determination was made by a delegate that she was able to earn an amount which was not less than her pay at the date of the injury as since varied. From that determination she appeaJed to the County Court where the appeal was dismissed and she then appealed further to the High Court which also dismissed her appeal. As appears from the joint judgment at p.351 it was found as a fact in the County Court that she was no longer totally incapacitated

"This finding is not challenged in this Court and indeed it could not be challenged, for it was founded

upon a certificate of a medical board which s.19(4) makes conclusive evidence of the matters certified. Accordingly, it is clear that the applicant has no further right to compensation under par.1(b)."

Paragraph 1({b) provided the measure of compensation in the case of total incapacity and par.({c) the measure in relation to partial incapacity. The Court held that although the onus lay upon the Commonwealth to establish that it no longer had liability to pay compensation to Miss Phillips as a totally incapacitated person since that onus had already been discharged by the finding of the County Court which cannot be challenged, the question whether compensation should be awarded to Miss Phillips as a person partially incapacitated and with a diminished earning capacity then arose. The Court said that

this, in effect, constituted the basis of a new claim not

• 10 - previously pronounced upon before its rejection by the

Commissioner and on this issue the onus was on Miss Phillips.

Senior counsel for the appellant before us sought to distinguish the lastmentioned case upon the basis that any issue in relation to total incapacity was determined conclusively by the certificate of the medical board whereas in the case before us there was nothing corresponding to that certificate and on the contrary par.12 of Schedule 1 of the Ordinance required an agreement or arbitration before a weekly payment under the Ordinance could be varied or ended. In my opinion this argument should be rejected because I consider that there was adequate proof that at the relevant date the appellant was no longer

A.L.R. 176 the High Court considered a somewhat similair question. The main judgment was delivered by Jacobs J. with whom Gibbs,

This case involved an appeal by special leave and the High Court had to decide who bore the onus in proceedings brought by way of judicial review from the determination of a Commissioner. It was conceded that the appeal by way of judicial review was a hearing de novo. The facts of this case differed

from the facts in Phillips v. The Commonwealth of Australia,

supra, in that there had been a determination in 1966 that

Muratore was partially incapacitated and the decision from which the relevant appeal was brought was that of a commissioner who determined that Muratore was able to earn in some suitable employment or business an amount not less than his average weekly earnings before the injury. (p.178 11.22-30). It was held by Jacobs J. the the onus was on the Commonwealth, which was alleging a change in circumstances, to prove that change of

"The position is quite different if there has been no previous finding of partial incapacity with a consequent assessment of the compensation payable."

Reference was then made to J. & H. Timbers Pty. Ltd.v. Nelson

(1972) 126 C.L.R. 625. His Honour at p.179 11.27-30 said:

"It has always been recognised that 'incapacity for work', those words being taken to refer to physical incapacity, is only relevant where it produces an economic incapacity."

and at p.180 11.12-15 his Honour refered to judgments in Thompson

v. Armstrong and Royse Pty. Ltd. (1950) 81 C.L.R. 585 and said

that they do not justify a conclusion that economic loss can be regarded as an element wholly separate from incapacity for work.

Murphy J. at p.182 11.8-11 expressed the view that Phillips v.

The Commonwealth of Australia incorrectly differentiated between

total incapacity and partial incapacity. Jacobs J. on the other

hand at p.180 1.45 to p.181 1.14 cited Phillips v. The

Commonwealth of Australia without expressing any disapproval. In

my opinion Phillips v. The Commonwealth of Australia and The

Commonwealth of Australia v. Muratore are compatible because a distinction is made between total incapacity and partial incapacity. In the subject case, in my opinion, the employer has satisfied the onus of establishing that the appellant is no longer totally incapacitated. The onus of showing the extent of incapacity then lies with the appellant. This conclusion is also

consistent with the judgment of the majority of the High Court in

Both the learned magistrate and the learned trial judge proceeded upon the basis that in the circumstances the appe]lant bore the onus of establishing that he was totally incapacitated and to this extent I consider that they were in error. Nevertheless, it is clear that both the learned trial judge and learned magistrate proceeded upon the basis that they considered that the appellant was not totally incapacitated for work during the relevant period. Looking at the evidence, as I think we ought, I consider that it is sufficient to establish that during the relevant period the appellant was not totally incapacitated for work. This conclusion is assisted by the assessment by the learned magistrate of the reliability of the appellant as a

Another ground of appeal was against the refusal of the learned trial judge to permit the appellant to call further evidence under the provisions of s.215(3) of the Court of Petty Sessions Ordinance 1930. This section provides that the appeal shall be heard on the evidence before the Court of Petty Sessions together with any evidence admitted pursuant to leave granted by the judge upon the ground that the evidence is evidence in relation to matters which have occurred after the hearing of the proceedings in the Court of Petty Sessions or for any other special reason. The evidence which it was sought to have called was that of a doctor who had given evidence in the proceedings and it was sought to introduce evidence of the results of a myelogram performed after the hearing and which was said to be confirmatory of that doctor's evidence. The learned trial judge refused the application and in my opinion that was a proper exercise of his power. I consider that no adequate special reason has been shown for the admission of the evidence nor do I think in any real sense is it evidence in relation to a matter which had occurred since the first hearing, It is simply evidence said to be confirmatory of the opinion expressed by

Before us, senior counsel for the appellant, did not seek a fresh trial but sought firstly that we should determine that the onus rested on the employer to establish that there was no incapacity for work at all and that this court should order payment on the basis of total incapacity. The second

submission was that this court ought itself to attempt to

assess the measure of partial incapacity. The third submission was that the court should remit the matter back to the learned trial judge with a direction that it was appropriate to admit fresh evidence of the doctor (Dr. Newcombe) and, any further evidence if the trial judge thought fit, with a direction that in assessing the compensation to be paid to the appellant the

No suggestion was made to us that we should consider whether we had power to, and if so, whether we should, remit the matter back to the magistrate. Before the learned trial judge it was common ground that he had no power to so remit the matter. What I have already said shows that I would not

Before this Court could make any order based on partial incapacity there must be sufficient material before itt for it to be able to assess in money the entitlement, if any, which the appellant had to compensation for partial incapacity during the relevant period and the onus lay upon the appellant in this regard. In my opinion the material before the Court is not sufficient for this purpose. The learned magistrate clearly indicated that he did not believe the appellant. No assessment of money payable for partial incapacity can be made without an assessment of the amount which the appellant was "earning or is able to earn in some suitable employment or' business". Although a Tribunal which handles regularly large numbers of workmen's

compensation cases may draw upon certain of its judicial

knowledge (e.g. J. & H. Timbers Pty. Ltd. v. Nelson, supra, Gibbs J. at p.651), it 1s different when a Court such as

this is considering this matter or indeed when the learned trial judge was considering the matter. It is appropriate to note that the learned magistrate held that he was not satisfied

that the appellant had suffered any economic loss in the relevant

period. I would reject the appellant's second submission,

I see no reason to accede to the third submission. In any event I would direct that the onus, in relation to partial incapacity, rests on the appellant. The appellant has already failed to satisfy the learned trial judge on the issue of

I am of the opinion that it is appropriate for this Court to dismiss the appeal. I would mark my disapproval of the respondent's conduct in terminating the payments which it had made other than in accordance with paragraph 12 of the First

Schedule, by making no order as to the costs of the appeal to this Court.

Reasons for Judgment herein of his Honour ur. Justice Franks