Comcare v Davies
[2008] FCA 393
At a glance
Source factsCourt
Federal Court of Australia
Decision date
1996-02-13
Before
O'Loughlin J, Flick J
Source
Original judgment source is linked above.
Judgment (14 paragraphs)
REASONS FOR JUDGMENT 1 This is an appeal from a decision of the Administrative Appeals Tribunal made on 3 October 2007: Re Davies and Comcare [2007] AATA 1829. In that decision the Tribunal concluded that as from 3 December 2001 Ms Davies had been partially incapacitated for work as a result of an injury she had suffered and was entitled to compensation in respect to that injury. 2 Comcare seeks to appeal from that decision. Its Grounds of Appeal are: (i) whether the Tribunal misconstrued the meaning of the phrase "able to earn" as it arises in subsection 19(2) of the Safety, Rehabilitation and Compensation Act 1988 (Cth); and (ii) whether the Tribunal failed to provide adequate reasons as required pursuant to subsection 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) for that part of its decision at paragraph 71(5). Paragraph 71(5) of the Tribunal's decision concluded that: during the period 3 December 2001 to 30 June 2004 inclusive, the amount which Ms Davies was able to earn in employment in the business was nil. 3 Section 19(2) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) relevantly provides as follows: Subject to this Part, Comcare is liable to pay to the employee in respect of the injury, for each week that is a maximum rate compensation week during which the employee is incapacitated, an amount of compensation worked out using the formula: NWE - AE where: "AE" is the greater of the following amounts: (a) the amount per week (if any) that the employee is able to earn in suitable employment; (b) the amount per week (if any) that the employee earns from any employment (including self‑employment) that is undertaken by the employee during that week. "NWE" is the amount of the employee's normal weekly earnings. That provision, by its terms, requires a calculation to be undertaken whereby there is deducted from an employee's normal weekly earnings an amount which is the greater of either the weekly amount that an employee is "able to earn in suitable employment" or the amount which an employee earns from "any employment (including self-employment) that is undertaken by the employee during that week". The legislative intention of this provision is presumably to ensure that an employee is not entitled to retain the whole of his actual earnings and also to retain 100% of his normal weekly earnings: Comcare v Line [2002] FCA 553 at [60] per Carr J. And, the amount that an employee may be "able to earn" is not to be equated with profit: J & H Timbers Pty Ltd v Nelson (1972) 126 CLR 625. Windeyer J there observed at 643: … The earning capacity of a man as a worker is measured by the remuneration that is the fruit of his labour, his wages or their equivalent. It is not to be measured by the profits he derives by embarking his capital in a business or by his usual capital equipment in earning money… See also: Comcare Australia v Woodbridge (Unreported, Federal Court of Australia, O'Loughlin J, 13 February 1996). 4 The application of this provision to Ms Davies' claim for compensation arose within a factual context which is not now in dispute. 5 Ms Davies had been employed as a teacher. She commenced teaching in 1971. Between late November and mid December 1996 she took a group of students on an excursion to Indonesia. One of the students became extremely ill and had to be evacuated. The student was in such a condition that at times he lost consciousness and stopped breathing. It was that incident which caused stress to Ms Davies, to the extent that by 1998 she "was unable to deal with the hierarchy of the Department and she continued to feel as though she had done something wrong". The Tribunal found that she was "incapable of employment in a hierarchical structure such as the Public Service". 6 By 1999 Ms Davies and her husband had investigated the prospect of establishing a business. She had written to Comcare stating that she could not "return to my normal work…. I am at the stage of 'new work, new employer' but want to employ myself (don't trust anyone and I'm almost 50 yrs of age". She had had a long interest in Indonesia and its culture and set up a business "involving the marketing of Indonesian artefacts, advice on Indonesian-type landscaping, and the provision of support services to teachers of Indonesian".