Comcare v Nichols

Federal Court of Australia|1999-03-31|Before: Heerey J

REASONS FOR JUDGMENT 1 The Administrative Appeals Tribunal allowed an appeal by the respondent Mrs Dawn Nichols against a decision that she was no longer entitled to weekly payments of compensation under s 19 of the Safety Rehabilitation and Compensation Act 1988 (Cth) ("the 1988 Act"). The Tribunal found that Mrs Nichols no longer suffered from repetitive strain injury ("RSI") for which she had been initially awarded compensation. Mrs Nichols however claimed before the Tribunal that she also suffered from degenerative cervical spondylosis. The Tribunal found that she did suffer from that condition but was unable to find one way or the other whether the condition was work-related. The Tribunal held that Comcare had failed to discharge the burden of showing that payments should cease. 2 In its appeal to this Court, Comcare contends that the Tribunal should have held that the burden was on Mrs Nichols to establish all elements of her entitlement to compensation for her spondylosis, including the connection between her spondylosis and her employment. The Tribunal remitted the matter to Comcare for assessment of the amount of payments on the basis that she had "some residual capacity for work". By a cross-appeal Mrs Nichols contends that it was not open for the Tribunal to find that she had any capacity for work. The facts 3 Mrs Nichols was employed by the Australian Broadcasting Corporation as a part-time typist in its Launceston newsroom. She commenced work in 1964. On 5 June 1985 she lodged a claim under the Compensation (Commonwealth Government Employees) Act 1971 (the 1971 Act). She stated her injury or disease as "RSI both hands & wrists, degenerative disease cervical spine." 4 On 1 July 1985 a delegate of the Commissioner for Employees' Compensation made a determination. This relevantly provided as follows: "In the matter of a claim of Dawn Lorraine Nichols ("the employee"), employed at the relevant time by the Australian Broadcasting Corporation for compensation in respect of repetitive strain injury both hands and wrists and degenerative disease cervical spine. . DETERMINATION

The Tribunal's decision 7 The Tribunal first considered and rejected Comcare's argument that it had no jurisdiction to consider whether Mrs Nichols was incapacitated for work because of her degenerative condition of the cervical spine. Comcare's challenge to that finding of jurisdiction was abandoned at the start of the hearing of this appeal. It is however worth noting that in dealing with this issue the Tribunal said (par 15) that the Delegate was not "confined to considering whether the applicant was incapacitated for work solely as a result of her 'repetition strain injury'. All injuries with the requisite nexus to the applicant's employment had to be taken into account, subject to the legislative requirements as to the giving of notice and the making of claims, which in appropriate cases operate to exclude liability. As the applicant had in 1985 given notice of her degenerative disease of the cervical spine and made a claim in respect of it, the delegate should have considered whether the applicant was incapacitated for work as a result of that condition and, if so, whether Comcare was liable to pay her compensation in respect of that incapacity." 8 The Tribunal then went on to review the medical evidence as to Mrs Nichols' present disability. The Tribunal found the condition from which Mrs Nichols now suffered was a degenerative condition of the cervical spine. There was, however, in the Tribunal's view no medical evidence that the applicant had suffered from RSI since her payments were stopped and the Tribunal found that she had not so suffered. The Tribunal then discussed whether Mrs Nichols' neck condition had a sufficient nexus with her employment. It discussed her work duties with the ABC, which included typing news stories being dictated by journalists over the telephone. When doing this Mrs Nichols had to cradle her telephone receiver between her right shoulder and her head elevating the right shoulder and tilting her head to the right. That was said to be the practice in particular that caused the lasting aggravation of her cervical spine condition. After reviewing the evidence in some detail the Tribunal said (par 35): "35. I do not think it is necessary for me to refer in any more detail to the evidence relevant to the question whether the applicant's ABC work was a contributing factor to the 'contraction' of her cervical spine condition and the question whether that work caused a lasting aggravation of that condition. Clearly the medical witnesses have different views as to whether the applicant's ABC work could have contributed to the onset of the condition, and as to whether that work could have caused a lasting aggravation of that condition. This is an issue on which experienced and impressive medical experts differ. Their task is made difficult by some degree of unreliability in what the applicant says, and by some degree of uncertainty as to the physical effects of the applicant's work with the ABC and as to the scope and extent of her physical activities in the years of her retirement. It is possible for conditions and symptoms like hers to develop without any work input, and it is equally possible that her work has made a difference by contributing to or permanently aggravating her condition, as the incidence of symptoms on her right side would suggest. I am unable to make any finding one way or the other as to whether the applicant's work for the ABC was a contributing factor to the contraction or aggravation of her condition. I do not believe that obtaining further evidence would make the picture any clearer. I already have evidence from the applicant and fourteen other witnesses, four of them doctors." 9 The Tribunal declined to accept a submission from counsel for Comcare that the matter should be remitted to Comcare for further consideration of medical evidence. The Tribunal expressed its conclusion as follows: "For the reasons I have stated, my conclusion is that I am not prepared to make a finding that the applicant's employment by the Commonwealth was not a contributing factor to the contraction or aggravation of her degenerative condition of the cervical spine." 10 As to the quantum of weekly payments, the Tribunal referred to the provisions of s 19(3)(a) of the 1988 Act and the definition of "suitable employment" in s 4 and "normal weekly earnings" in s 8. The Tribunal concluded it was reasonably satisfied that Mrs Nichols had some capacity for paid employment. It referred to medical witnesses who had expressed that view. The Tribunal considered that "no thorough evaluation of the applicant's incapacity for work had been undertaken". 11 The Tribunal referred to the decision of the Full Court in McDonald v Director-General of Social v Security (1984) 1 FCR 354 and particularly the judgment of Woodward J at 358. The Tribunal then said: "51. In this case, the legislation does impose an onus of proof on either party. The question before the Tribunal is not whether the applicant was ever entitled to received [sic] weekly payments in respect of a condition or conditions described in her 1985 claim. It is common ground that she was then incapacitated for work and entitled to weekly payments. The question is whether the facts on and since 25 July 1996 have been such that the applicant has not been entitled to any weekly payments of compensation. When Comcare comes to make a decision on such a question, it is in the same position as the decision-maker in McDonald. Unless it reaches a state of mind that the weekly payments should be cancelled, it must not make such a decision. Thus, when this Tribunal comes to review a decision by Comcare cancelling weekly payments, it is in the same position as it was in McDonald. Once the Tribunal's fact-finding role is exhausted, unless it reaches a state of mind that the weekly payments were rightly cancelled, it must set aside the decision to cancel them. 52. On the material before me, I am unable to determine whether there is a sufficient connection between the applicant's work for the ABC and her degenerative condition of the cervical spine for that condition to be compensable. I am also unable to make a finding as to whether the amount that she is able to earn in 'suitable employment' is less than her 'normal weekly earnings', or has been at any time since 25 July 1996. 53. I do not see any likelihood of the Tribunal or the respondent being able to make a decision as to whether there is a sufficient nexus between the applicant's work for the ABC and her cervical spine condition no matter how much additional evidence is obtained. Plainly there are different views within the medical profession, and one can only speculate as to which view is correct. This is therefore not a case where the Tribunal should seek further evidence on that point, or remit the matter for the respondent to seek further evidence. 54. However the position is different in relation to the question whether the amount the applicant can earn in 'suitable employment' is less than her 'normal weekly earnings'. There is a strong chance that that issue will be able to be determined if the applicant's capacity for work is thoroughly assessed by one or more appropriate professionals. If such evidence leads to a conclusion that the applicant is able to earn more in 'suitable employment' than her 'normal weekly earnings', she will not be entitled to any weekly payments, and the decision under review will have to be affirmed. However if the applicant is not able to earn as much as her 'normal weekly earnings' in 'suitable employment' then, because of the practical impossibility of determining what nexus, if any, there is between the applicant's work for the ABC and her cervical spine condition, it will be improper to determine that she has been ineligible for weekly payments at any time since 25 July 1996, and those weekly payments will have to be restored as from that date in accordance with McDonald." 12 The Tribunal's determination therefore was to set aside the decision under review and remit the matter to Comcare for reconsideration with the direction that Mrs Nichols was incapacitated for work as a result of a degenerative condition of the cervical spine but has some residual capacity for work, and that her "normal weekly earnings" and the amount that she is able to earn in "suitable employment" must be assessed in respect of the period from 25 July 1996 to date, that she is to be paid weekly payments of compensation under the 1988 Act in respect of each week, if any, since 25 July 1996 when her "normal weekly earnings" have exceeded what she has been able to earn in "suitable employment".

Legislative Scheme 13 The foundation of liability on the part of Comcare and entitlement on the part of an employee is s 14(1) of the 1988 Act which provides: "Subject to this part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment." Generally speaking, the 1988 Act applies to injuries suffered prior to its commencement: s 124. 14 The requirement for a connection between the injury and Commonwealth employment is built into the definition of "injury" which by s 4 is defined to mean: "(a) a disease suffered by an employee; or (b) an injury (other than a disease) suffered by an employee, being a physical or mental injury arising out of, or in the course of, the employee's employment; or (c) an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee's employment), being an aggravation that arose out of, or in the course of, that employment; but does not include any such disease, injury or aggravation suffered by an employee as a result of reasonable disciplinary action taken against the employee or failure by the employee to obtain a promotion, transfer or benefit in connection with his or her employment." 15 "Disease" is also defined in a way which has a work contribution element. By s 4 "disease" means: "(a) any ailment suffered by an employee; or (b) the aggravation of any such ailment; being an ailment or an aggravation that was contributed to in a material degree by the employee's employment by the Commonwealth or a licensed corporation." 16 The present case is concerned with incapacity for work. Compensation for incapacity as a result of an "injury" (i.e. a work-related injury - see above) is governed by s 19 which in essence provides for payment of the difference between the amount of the employee's "normal weekly earnings" and the amount the employee is able to earn in "suitable employment". 17 The foregoing provisions deal with liability for compensation. The mechanism by which compensation becomes payable and enforceable is the making of a determination. Thus, for example, in the case of compensation for injuries resulting in incapacity, s 19(2) and (3) contain provisions creating liability for Comcare to pay the employee "in respect of the injury" certain percentages of normal weekly earnings, less the amount the employee is able to earn in suitable employment. Section 19(4) provides that "(i)n determining for the purposes of sub-section (2) and (3) the amount per week that the employee is able to earn in suitable employment", Comcare shall have regard to certain specified matters. By s 61 a determining authority, as soon as practicable after it makes a determination, is to serve on the claimant a notice in writing setting out the terms and reasons for the termination and a statement that the person may request a reconsideration under s 62(2). Reconsideration of determinations is dealt with in s 62. Section 62(1) provides for the determining authority on its own motion to reconsider a determination, whether or not a proceeding has been instituted. Section 62(2) deals with a request to a determining authority to reconsider a determination. The s 62(2) request is to be made within thirty days of determination coming to the notice of the person concerned. However in the present case Comcare acted under s 62(1). This is the source of power for Comcare to cease payments of compensation where, for example, the employee is no longer suffering from incapacity.

Who must prove? 18 Where an administrative decision-maker, such as the Tribunal, is left in doubt as to whether a relevant fact exists, what course does the law dictate? In civil and criminal litigation of course there are long established rules as to the onus of proof. What happens in an administrative setting was discussed by Woodward J in McDonald. The issue there was whether the appellant was permanently incapacitated for work to the extent of 85 per cent or more so as to be entitled to an invalid pension. The appellant had received a pension but it was subsequently cancelled. Woodward J said (at 356): "The first point to be made is that the onus (or burden) of proof is a common law concept, developed with some difficulty over many years, to provide answers to certain practical problems of litigation between parties in a court of law. One of the chief difficulties of the concept has been the necessity to distinguish between its so-called 'legal' and 'evidential' aspects. The concept is concerned with matters such as the order of presentation of evidence and the decision a court should give when it is left in a state of uncertainty by the evidence of a particular issue. The use outside courts of law of the legal rules governing this part of the law of evidence should be approached with great caution. This is particularly true of an administrative tribunal which, by its statute 'is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate' (AAT Act s. 33(1)(c)). Such a tribunal will still have to determine practical problems such as the sequence of receiving evidence and what to do if it is unable to reach a clear conclusion on an issue, but it is more likely to find the answer to such questions in the statutes under which it is operating, or in considerations of natural justice or common sense, than in the technical rules relating to onus of proof developed by the courts. However these may be of assistance in some cases where the legislation is silent. Whether the principles adopted by such a tribunal, arising from these various considerations, are appropriately dealt with under the heading 'onus of proof', becomes a matter of choosing labels. It would probably be more convenient to avoid using that expression in cases such as the present. There is certainly no legal onus of proof arising from the fact that this is an 'appeals' tribunal, because the AAT is required, in effect, by s. 43 of the AAT Act, to put itself in the position of the administrator in carrying out its review and, in the light of the material before the AAT, (not the material before the administrator, Drake v Minister for Immigration and Ethnic Affairs 91979) 46 F.L.R. 409 at 419) make its own decision in place of the administrator's. The AAT itself, in a series of cases beginning with re Ladybird Children's Wear Pty Ltd (1976) 1 A.L.D. 1, has taken the view that there is no presumption that the administrator's decision is correct. This is clearly the right approach to the matter. … The next question which arises is whether once an invalid pension has been granted, there is an evidential onus on the Director-General to satisfy himself, or on appeal the AAT, of changed circumstances before cancelling the pension. This was the main issue argued before us under the first question of law. … It is true that facts may be peculiarly within the knowledge of a party to an issue, and a failure by that party to produce evidence as to those facts may lead to an unfavourable inference being drawn - but is not helpful to categorise this common-sense approach to evidence as an example of an evidential onus of proof. The same may be said of a case where a good deal of evidence pointing in one direction is before the Tribunal, and any intelligent observer could see that unless contrary material comes to light that is the way the decision is likely to go. Putting such cases to one side there can be no evidential onus of proof in proceedings before the AAT unless the relevant legislation provides for it, and in the present case the Social Security Act 1947 (Cth) does not. If the AAT finds itself in a state of uncertainty after considering all the available material, unable to decide a question of fact either way on the balance of probabilities, it will be necessary for it to analyse carefully the decision it is reviewing. If, for example, it is a decision whether or not to cancel a pension in the light of changed circumstances, then it has failed to achieve the statutory requirement of reaching a state of mind that the pension should be cancelled. If, on the other hand, it is a decision, to be made in the light of fresh evidence, whether or not the pension should ever have been granted in the first place, then it has failed to be satisfied that the person ever was permanently incapacitated for work. For a comparable analysis as to the onus of proof (properly so-called) before a judicial tribunal see Phillips v. The Commonwealth (1964) 110 C.L.R. 347 at 350." 19 Phillips (1964) 110 CLR 347 concerned a Commonwealth employee who was receiving compensation under the Commonwealth Employees' Compensation Act 1930 (Cth) ("the 1930 Act"). A Delegate of the Commissioner made a determination that the appellant had been able to earn in some suitable employment or business a weekly amount which was not less than her pay at the date of injury and thereupon she ceased to be entitled to weekly payments of compensation. After referring to s 20(1) of the 1930 Act the High Court (Kitto, Taylor and Owen JJ) said (at 350): "… upon any such review it is, we think, for the Court to pronounce anew upon the rights of the parties as disclosed by the evidence before it. That being so the application of the ordinary principles relating to the determination of disputed questions of fact by judicial tribunals requires the conclusion that if a claim for compensation be rejected by the Commissioner or his delegate the onus of proving the necessary facts to entitle the applicant to what is virtually an award of compensation will be upon the claimant in later proceedings before the County Court. Likewise, the application of the same principles may well mean that in some cases the onus of proving critical facts may rest upon the Commonwealth. Such a case would be where the Commissioner has purported to terminate an employee's right to compensation under an antecedently existing determination by reason of a material change of circumstances. This proposition was disputed by the Commonwealth on the authority of observations made in Pethick v. The Commonwealth of Australia (1960) 103 CLR 643 at 649, but that case was not concerned with the termination of a right to compensation by reason of any change in material circumstances; it was concerned with the question whether the appellant ever had a right to compensation." 20 The facts of Phillips are instructive for present purposes. On the rehearing of the employee's appeal in the County Court of Victoria it was found in fact that she was not totally incapacitated. But she claimed that she was partially incapacitated or at any rate that the onus was on the Commonwealth to prove that she was not. The High Court said (at 351): "In the first place, there arose for determination the question whether the liability of the Commonwealth to pay compensation to the appellant 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, it was discharged and the finding of the County Court cannot be challenged. Then arose the question whether compensation should be awarded to the appellant as a person partially incapacitated and with a diminished 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 the onus was, we think, clearly upon the appellant. Accordingly, we do not think that the learned County Court Judge made any error of law upon this point." 21 In The Commonwealth v Muratore (1978) 141 CLR 296 an employee had received compensation under the 1930 Act. A determination was made that he was able to earn an amount in suitable employment and his compensation was reduced to $11.94 per week. A further determination was made that he was able to earn an amount not less than his weekly pay, as a consequence of which he was not entitled to compensation at all. The employee argued that the onus of proof of matters which would entitle the Commonwealth to reduce his compensation from $11.94 per week to nil lay upon the Commonwealth. The High Court (Jacobs J, with whom Gibbs and Stephen JJ agreed) cited with approval the statement of the Master of the Rolls in Cory Brothers & Co Ltd v Hughes [1911] 2 KB 738 at 743: "… there is an express power given to either party to review the amount of compensation, which may be either increased or diminished or terminated. The employer may say 'I am now paying you too much'; the man may say 'You are now paying me too little'; or the employer may say 'I ought now to pay you nothing at all.' But whoever makes that application is the person on whom the burden of proof lies. Here it is to my mind impossible to escape from the conclusion that the burden is on the employers to satisfy the Court that the man at this moment is not under any incapacity by reason of the accident which admittedly befell him."

Conclusion on appeal 22 In the present case, Mrs Nichols was receiving compensation in respect of an injury (RSI) which had been found in 1985 to result in incapacity for work. Comcare contended in 1996 that she no longer suffered from RSI. Comcare therefore had to establish this fact. Perhaps more accurately, it was the Tribunal, as an administrative decision-maker, which had to satisfy itself that this was the case. It was so satisfied. In coming to this conclusion, it made a finding of fact which is not open to review. 23 However Mrs Nichols also contended that (i) she had a cervical spondylosis (ii) which was work-related and (iii) which contributed to her present incapacity. If all three elements were established she would have an entitlement to compensation. The Tribunal had to be satisfied of the existence of each element. On its review of the evidence the Tribunal was not so satisfied as to (ii). Therefore in my opinion the consequence in law must be that Mrs Nichols' claim failed and the Tribunal erred in law in not so holding. This conclusion is not affected by the fact that Mrs Nichols had originally included cervical spondylosis in her claim. For all the Tribunal knew, a consideration back in 1985 might have reached the same state of uncertainty. 24 The appeal is allowed with costs. It follows that the cross-appeal is dismissed with costs. The decision of the Tribunal dated 6 October 1998 is set aside and in lieu thereof it is ordered that the determination of Comcare dated 8 July 1996 ceasing Mrs Nichols' entitlement to compensation is affirmed. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey

Associate: Dated: 30 March 1999 Counsel for the Applicant: Mr Gavin Loughton

Solicitor for the Applicant: Australian Government Solicitor

Safety Rehabilitation and Compensation Act 1988(Cth)ss 4, 8, 14, 19, 61, 62, 124

Government Employees) Act 1971(Cth)

Social Security Act 1947(Cth)

Employees' Compensation Act 1930(Cth)

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