Comcare v Pantic

The Statutory Setting 6 Divisions 3 and 4 of Part II of the 1988 Act provide respectively (a) for compensation to be payable to an employee "who is incapacitated for work" as a result of an injury and (b) for compensation where an injury to an employee results in "a permanent impairment". A permanent impairment is defined by the Act to mean the loss, the loss of the use, or the damage of malfunction, of any part of the body or bodily system or function or part thereof, which is likely to continue indefinitely. 7 Mrs Pantic was in receipt of regular incapacity payments (seemingly under s 19, then s 21, of Division 3) between 1990 and April 2004. Her 2007 compensation claim for a permanent impairment was founded on s 24(1) and s 27 of Division 4. 8 The effect of those two sections along with s 28 (a machinery provision) was, as indicated by the Full Court in Hoyle v Telstra Corporation Ltd (1997) 145 ALR 148 at 149-150, that: a permanently impaired employee becomes entitled to receive a specific lump sum, on top of any other compensation to which he or she is entitled. As will be seen, such was not the case in respect of claims made under the 1971 Act. It is for this reason that the effect of the transition provisions in the 1988 Act are of such significance in this matter. 9 Turning to them, s 124(1) to (4) provide insofar as presently relevant that: (1) Subject to this Part, this Act applies in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day. [Ie 1 December 1988] (1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury, loss or damage under the … 1971 Act. (2) A person is not entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was not payable in respect of that injury, loss or damage … (c) … under the 1971 Act as in force when the injury, loss or damage was suffered. (3) A person is not entitled to compensation under section 24 … in respect of a permanent impairment … being an impairment … that occurred before the commencing date, if: … (b) the person was not entitled to receive compensation of a lump sum in respect of that impairment … (iii) … under the 1971 Act as in force when the impairment … occurred. (4) The amount of compensation (if any) that a person is, by virtue of this section, entitled to receive under section 24 … in respect of a permanent impairment … being an impairment … that occurred before the commencing day, shall be the same as the amount of the compensation that would have been payable to that person, if this Act had not been enacted, under … (c) … the 1971 Act as in force when the impairment … occurred. 10 Reverting again to Hoyle, the Full Court's characterisation of the burden of s 124 was that (at 152): … it is clear that the parliament proceeded on the basis that, where the entitlement to compensation under the [1988] Act has a relevant nexus with a period before the commencing day, the appropriate general principle should be that an employee is not to be deprived of any compensation that would have been payable under the 1971 Act but for its repeal, but is not to be entitled to any greater compensation than would have been payable under that Act. 11 Because it provides a convenient encapsulation of the relevant provisions of the 1971 Act for present purposes, it is appropriate to quote Hoyle further at a little length: at 152-153. Part III of the 1971 Act provided for the payment of compensation under the three heads [of certain out of pocket expenses, lump sum payments [and] weekly payments during periods of incapacity for work]. Thus, s 37 imposed a liability to pay compensation in respect of the cost of medical treatment obtained in relation to an injury … Section 45 of the 1971 Act provided for the payment of weekly compensation to an employee where an injury to the employee resulted in the employee's being totally incapacitated for work. Section 46 provided for the payment of weekly compensation where an injury to an employee resulted in the employee's being partially incapacitated for work … The provision of the 1971 Act which corresponded, in general terms, with s 24 of the [1988] Act, in providing for payment of a lump sum, was s 39. Section 39(3) provided that, where an injury to an employee resulted in a loss specified in s 39(4), the compensation payable in respect of that injury was to be an amount equal to such percentage of the amount stated in s 39(3) as was specified in s 39(4) in relation to that loss. Section 39(4) contained a table which specified, in one column, the nature of loss to be compensated and, in the second column, the relevant percentage. The nature of loss column comprised, for the most part, losses of parts of the body … Clearly enough, those provisions created entitlements to receive compensation of a lump sum in respect of losses which could constitute permanent impairment within the meaning of s 124(3) of the [1988] Act. However, s 39(14) provided that compensation under that section was not payable in respect of an injury: so long as the employee is, or is likely to become, totally incapacitated for work where the incapacity for work results, or, if it occurs, will result, in whole or in part from that injury. (Emphasis added.) Further, ss 45(9) and 46(5) of the 1971 Act provided that, where a determination was made that an amount of compensation was payable under s 39, weekly compensation was not payable to the employee in respect of any period of incapacity for work resulting from that injury occurring after the date of the making of that determination. Under s 50(1), where an injury in respect of which a lump sum was paid to an employee in pursuance of s 39 resulted in the employee, at any time after the payment of that lump sum, being totally incapacitated for work, and the incapacity was likely to continue indefinitely, weekly compensation was to be payable in accordance with s 50 during the period of the total incapacity. The compensation was to be determined by reference to a formula, the effect of which was that the lump sum payment was to be treated as payment in advance of the weekly compensation payable under s 50. The effect of ss 39(14), 45(9), 46(5) and 50, therefore, was that an employee could not retain the benefit of a lump sum payment and at the same time have the benefit of weekly compensation payments in respect of a period of total incapacity. Consistently with that policy, and in order to prevent totally incapacitated employees taking a lump sum payment, s 39(14) of the 1971 Act made it clear that the lump sum provided for in s 39(3) was not to be payable so long as an employee was, or is likely to become, totally incapacitated for work, where the incapacity resulted, or would result, in whole or in part from that injury. (Emphasis added.) 12 It is important to note for present purposes that the Act was structured so as to create a distinct disincentive for an employee to claim a s 39 lump sum compensation payment for a loss suffered, where the injury occasioning it was one which was likely to result in subsequent periods of partial or total incapacity for work. An employee who had received a lump sum payment could not thereafter receive weekly payments for periods of incapacity for work save in the exceptional circumstances prescribed by s 50 (and, though not presently relevant, s 49). 13 As was noted in Hoyle the distinction between total incapacity for work and partial incapacity for work which exists under ss 45 and 46 of the 1971 Act does not exist under the 1988 Act. The relevant concept under the latter Act is simply "incapacity for work" see s 19. In the present matter, because of s 39(14) of the 1971 Act, total incapacity for work can disqualify a person from receipt of a lump sum under of s 24 of the 1988 Act because of the operation of s 124 of that Act. 14 Section 26 of the 1971 Act, which dealt with total incapacity for work provided that: an employee shall be deemed to be totally incapacitated for work if his incapacity is such that he is fitted only for employment of a kind that is not commonly available and employment of that kind is not reasonably available to him. What needs to be emphasised is that total incapacity for work does not presuppose an enduring incapacity for an indefinite period. As the Act makes plain, the incapacity may be for a period, and for a very short one at that: see eg s 47; see also s 50(1) which does require for its purposes that the total incapacity is "likely to continue indefinitely". 15 A presently relevant consequence of this was acknowledged by the Full Court in Hoyle in its consideration of the temporal operation of the s 39(14) disentitlement to compensation. That disentitlement subsists "so long as the employee is, or is likely to become, totally incapacitated for work". Hence the Court observed of the appellants in that case who were precluded from receiving lump sum compensation because of s 39(14): If, at some time before the commencing day, either of the appellants had ceased to be totally incapacitated for work, there would have been an entitlement to compensation under s 39(3) of the 1971 Act. Further, if either of the appellants ceased to be totally incapacitated at some time after the commencement day, s 124(3) might not preclude entitlement to compensation under s 24 of the Compensation Act. The factual issues arising in relation to that question were not fully investigated below and we do not decide that question: (at 156). The Court also was not required to, and did not, consider was the converse situation to that to which it referred ie where, having received s 39(3) compensation because no longer totally incapacitated, the employee later became totally or partially incapacitated again and sought compensation by way of weekly payments for that incapacity for work. Nonetheless, it is clear that in either case the employee would be precluded by s 45(9) or s 46(5) from receiving such weekly payments for the period of that incapacity. The only presently relevant exception to this preclusion is provided by s 50 of the 1971 Act. It applies only to total incapacity which is "likely to continue indefinitely" and the weekly payments are required to be discounted to take account of the lump sum previously paid under s 39. 16 In contrast to the 1971 Act, the 1988 Act uses the concept of "incapacity for work": see s 19; a formula which is tied in turn to what is described as "suitable employment". Both are defined terms. The former is defined in s 4(9) as follows: A reference in this Act to an incapacity for work is a reference to an incapacity suffered by an employee as a result of an injury, being: (a) an incapacity to engage in any work; or (b) an incapacity to engage in work at the same level at which he or she was engaged by the Commonwealth or a licensed corporation in that work or any other work immediately before the injury happened. 17 "Suitable employment" is defined in s 4(1) to mean: (a) in the case of an employee who was a permanent employee of the Commonwealth or a licensee on the day on which he or she was injured and who continues to be so employed - employment by the Commonwealth or the licensed corporation, as the case may be in work for which the employee is suited having regard to: (i) the employee's age, experience, training, language and other skills; (ii) the employee's suitability for rehabilitation or vocational retraining; (iii) where employment is available in a place that would require the employee to change his or her place of residence - whether it is reasonable to expect the employee to change his or her place of residence; and (iv) any other relevant matter; and (b) in any other case - any employment (including self-employment), having regard to the matters specified in subparagraphs (a)(i), (ii), (iii) and (iv). 18 The point to be emphasised is that there is a discontinuity between the concept of "total incapacity" under s 39(14) of the 1971 Act and the concept of "incapacity" as used in Division 3 of the 1988 Act: see eg s 19. It will be necessary to return to this later in these reasons. 19 During the hearing of the appeal to this Court it became apparent that Mrs Pantic had been in receipt of periodic incapacity payments from Comcare from 10 October 1990 until she turned 65 on 25 April 2004 when they ceased to be payable by virtue of s 23(1) of the 1988 Act. While the initial payments she received were made under s 19 of the 1988 Act, they were from her redundancy on 23 November 1990 paid under s 21 of the Act. That provision (which it is unnecessary to refer to in detail) is concerned with the calculation of the compensation that is payable for injuries resulting in incapacity where the employee is in receipt of a lump sum benefit under a superannuation scheme as a result of the employee's retirement. 20 Neither the Tribunal, nor the parties in their submissions attributed any significance to either of these matters.

The Tribunal's Decision 21 This can be outlined relatively shortly. The Tribunal concluded that, apart from certain relatively short periods in 1985 and 1986, Mrs Pantic did not become totally incapacitated until after 23 November 1990. For the most part she had been only partially incapacitated for the period following her injury. Her impairment became permanent on 7 April 1987. In consequence, provided the compensation payable to her was not nil, she was eligible for consideration of a lump sum compensation payment under the terms of the 1971 Act during her periods of "partial incapacity": Reasons [61]. 22 The Tribunal then turned to s 124(4) of the transitional provision and s 39(14) of the 1971 Act and asked what was the compensation that would have been payable to Mrs Pantic during her period of partial incapacity. It recognised that, if that question was to be answered as at the time when the claim was made in 2007, she would have been disentitled under s 39(14) to any lump sum because by that time she was totally incapacitated for work and therefore was precluded by the subsection from being paid a lump sum for her loss. The question then became: "At what time must the s 39(14) test be applied?" 23 The Tribunal's reasoning on this matter is captured in the following (Reasons at [46]-[51]): 46. Counsel for Mrs Pantic argued that the test could be applied at any time up to the date of the claim for permanent impairment. 47. As indicated earlier, counsel for Comcare maintained that the time at which the assessment must be made was the time of the application for permanent impairment. 48. There are conflicting authorities on the issue. Sackville J noted at first instance in Hoyle v Telstra Corporation Ltd [(1997) 144 ALR 483 at 493]: The use of the past tense in s 124(3)(b) focuses attention on the claimant's entitlement to lump sum compensation under the 1971 Act (as in force when the impairment occurred) at some time in the past. The paragraph does not specify the precise time in the past at which the claimant's entitlement is to be considered. However, the use of the past tense suggests that the notional assessment of the claimant's entitlement under the 1971 Act is to be carried out by reference to a date or period preceding the commencing day. 49. He acknowledged, however, that section 124(3) must be interpreted consistently with section 124(4). According to Sackville J, that sub-section, in conjunction with section 39(14) of the 1971 Act, provided that a person who suffered a pre-commencing day permanent impairment should receive no lump sum compensation in respect of that impairment if, at the time of the claim, the person was totally incapacitated for work. 'At the time of the claim' meant the time of the claim for permanent impairment under the Act. In Mrs Pantic's case that would have been in 2007. His findings on this issue are, therefore, equivocal. 50. The Full Court in Hoyle did not clearly address this issue. The Court said at one point that 'Our reasoning in reaching that conclusion [as to the effect of section 124 of the Act and section 39(14) of the 1971 Act] is not significantly different from the reasoning of Sackville J'. That statement could be taken to encompass Sackville J's findings in relation to the time for application of the test. Against this, the Court also noted at one point 'If at some time before the commencing day, either of the appellants had ceased to be totally incapacitated for work, there would have been an entitlement'. . The Court's findings, tied as they were to the facts of the case, did not definitively identify the point in time for the test to be applied. 51. By implication, however, since the Full Court acknowledged that had an employee suffered periods of partial incapacity, interspersed with periods of total incapacity prior to making the claim for permanent impairment, they would not have been excluded from lump sum compensation during those periods of partial incapacity, the Court had assumed that the entire period during which the person suffered a permanent impairment must be considered. 24 The Tribunal returned to the Full Court's dictum in Hoyle and to what the Tribunal considered it implied (at [60]-[61]): 60. … [T]he Full Court clearly left open the possibility that section 39(14) would not have precluded a lump sum payment in accordance with the provisions of the 1971 Act had there been periods when either applicant had not been totally incapacitated. It followed that the Court did not preclude application of the test in section 39(14) at times preceding the date of the claim for permanent impairment. 61. This statement covers the situation of Mrs Pantic who, apart from the period immediately following her injury, had only brief periods of total incapacity before the commencing day. Indeed, although Mrs Pantic was in receipt of total incapacity payments between 10 October 1990 and 24 November 1991, she was on partial incapacity payments from that time until she turned 65 on 25 April 2004. Subject to the short periods of incapacity for work prior to 1990, and the approximately twelve months from October 1990 to November 1991, Mrs Pantic was only partially incapacitated. In accordance with this statement from Hoyle she would not be precluded from eligibility for consideration of lump sum compensation at these times of partial incapacity. (Emphasis added.) 25 The Tribunal went on to indicate it saw no policy objections to concluding that Mrs Pantic was not precluded by s 39(14) from receiving a lump sum payment by the terms of s 124(3). Accordingly it found (at [69]): [A]s Mrs Pantic was not 'totally incapacitated for work' until after 21 November 1991 she would have been entitled to receive a lump sum payment. (Emphasis in original.) The Tribunal, I should add, went on without legislative mandate to order some abatement of the lump sum because of the weekly payments she received while totally incapacitated, invoking with respect a not obvious analogy with the formula in s 50.

The Appeal 26 There are two live questions in this appeal. While a third question relating to the Tribunal's reliance upon s 50 of the 1971 Act was formally raised, it need not be considered. That section has no relevance at all to the issue the Tribunal had to determine and the parties are at one on this. The first question related to the correct application of s 39(14) of the 1971 Act and s 124(3) and (4) of the 1988 Act. The second, was whether there was any evidence to support the Tribunal's finding that from 23 November 1991 until 25 April 2004 Mrs Pantic was paid "partial incapacity benefits".

(i) Section 39(14) 27 The question that arises here can be answered briefly. I will assume for present purposes that the Tribunal's finding that Mrs Pantic was in receipt of total incapacity benefits from 10 October 1990 until 23 November 1991 and thereafter of partial incapacity benefits until she turned 65. 28 It is clear policy in the 1971 Act - and was confirmed by the Full Court in Hoyle at 156 - that after having received weekly payments during a period of incapacity for work, an injured employee is not thereafter precluded from making a claim for permanent impairment in respect of the loss resulting from the injury which resulted in the incapacity for work. An obvious reason why such claims should be allowable is that the injury which occasions the permanent impairment commonly also occasions an immediate but finite period of incapacity for work from the time the injury was suffered. However, if the employee then makes a successful claim for a permanent impairment resulting from that injury, the employee's ability later to claim weekly payments during a period of incapacity for work is seriously compromised as I earlier noted and this because of the operation of s 45(9) and s 46(5) of the 1971 Act. 29 I need only refer to s 46(5). It provides, insofar as presently relevant that: … where a determination is made that an amount of compensation is payable to the employee under section 39 in respect of an injury that caused a loss referred to in that section … compensation is not payable to the employee under this section in respect of a period of incapacity for work resulting from that injury, being a period occurring after the date of the making of the determination. (Emphasis added.) 30 There is only one presently relevant exception to this prohibition and it only applies to an employee who makes a claim for weekly payments for incapacity for work, the employee being totally incapacitated for work and that incapacity being "likely to continue indefinitely". To reiterate the Full Court's observations on these provisions in Hoyle (at 153): The effect of ss 39(14), 45(9), 46(5) and 50, therefore, was that an employee could not retain the benefit of a lump sum payment and at the same time have the benefit of weekly compensation payments in respect of a period of total incapacity. Consistently with that policy, and in order to prevent totally incapacitated employees taking a lump sum payment, s 39(14) of the 1971 Act made it clear that the lump sum provided for in s 39(3) was not to be payable so long as an employee was, or is likely to become, totally incapacitated for work, where the incapacity resulted, or would result, in whole or in part from that injury. 31 If, which is not the case, Mrs Pantic had made a successful s 39 permanent impairment claim when her condition was accepted to be permanent prior to 1 December 1988, this would have attracted the operation of variously s 45(9) and then s 46(5) to the claims for incapacity benefits she in fact made from 10 October 1990 until she turned 65 in 2004. Being unable to invoke the ameliorative provisions of s 50 (on the Tribunal's finding as to the form of incapacity benefits she then received), she would have been precluded from receiving those benefits. If, contrary to the Tribunal's finding, she was totally incapacitated for that period she may well have been able to attract provisions of s 50, but she would have had to bring into account the lump sum previously received. 32 As the Tribunal correctly recognised the circumstances of the present claim are the converse of what is covered explicitly by the provisions of the Act. The Act envisages a lump sum has already been paid and then weekly compensation payments are sought. Sections 45(9), 46(5) and 50 constitute the legislative response. Can Mrs Pantic enjoy the benefit of both claims, though she could not have had she previously made a permanent impairment claim before seeking the weekly payments for incapacity she in fact received? 33 As I earlier indicated, Mrs Pantic's incapacity benefits payments ceased on her turning 65 by virtue of s 23 of the 1988 Act ("compensation is not payable under sections 19 [or] 21… to an employee who has reached 65"). The policy reflected in the 1988 Act was seemingly that Mrs Pantic was not expected to be in the workforce after age 65: see also ss 135 and 136 of the 1988 Act. 34 Turning to the question I posed above, having regard to the manifest policy of the 1971 Act, there can only be one answer in my view. If, as was said in Hoyle, the effect of ss 39(14), 45(9), 46(5) and 50 was that an employee could not retain the benefit of a lump sum payment and at the same time have the benefit of weekly compensation payments in respect of a subsequent period of incapacity, I do not consider it permissible to infer that the Act nonetheless intended to allow an employee to obtain the benefit of a lump sum payment for permanent impairment for a period prior to that for which that employee has received incapacity benefits. Those were benefits he or she would not have been able to acquire if that lump sum had been obtained prior to the claim for them. As I read the Tribunal's reasons, the various periods it was addressing for the purpose of the impairment claim were those prior to when she was "totally incapacitated for work" which, as it said, was "not until after 21 November 1991": Reasons [69] and see also [61]. . The Tribunal, in my view, erred in concluding that such a claim could be made with the lump sum being adjusted in a fashion the converse of s 50 to take account of the later incapacity payments. There was not a legislative mandate for making such an adjustment. 35 The Tribunal's focus upon a particular period or periods when an employee was not incapacitated for work and the linking of the entitlement to claim compensation for impairment to that period or those periods as such, led it to distort the scheme of the Act itself. For so long as an employee who has suffered a qualifying permanent impairment continues to receive incapacity payments, or leaves open the option to receive such payments in the future, the employee foregoes his or her entitlement to receive such lump sum for permanent impairment as would otherwise be payable to him or her. In effect, an "election" is being made between inconsistent entitlements (save in the exceptional circumstances covered by ss 50 and 49). That election, though, can be brought to an end for the future either after a period of incapacity has come to an end or before any incapacity benefits have been received at all, by the employee claiming, then receiving, compensation for impairment. By so doing, and subject to s 50, the employee foregoes thereafter the entitlement he or she would otherwise have had to receive incapacity payments. 36 The Act's concern was not with indentifying periods when a claim for permanent impairment could have been, but was not, made. Rather it was with the particular compensation regime which an employee was able to invoke at the time he or she made a claim. To ascertain this required consideration of the employee's past "elections", if any, as also the potential applicability of s 39(14) which precluded entitlement to a lump sum if the employee was likely to become totally incapacitated. Up until she ceased to be entitled to receive payments for incapacity for work, Mrs Pantic had not availed of her entitlement to be compensated for a permanent impairment. However, she had until that date been in receipt of incapacity benefits and by so doing had, till then, foregone her entitlement to compensation for permanent impairment. Accordingly, she was not entitled to claim such compensation for past periods when she could have made, but did not make, such a claim. Put shortly impairment claims are for impairments, not for periods. 37 This conclusion I should emphasise does not depend upon s 39(14) of the 1971 Act as such. Rather it follows from the structure of the Act's provisions and the clear legislative purpose it betrays. The conclusion equally does not depend upon a finding (contrary to that of the Tribunal) that Mrs Pantic was totally incapacitated for work prior to her turning 65 - although the Tribunal's reasoning on her incapacity is, with respect, not easy to unravel: cf Reasons [61] with [69]-[71]. 38 Mrs Pantic has obtained all of the compensation she was entitled to receive under the 1988 Act for incapacity, any such entitlement she had coming to an end when she turned 65: see s 23 of the 1988 Act. 39 Consistently with Hoyle, an employee can make a claim for a lump sum payment for a s 39(4) loss after having received incapacity payments for a preceding period of incapacity resulting from the injury occasioning that loss. Though she is now precluded from making any future claim for incapacity benefits because of her age, can Mrs Pantic still make a claim for an enduring permanent impairment? This is not an issue considered or determined by the Tribunal. 40 Such a claim raises no potential problem with ss 45(9), 46(5) and s 50 because no possible incapacity claim can be made by Mrs Pantic now. But what of s 39(14)? It is an agreed fact that as at 6 September 2007 when Mrs Pantic made her claim she was totally incapacitated for work. There is no agreed fact as to whether her incapacity has subsisted. Assuming it has, Mrs Pantic's present circumstances appear to fall as of course within the language of the subsection. Yet the obvious premise of the provision is that the employee is nonetheless entitled to make a claim for incapacity benefits. Mrs Pantic cannot. Could the subsection be read down in such circumstances where the reason for the provision does not exist? 41 These are questions that have not been raised let alone fully explored in this matter. They are for another day. Nonetheless, the applicant's appeal must be allowed and the Tribunal's decision set aside.

(ii) The "No Evidence" Appeal 42 The question whether there is any evidence of a particular fact is a question of law: see Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 at [29]. Hence the issue raised by the applicant properly invokes the court's jurisdiction under s 44 of the Administrative Appeals Tribunal Act 1975. This said, in light of my earlier conclusion, it is not one that it is strictly necessary for me to answer. I refrain from doing so, other than to say it is not obvious how or why the Tribunal made the factual finding that the benefits paid Mrs Pantic from 23 November 1991 until 25 April 2004 were for "partial" incapacity. Conclusion 43 I will order that the appeal be allowed; that the decision of the Administrative Appeals Tribunal dated 23 May 2011 be set aside; and that the matter be remitted to the Tribunal to be heard and decided again. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.