COMCARE v RUSSELL EDWARD SMITH

CATCHWORDS Administrative Law - appeal from Administrative Appeals Tribunal - appeal on a question of law - Tribunal ordered extension of time to request a reconsideration of a decision to terminate compensation - request made 21 months out of time - whether Tribunal applied a correct test in considering the merits of the substantial claim for compensation - whether the Tribunal erred in failing to consider potential prejudice to the other party - whether failure constituted error of law - whether Court has power to re-exercise the discretion to extend time. Matter No. DG6 of 1996 COMCARE v RUSSELL EDWARD SMITH von Doussa J Darwin 5 March 1997

IN THE FEDERAL COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY No. DG6 of 1996 GENERAL DIVISION On appeal from the Administrative Appeals Tribunal constituted by Senior Member K L Beddoe BETWEEN: COMCAREApplicant AND: RUSSELL EDWARD SMITH Respondent MINUTES OF ORDER JUDGE MAKING ORDER : VON DOUSSA J WHERE MADE : DARWIN DATE ORDER MADE : 5 MARCH 1997 THE COURT ORDERS THAT:

1. The appeal be allowed.
2. The decision of the Administrative Appeals Tribunal dated 2 May 1996 be set aside.
3. The matters be returned to the Administrative Appeals Tribunal to be heard and determined again.
4. Question of costs reserved. Liberty to parties to apply on question of costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY DG6 of 1996 GENERAL DIVISION On Appeal from the Administrative Appeals Tribunal constituted by Senior Member K L Beddoe BETWEEN: COMCARE Applicant AND: RUSSELL EDWARD SMITH Respondent REASONS FOR JUDGMENT Coram: von Doussa J Place: Darwin Date: 5 March 1997 This is an appeal on questions of law brought pursuant to the provisions of s.44 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act"). By a determination dated 16 June 1992 the applicant ("Comcare") determined, with effect from 18 June 1992, that liability no longer existed to pay compensation to the respondent ("Mr Smith") in respect of an injury which occurred on 10 October 1989. By letter dated 20 April 1994 solicitors acting for Mr Smith applied to Comcare for a reconsideration of the determination dated 16 June 1992. The application for reconsideration included an application for an extension of time to make the request for reconsideration. On 19 December 1994 Comcare notified its refusal to extend time. Mr Smith applied to the Administrative Appeals Tribunal ("the Tribunal") for review of the decision refusing to extend time. The Tribunal on 2 May 1996 set aside the decision and ordered that the request for reconsideration by Mr Smith contained in his solicitor's letter of 20 April 1994 be treated as being within time. It is against that decision which the present appeal is brought. Section 62 of the Safety, Rehabilitation and Compensation Act 1988 provides for reconsideration of determinations made by a determining authority. A request for reconsideration shall set out the reasons for the request, and be given to the determining authority within 30 days after the day on which the determination first came to the notice of the person making the request, or within such further period (if any) as the determining authority, either before or after the expiration of that period, allows. In the present case the request for reconsideration and the application for an extension of time were made approximately 21 months after the 30 day period expired. The power to extend time given by s.62 is a discretionary one. The parties are agreed that in the exercise of that discretion the determining authority, and the Tribunal in its stead on review, should be guided by the principles discussed by Wilcox J in Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment (1984) 58 ALR 305 at 310-311. In support of this appeal it was submitted on behalf of Comcare that the Tribunal fell into error of law in its consideration of two of those principles, namely on the question whether Comcare would suffer any prejudice if time were extended, and on the assessment of the merits of Mr Smith's claimed entitlement to compensation. Relevant to the second of these matters Wilcox J in Hunter Valley Developments said (at p.311): "The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted..." At the hearing before the Tribunal both parties were represented by counsel. Many documents comprising Comcare's file were tendered in evidence including medical reports concerning Mr Smith which were written both before and after the decision of 16 June 1992 to terminate the payment of compensation. Affidavits were tendered from Mr Smith, from a Comcare officer Ms Ellis, and from Ms Day, who is a solicitor from the firm which commenced to act for Mr Smith in May 1993. These deponents gave evidence, as did Mr Schneider who is a solicitor with another firm who acted for Mr Smith for a time before Ms Day was instructed The material before the Tribunal established that on 18 October 1989 Mr Smith lodged a claim for compensation alleging that he suffered injury on 10 October 1989 in the course of his employment as a labourer with the Department of Defence in Darwin. He alleged that he had sustained back and rib injuries when he fell whilst alighting from a truck that he had been driving. The claim was accepted, and he received compensation payments until 18 June 1992. In the intervening period he saw a number of doctors including Dr Schmidt who prepared reports dated 22 January 1992 and 9 April 1992. The material part of the latter report read: "He suffers from mechanical lower back pain and mechanical lower back dysfunction. He has a pre-existing spondylolisthesis and degenerative arthrosis of the lower spine. Neither of these conditions were caused by the incident of 10th. October, 1989. I would assume that he had an aggravation of a pre-existing injury which by now should have settled. Mr. Smith has been unable to convince me that he has any significant residual disability. Giving him the benefit of the doubt I suggested he come back and see me for review after again working on his exercise programme. He has not subsequently returned for a visit. I would not employ this man doing any form of physical work. It would appear ongoing treatment is fruitless in this gentleman. It is my impression that this man is malingering to remain on compensation payments." A copy of this report was sent to Mr Smith who was asked to respond to the medical opinion. On 11 May 1992 Mr Smith contacted Comcare saying that he was not happy with the report and that he intended to provide supporting evidence from his own specialist, but that as he was living on Bathurst Island he was concerned that he might not be able to arrange the report in a short time. Thereafter Mr Smith had a number of telephone conversations with Comcare seeking payment of his airfares from Bathurst Island to the mainland, which Comcare refused to pay. In the course of these discussions Mr Smith was informed that a decision was about to be made to terminate his payments. He said that he would be requesting a reconsideration. As no medical report had been received from Mr Smith by 16 June 1992, Comcare proceeded to make the determination ceasing compensation on the basis of Dr Schmidt's report. The Tribunal held that the evidence before it quite conclusively established that Mr Smith was informed and well aware of the reasons as to why the decision terminating payment of compensation was made. On about 18 June 1992 Mr Smith came to Darwin at his own expense, and saw a Dr McMahon. However, shortly after his arrival in Darwin he was incarcerated for possessing and supplying cannabis on Bathurst Island, and was in goal from 25 June 1992 to 10 August 1992. It seems that Dr McMahon's report, if it were prepared, was mislaid. Mr Smith said he received no report. His treating general practitioner therefore referred him to another orthopaedic surgeon, Mr Mills, who prepared a report dated 8 December 1992. That report was sent directly to Comcare. Mr Smith said that he thought this was the way that he should go about getting a reconsideration of the decision to terminate his compensation entitlements. Mr Mills' report expressed the opinion that there was a likely long term lumber spondylolisthesis that had been exacerbated by the work injury in 1989. On 18 December 1992 solicitors, Waters James McCormack, wrote to Comcare saying that they acted for Mr Smith in relation to his claim for compensation, and requested copies of correspondence that had passed between Comcare and Mr Smith as Mr Smith had lost his copies. That request was complied with on 10 February 1993. The Tribunal held that Comcare's response to this correspondence indicated that it was aware that Mr Smith had not accepted the decision to terminate his compensation entitlement. In March 1993 Mr Smith made a complaint to the Ombudsman, who contacted Comcare. Comcare advised that a request for a reconsideration of the decision of 16 June 1992 was required before further consideration of the claim would be undertaken, and that advice was relayed by the Ombudsman to Mr Smith. Mr Smith referred the matter back to his solicitors but they did not seek a reconsideration. The Tribunal observed that whilst the file of Waters James McCormack was produced by Mr Schneider, who explained that the solicitor who had been handling the matter had now moved interstate, the file was not put into evidence. The Tribunal observed that no real explanation for the delay during the time that the file was with that firm of solicitors was forthcoming. After Mr Smith complained to the Ombudsman, he contacted the Darwin Community Legal Service and subsequently contacted Ms Day. He instructed Ms Day as to the history of his case and to apply for legal aid to investigate whether he had an ongoing entitlement. Ms Day took steps to obtain further medical evidence. Eventually a letter of merits was prepared and forwarded to the Northern Territory Legal Aid Commission in November 1993. A grant of legal aid was made on 1 December 1993 and Ms Day continued then with the preparation of Mr Smith's case. This preparation included further review by medical specialists. In March 1994 a further application was made to the Northern Territory Legal Aid Commission for an extension of grant of legal aid to cover the costs of seeking a reconsideration of the cessation of liability, and if necessary to institute proceedings in the Tribunal. During March and April 1994 Ms Day sought information from the Commonwealth Rehabilitation Service. It became clear that the information she sought would not be readily available, and on 20 April 1994 she wrote to Comcare requesting a reconsideration of Mr Smith's case. The Tribunal found that Ms Day lacked an understanding of the procedures under the Safety Rehabilitation and Compensation Act, Mr Smith's case being the first of the kind which she had handled. She had proceeded on the basis that she needed to prepare the material for reconsideration before actually seeking the reconsideration, and this accounted for her delay in making the request. Ms Day's letter to Comcare enclosed three new medical reports, one from Mr Mills dated 30 November 1993, one from Dr G Thompson dated 17 September 1993 and another from Dr I Yaksich dated 9 February 1994. Mr Mills repeated the opinion earlier given by him. Dr Thompson also diagnosed the condition of spondylolisthesis which he considered was longstanding, and concluded his report with the observation: "...we have a pre-existing condition which was symptom-free until the time of the accident, and (sic) aggravated this pre-existing condition producing continuous pain, which fluctuates in its intensity." Dr Yaksich had first seen Mr Smith on 8 February 1990 but had re-examined him for the purposes of the report on 2 February 1994. He agreed with the diagnosis of spondylolisthesis. He expressed his conclusions as follows: "I would regard his continuing disability as being related to the fall as he described as his pain has never settled completely in the intervening period. There was a pre existing condition of spondylolisthesis, but this was symptom free prior to the fall and it is likely that this would have continued to remain so in the absence of the injury at work." Subsequently Ms Day provided Comcare with a further medical report from a psychiatrist, Dr Robert Shoulder, dated 2 February 1994. He considered that Mr Smith was suffering a reactive depression, and concluded his report by saying: "There is no indication that he is other than truthful. His pain, deterioration and depression are consequent on his injury at work on 10/10/89." Mr Smith's affidavit in support of his application to the Tribunal, and his evidence in chief, outlined the course of events summarised above. He alleged continuing back pain and inability to work. He attributed his difficulties to the accident on 10 October 1989. To the various doctors he had consulted he had acknowledged a back injury at about the age of 14, but reported no other back trouble. A different picture however emerged from his cross-examination. His medical records had been subpoenaed by Comcare from the Darwin Hospital. These records indicated that he had consulted the hospital for back related symptoms on 25 June 1982, 30 March 1978, and 19 December 1977. He had also suffered injury to his sacrum as a result of being kicked on 19 November 1979, and had attended in respect of a shoulder injury on 13 March 1979. He had also suffered a serious knee injury on 29 September 1980 which had kept him away from work for upwards of 15 months. None of these injuries had been disclosed to any of the doctors that had examined him in respect of the subject compensation claim. The cross-examination also touched on the circumstances of the accident on 10 October 1989. In respect of that cross-examination the Tribunal observed: "In the course of the proceedings the applicant demonstrated the way he fell from the truck and that demonstration, quite frankly, raises concerns as to the credibility of the explanation offered. However, it is not necessary that I consider that matter further at this stage. The applicant's claim for compensation was accepted by the authorities and he continued to receive payments of compensation until 18 June 1992..." Dealing with Mr Smith's oral evidence about his injuries, the Tribunal said: "The effect of the applicant's oral evidence was to establish a long history of back problems in the L4/L5 region with spondylolisthesis being diagnosed on a number of occasions prior to 1989. The applicant was taken through his medical records held by the Royal Darwin Hospital and, although the applicant was less than frank in his answers, and preferred to avoid giving a responsive answer if he could, it seems clear enough from the responses that the applicant did give that he accepts that there was more than one occasion when he was admitted to hospital with back problems arising from accidents, football injuries, and other causes. I formed the impression that the applicant is an unreliable witness but at this stage I do not think that is in any way determinative of the matter which is before me." The Tribunal found that Comcare understood that Mr Smith was dissatisfied with the Determination of 16 June 1992, and was made well aware by him of the fact in June 1992, and by the correspondence from Waters James McCormack dated 18 December 1992. Mr Smith had indicated in June 1992 that he would seek a reconsideration, and the Tribunal held that the receipt of Mr Mills' report by Comcare in December 1992 led Comcare to understand that the applicant was seeking reconsideration, and that he had asked Mr Mills to report to Comcare for that reason. The reasons for setting aside the decision of Comcare to refuse an extension of time are contained in the concluding paragraphs of the reasons for decision which read: "18. There is now a considerable volume of medical reports which postdate 18 June 1992 and which, at least in some aspects, can be said to be supportive of the applicant's case. I do not propose, and do not consider it appropriate, that I give any detailed consideration of those medical reports for the purposes of the present application, because that is a matter for consideration by the delegate rather than for this Tribunal at this stage. It is, however, relevant to take into account whether the merits of the case are such as to justify the granting of an extension of time. I am satisfied on the material before me and in the circumstances of this case that there is material which establishes that the applicant has at least an arguable case that should go before a delegate.