Duncan, P.G. v. Defence Force Retirement & Death Benefits Authority & Anor [1980] FCA 72

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL GENERAL ADMINISTRATIVE DIVISION

BETWEEN : PETER GEORGE DUNCAN Applicant AND : DEFENCE FORCE RETIREMENT AND

DEATH BENEFITS AUTHORITY and COMMONWEALTH OF AUSTRALIA

ORDER t JUDGES MAKING ORDER : Brennan, Keely and Lockhart JJ. 1 DATE OF ORDER : 27 May 1980. WHERE MADE : Sydney. THE COURT ORDERS THAT :

1. The appeal be allowed.
2. It be declared that, for the purposes of regulation 4(4)

of the Defence Force Retirement and Death Benefits (Annual Rates of Pay) Regulations, the amount of the annual rate of salary of the applicant under the Defence Force (Salaries) Regulations on the days between 8 November 1977 and 16 July 1979 was the annual rate of salary payable to a Captain who had completed the longer period of service that is specified in the latter Regulations in relation to an officer holding

3. That the matter be remitted to the Administrative Appeals Tribunal to be heard and decided again, and that the Tribunal be directed: (a) to make such order as to the receipt of additional amounts by way of contribution under Part III of the Defence Force Retirement and Death Benefits Act as appears to it to be appropriate consistently with the liability of the applicant as declared by this Court; (b) to hear such further submissions, and summon such persons to give further evidence and to produce further documents, as it deems necessary to assist

4. The respondents pay to the applicant his costs of the

ON _ APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL, GENERAL ADMINISTRATIVE DIVISION

Peni eitee Loene Seen eases anniaientseD nae neniund= SOOO Tea oa

BETWEEN : PETER GEORGE DUNCAN Applicant AND : DEFENCE FORCE RETIREMENT AND

Pursuant to s.44 of the Administrative Appeals Tribunal Act 1975, the applicant appeals from a decision of the Administrative Appeals Tribunal "to affirm the decision of the Defence Force Retirement and Death Benefits Authority notified on 8 May 1978 and confirmed on 16 February 1979". The question which was before the Authority for consideration, and before the Tribunal on review, stems from the grant to the applicant, then a Commander in the Permanent Navy, of the

acting rank of Captain. From 8 November 1977 until 16 July

1979 when he was compulsorily retired, the applicant acted in

the rank of Captain. During that time he was paid salary and allowances at the annual rates fixed by the Defence Force

(Salaries) Regulations (the Salaries Regulations) in respect

The applicant was "an eligible member of the Defence Force" as that term is defined by the Defence Force

Retirement and Death Benefits Act 1973 (the DFRDB Act),and

he was therefore liable to pay fortnightly contributions to the Commonwealth in accordance with that Act (s.17).

Section 19(1) determined the quantum of the contribution,

" The amount of each fortnightly contribution to be paid by a contributing member is an amount equal to five and one-half per centum of the

fortnightly rate of pay applicable to the member on the day on which the contribution is payable."

The respondent Authority construed the complex of provisions, to which reference will presently be made, and came to the view that although the applicant was receiving a Captain's pay during the time relevant to these proceedings, he was liable to make contributions in amounts which would

have been appropriate to the rate of pay applicable to a

Commander, as that was the substantive rank which the applicant held at that time. Deductions were made from the applicant's fortnightly pay in accordance with the

Authority's view. The applicant contended, however, that

deductions should have been made in amounts appropriate to the rate of pay applicable to a Captain, and that he was liable to have a larger sum deducted from his

If the applicant's contention was correct, the payment of a larger contribution to the Commonwealth would not merely acquit him of his true statutory liability under ss.17 and 19(1): it would tangibly assert Captain Duncan's claim to a retirement benefit (to which he was shortly to become entitled under s.23) calculated on the basis of a Captain's pay. Section 23(2) provides that, in the circumstances in which the applicant retired, he was entitled to "an amount per annum that is equal to such percentage of the annual rate of pay applicable to him immediately before his retirement as, having regard to the number of complete years included in his total period of effective service, 1s ascertained under Schedule 1."

And so the liability to contribute and the entitlement to benefit were to be quantified by reference to "the rate of pay"(fortnightly or annual) applicable to him. The Authority formed one view as

to the applicable rate; the applicant formed another.

On 27 April 1978, the applicant wrote to the Authority to convey his view. The Authority considered the letter, but held to the construction of the relevant Act and Regulations which led to the making of the smaller deduction. Its view was notified

to the applicant by letter dated 8 May 1978. That letter contains the decision of the Authority which the Tribunal

I refer to your letter of 27 April 1978 concerning your contributions to the Defence Force Retirement and Death Benefits Scheme.

2. The question that you have raised concerning your rate of contribution does not take account of the definition of "annual

rate of pay" which is contained in Sub-section 3(1) of the DFRDB Act 1973. The definition

'Annual rate of pay' in relation to a member of the Defence Force on a particular day, means the amount, that, under the regulations, 1s the annual rate of pay applicable to the member on that day.

3, The Defence Force Retirement and Death Benefits (Annual Rates of Pay) Regulations (Statutory Rule 1973 No.188) prescribes the annual rate of pay for the purposes of the definition of "annual rate of pay" 1n sub-section 3(1) of the DFRDB Act 1973. In general, the annual rate of pay prescribed for a member holding a specified rank is the maximum annual rate prescribed under the Defence Force(Salaries) Regulations to which is added the amount of $950.00. In the case of some specified ranks the annual rate of pay is specified in a Schedule to the Regulations.

4. As the regulations are made under the Defence Force Retirement and Death Benefits Act 1973 the definition in that Act applies to the word "rank" used in the Regulations (i.e. substantive rank or provisional rank).

the provisions of the Act and Regulations in relation to your rate of contribution.

Authority to reconsider the matter. The Authority obtained

legal advice, and in accordance with the advice, it confirmed

its earlier view. It notified the applicant by letter dated

substance, the legal advice received was follows :-

acting rank is not included within the definition of 'rank' in sub-section 3(1) of the DFRDB Act 1973;

acting rank should be ignored for the purpose of determining the annual rate

of pay under the Defence Force Retirement and Death Benefits (Annual Rates of Pay) Regulations;

the rate of contribution required under sub-section 19(1) of the DFRDB Act should be based on substantive rank;

(d) retirement benefits payable under the Act should be based on substantive rank; and

(e) for the purposes of sub-paragraph 23(1)(a)(ii) of the DFRDB Act, the rank held by the member immediately before his retirement is the rank

as defined in sub-section 3(1) of the Act and does not include acting rank.

4, The Authority resolved that it should act in accordance with the legal advice and confirmed the decision conveyed to you in the letter dated 8 May

1978 that for the purposes of the DFRDB (Annual Rates of Pay) Regulations, the definition of 'rank' contained in sub-section 3(1) of the DFRDB Act 1973 applies and, therefore, contributions payable under sub-section 19(1}) of the Act are based on your substantive rank of Commander. "

The applicant applied to the Tribunal to review the Authority's decision. If the Authority's decision as notified in its letter of 8 May 1978 was a "decision" within the meaning of that term in s.99 of the DFRDB Act, the Tribunal had jurisdiction to review that decision, for it was a decision which the Authority reconsidered and the Tribunal has jurisdiction to review decisions that the Authority has reconsidered under the provisions of that section. By s.99(1) of the DFRDB Act, "decision" has the same meaning

as in the Administrative Appeals Tribunal Act 1975 (the AAT

Act), and 1t thus extends to giving or refusing to give a direction, approval, consent or permission, to making a declaration, or to doing or refusing to do any other act or

A question arises as to whether the formation and communication of its view by the Authority is a "decision" within the meaning of the definition in the AAT Act. The Authority did not alter rights, nor impose a liability.

The legal liability of the applicant to contribute under s.19 and his legal entitlement under s.23 were alike unaffected by the Authority's view: the Authority had no power judicially to decide these matters, nor to determine them in any final sense. Yet in practice, as we were told, the Authority's view 1s accepted by the Navy Pay Office which makes the deductions from pay 1n accordance with ss.17 and 19 of the DFRDB Act, and no doubt the Authority authorizes the making of payments under s.23 in accordance with its view of a particular member's entitlement. The Authority declared what was the measure of the applicant's liability to contribute, and although the declaration did not affect the applicant's true legal liability, it was nevertheless effective in practice to prevent the deduction of a larger contribution from Captain Duncan's pay. And the Authority refused its consent to the making of a larger contribution. What the Authority did thus falls within

one or more of the categories defined by s.3(3) of the AAT Act to constitute a "decision". Not all decisions within the meaning of s.3(3) of the AAT Act are reviewable

decisions. The AAT Act contemplates that, when other

enactments confer jurisdiction upon the Tribunal to

review particular classes of decisions, those decisions

will be "made in the exercise of powers conferred by the enactment" (s.25(1)). Assuming that this provision limits the classes of decisions reviewable under s.99 of the

DFRDB Act to decisions made by the Authority in the exercise of powers conferred upon it, it is necessary to find the power to make the administrative decision which the Tribunal was invited to review. The power is to be found in s.8(1) of the DFRDB Act, which confides to the Authority the

The Authority acted as it did in fulfilment of its function of administering the Act, and in the exercise of the powers conferred upon it in that behalf by s.8(1). The making and notifying of its decision as to the measure of the applicant's liability to contribute was a "decision" within the meaning of that term in the AAT Act, and it was reviewable by the Tribunal under s.99 of the DFRDB Act.

It was not contended that jurisdiction was not properly invoked to review the Authority's original decision, although the application to the Tribunal did not in terms

The Tribunal was constituted by three non-presidential members. The Senior Member (Mr. Edmunds) and Mr. Skermer decided that the Authority's decision should be affirmed; Mr. Hutchison dissented. When the appeal to this Court was instituted, an application that this Court be constituted as a Full Court for the purpose of hearing and determining the proceedings was granted although the proceedings are in the original jurisdiction

The appeal is limited to a question of law only (s.44(1)). The nature of the question appears from the recited correspondence, and it takes its origin from the definition of the term "rank" in s.3(1) of the DFRDB Act. That definition, which applies unless a contrary intention appears, defines "rank" in relation to a member of the Defence Force to mean -

"(Ca) his substantive rank or, if he is appointed provisionally or on probation, the rank to which he is

(b) if he is provisionally promoted to another rank - that other rank; "

The respondent contends that this definition is carried into

each of the statutory instruments to which reference must be

made to understand the meaning of s.19, and that, for the

purpose of applying each of those instruments the applicant must be regarded as holding his substantive rank, namely, the rank of Commander. We heard some argument as to whether the applicant had been appointed provisionally, or provisionally promoted, to the rank of Captain, but for reasons which will appear, it 1S unnecessary to resolve

The question of law raised on this appeal is to be answered by reference to certain provisions of the DFRDB Act, of the Defence Force Retirement and Death Benefits (Annual Rates of Pay) Regulations made under that Act (the Annual Rates of Pay Regulations), and of other Regulations to which the steps of the reader are directed in the journey

The first step in that journey is to ascertain what is meant by the use of the phrase "fortnightly rate of pay" in s.19(1) of the DIFRDB Act, for the amount of a member's contribution under that section is 54% of the fortnightly rate of pay applicable to the member. It is defined by s.3{1) of the DFRDB Act:

" 'fortnightly rate of pay', in relation to a member of the Defence Force on a particular day, means an amount calculated in accordance with the formula -

where A is the annual rate of pay applicable to him on that day; "

This definition uses the term "annual rate of pay". So

the next step is to discover what is the "annual rate of pay" applicable to the member, in order to quantify the factor "A" in the formula. The term "annual rate of pay" 1s

"in relation to a member of the Defence Force on a particular day...the amount, that, under the [Annual Rates of Pay] regulations, is the annual pay applicable to the member on that day." The annual rate of pay is therefore an amount that may, in relation to a member, vary from day to day. It varies according to the "annual pay" applicable to the member under the Annual Rates of Pay Regulations. It may be observed, at this point of the journey, and before entering the thicket of regulations, that there has been no need to refer to the definition of "rank" in s.3(1), because "rank" has not been

used by the legislature in defining either fortnightly rate

The next step is to the Annual Rates of Pay Regulations, regs. 3 and 4 of which are each expressed to apply "for the purposes of the definition of 'annual rate of pay' in sub-section 3(1) of the Act." (regs.3(1) and 4(1)). Regulation 3 contains nothing of present relevance.

reasoning which led the majority of the Tribunal, and the Authority, to their respective decisions. That was, if we may respectfully say so, a wrong legal turn on the journey of interpretation suggested by some confusing signposts

contained in reg.4(3) and (5) to which ve shall later return.

For the moment, it is sufficient to observe that the Annual Rates of Pay Regulations refer to the Salaries Regulations merely to ascertain the amount of the member's annual rate of salary under the Salaries Regulations. Quantification is the function of the regulations referred to, not of the regulations which contain the reference. It is not permissible to alter what would otherwise be the operation of the Salaries Regulations in fixing a member's annual rate of salary by construing the Salaries Regulations as though "rank" in those regulations bore the same meaning

Hitherto, the expression "rank" has not been found along the path of interpretation, but it is to be found in the Salaries Regulations and its meaning affects the operation of those Regulations. Those Regulations, made under the Defence Act and the Naval Defence Act, operate independently of the DFRDB Act and regulations made under the DFRDB Act. Regulation 5 of the Salaries Regulations

" Subject to sub-regulations (5),(6),(7), (8) and (9), the annual pay applicable to a member of the Defence Force on a particular day is the amount ascertained by adding $950 to an amount equal to the amount of the annual rate of salary of the member under the Defence Force (Salaries )Regulations on that day."

Now the present case does not fall within any of the sub-regs.(5) (6) (7) (8) or (9) of reg.4, and the annual pay applicable to the applicant on a particular day was therefore $950 more than "the amount of the annual rate of salary", an amount which is to be ascertained by reference to the Salaries Regulations. The reader is referred to the Salaries Regulations in order to ascertain an amount which those Regulations specify. However, the Salaries Regulations are merely referred to for that purpose: they are not incorporated into the Annual Rates of Pay Regulations. If they had been incorporated, it would have been necessary to read the provisions of both sets of regulations as though they were contained in the

one statutory instrument (Cadbury-Fry-Pascall Pty.Ltd. v. Federal Commissioner of Taxation (1944) 70 C.L.R.362 at

p.389), and it may have been arguable that "rank" in the incorporated regulations bore the same meaning as it bears

in the Annual Rates of Pay Regulations (see The Producers'

Co-operative Distributing Society Ltd. v. Commissioner of

Taxation (N.S.W.) (1944) 69 C.L.R.523 at p.531; Commissioner

for Government Transport v. Deacon (1957) 97 C.L.R.535 at pp.543,546). Indeed, that appears to have been the

substantive or acting) or of a rank lower than Captain

The second confusing signpost is in reg.4(3) which reads:

" Where, under the Defence Force (Salaries) Regulations, different annual rates of salary for a member holding a specified rank are prescribed according to the number of years of service that a member holding that rank has completed, the annual rate of salary under those Regulations of a member who holds that rank shall, for the purposes of sub-regulation (4), be deemed to be the annual rate of salary payable to a member who has completed the longer or longest period of service that is specified in those

Regulations in relation to a member holding that rank, "

Now here is a provision in regulations made wnder the DFRDB Act which uses the term "rank", and uses the term for the purpose of modifying the effect of the reference in reg.4(4) to the Salaries Regulations. Regulation 4(3) takes the "annual rate of salary payable to a member who has completed the longer or longest period of service" which the Salaries Regulations specify in relation to a member holding a particular rank, and, for the purposes of reg.4(4), deem that amount to be the annual rate of salary under the Salaries Regulations for any member holding that rank. Clearly enough, reg.4(3) is a machinery provision to assist reg.4(4) in arriving at the

"annual rate of salary of the member" under the Salaries

retire while his s.20 election governed his contribution);

or he may obtain a refund of the excess of past contributions over the amount of his present liability to contribute. This provision sits comfortably with the construction above accorded to the DFRDB Act and the several sets of

We return to the confusing signposts in the Annual Rates of Pay Regulations. If reg.4(4) requires a member's annual rate of salary to be ascertained by the criterion of the rate applicable to the officer's acting rank, it deals with the annual pay of officers falling within its terms in away which appears to be different from the way in which reg.4(5) deals with the annual pay of officers who fall within its provisions. Annual pay of officers wnder reg.4(5) is ascertained by reference to Schedule 2 of the Annual Rates of Pay Regulations, and it may be that the "ranks" specified in Schedule 2 (Commodore and more senior ranks) are substantive ranks only, in accordance with the definition of "rank" in the DFRDB Act. If this be so (and it is not necessary to decide the point), there is yet no difficulty in construction: the annual pay of an acting Commodore would not be ascertained under reg.4(5) but under reg.4(4); the

annual pay of officers holding the substantive rank of

Commodore or higher would fall exclusively under reg.4(5);

and the annual pay of officers of the rank of Captain (whether

contribution. The Authority, in making its calculations, used the annual rate of salary appropriate to a Commander under the Salaries Regulations because it was of the opinion, expressed in paragraph 4 of its letter of 8 May 1978, that "as the regulations are made under the DFRDB Act, the definition in that Act applies to the word ''rank' used in the Regulations." The fallacy in this approach is that, in the Annual Rates of Pay Regulations, which are made under the DFRDB Act, the word "rank" is not used; whereas it is used in the Salaries Regulations which are made under other Acts. In the relevant sets of Regulations made under other Acts, the expression "rank" is given a

It was submitted that s.20 of the DFRDB Act exhibited a legislative intention which is inconsistent with the construction above set out, but the submission is not supported by the terms of s.20. If a member, holding acting rank, is liable to contribute and contributes a larger sum than he would have been liable to contribute if he had not been granted the acting rank, and he reverts to his substantive rank and 1s liable to contribute a lesser amount, s.20 gives him an election: he may continue to contribute as though his annual rate of pay had not changed (in which event his entitlement under s.23 would

be calculable on the same annual rate of pay if he should

into which they are divided." By virtue of reg.4(3) of the Salaries Regulations, the expression "ranks" in reg.5 has the same meaning as that expression has in the relevant Service Financial Regulations - in this case, the Naval Financial Regulations. The regulation evinces a clear intention as to the meaning which the term is to bear in the Salaries Regulations. By reg.4(1) of the Naval Financial Regulations, "rank" includes "acting rank". These Regulations were not made under the DFRDB Act and accordingly there is no room for the operation of s.46 of the Acts Interpretation Act 1901. Thus the annual rate of salary of the applicant, fixed by the Salaries Regulations, is fixed according to his acting rank, namely, the rank of Captain, His annual rate of salary, being the rate appropriate to a Captain, was the rate specified from time to time in schedule 2 (reg.7(b) of the Salaries Regulations). And that is almost the end of the journey. From schedule 2, the annual rate of salary is ascertained; by adding $950 to that amount, the applicant's annual pay is ascertained; that sum 1s then the annual rate of pay and fourteen 365ths of that sum is the fortnightly rate of pay to be brought into the calculation under s.19 of the DFRDB Act. The calculation

under that section yields the amount of the fortnightly

Regulations, Regulation 4(3), operating for the purposes

of reg.4(4), has effect only when the member's rank is

found to entitle him, under the Salaries Regulations, to incremental levels of annual salary; and reg.4(3) then deems

him to be entitied to the highest incremental level for that

rank. Regulation 4(3) does not alter the criterion of

entitlement under the Salaries Regulations, namely, the

criterion of rank (which may be acting rank). Regulation 4(4)
is not concerned with the criterion which the Salaries

Regulations adopt to determine entitlement to a particular

level of annual salary; it is concerned merely with the

annual rate of salary to which a member is entitled. As

reg.4(3) is ancillary to reg.4(4), 1t must be read in a way ' which is consistent with the Salaries Regulations: that is,

it must be read as though the reference in reg.4(3)to rank

held by a member is a reference to the rank which confers entitlement under the Salaries Regulations (including

It follows that the Tribunal's decision must be set aside. This Court should declare that, for the purposes of reg.4(4) of the Defence Force Retirement and Death Benefits (Annual Rates of Pay) Regulations, the amount of the annual rate of salary of the applicant under the ' Defence Force (Salaries) Regulations on the days between

8 November 1977 and 16 July 1979 was the annual rate of

salary payable to a Captain who had completed the longer period of service that is specified in the latter Regulations :

Now that the applicant has retired, the administration of the DFRDB Act may make it desirable that some adjustments be made in respect of contributions under s.17 and retirement pay under s.23 conformably with the declaration made. The order to give effect to the declaration can best be framed by the Tribunal, and the case should be

remitted to the Tribunal accordingly pursuant to s.44(5) of the

Administrative Appeals Tribunal Act. It may be that the

parties can agree the form of order which the Tribunal should make, but we would give the following directions in the

1. The Tribunal make such order as to the receipt of additional amounts by way of contribution under Part III of the DFRDB Act as appears to it to be appropriate consistently with the liability of the applicant as declared by this

2. The Tribunal hear such further submissions, and summon such persons to give further evidence and to produce further documents, as it deems necessary to assist it to determine what order

Workmen's Compensation Ordinance 1951 - Payments of compensation on basis of total incapacity made voluntarily - Cessation of such payments without agreement or arbitration - Effect of paragraph 12

worker for arrears of payments and for award on basis of continuing total incapacity or alternatively partial incapacity - Whether onus of proof as to continuance of total incapacity on employer or worker - Whether

Antonio Barbaro v. Leighton Contractors Pty. Limited

ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Respondent ORDER Judges Making Order: Smithers, Connor and Franki JJ. Date of Order: 27 May 1980 Where Made: Canberra THE COURT ORDERS THAT: 4. The appeal to this Court is dismissed.

Smithers J.: Section 7(1) of the Werkmen's Compensation Ordinance

1951 (as amended) (the Ordinance} provides that:- - "If personal injury by accident arising out of or in the course of his employment by his employer 1s caused to a workman, his employer shall, subject to the Ordinance, be liable to pay compensation in

accordance with the First Schedule to ths Ordinance."

On 22 September 1975 the appellant suffered injury arising out of or in the course of his employment with the respondent. Immediately after the appellant was injured the respondent commenced weekly payments to him of an amount equal to the weekly payment payable pursuant to para.(1)(b) of the first Schedule. It 1s conceded that the original payment and indeed all payments thereafter were made on the basis that ungury vas suffered by the appellant and that at least for some substantial period after sustaining his injury he was thereby totally incapacatated for work. Weekly payments were made until a date in March 1977. From that stage the respondent made no

However, 1t 1s provided by para.12 of the First Schedule, so far as material, that "Aweekly payment ... payable under this Ordinance may be varied or ended by agreement or by arbi- tration under this Ordinance". It would appear that the effect of para.12 of the Schedule is that once weekly payments "payable

under" the Ordinance have been made not only may such payments

be varied or ended by agreement or by arbitration but the same may not be ended or varied otherwise, The consequence of

this 1s 1n my view, for reasons disclosed below, that where the weekly payments have been made on the basis of total ancapacity the relationship between the employer and the workman 1s in substance the same as would exist if there were an avard on

the basis of total incapacity 1n favour of the workman.

As was pointed out by Northrop J. in Thiess Bros. Pty. Ltd. v. Carbone and Anor (1976) 15 A.C.T.R. 15 the appropriate procedure to be adopted by an employer desiring relief from payment of weekly payments which he has paid, even voluntarily, 1s to apply for such relief by an application pursuant to rule 7 of the

Workmans Compensation Rules using Form No. 5 provided in

In this case,the employer having ceased to make the weekly payments but not having taken any legal proceeding seeking to have tle same ended or varied by agreement or arbitration, the appellant on 20 May 1977 commenced proceedings under the ordinance seeking an arbitration "with respect to the compensation payable to him",

The terms of the application showed that questions had arisen:-

"(a) As to whether the said Applicant 1s a workman whom the abovementioned Ordinance applies;

(b) As to the liabality of the said Respondent to pay weekly compensation under the abovementioned Ordinance in respect of the injury.

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

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

Paragraph 3 of the application stated, "An arbitration under the abovementioned Ordanance 1s requested between the said Applicant and the said Respondent for the settlement of the said questions", Under the heading, "Particulars of incapacity for work, whether total or partial and estimated duration of

incapacity" the information supplied was "total and permanent."

Notwithstanding the absence of a separate initiatory proceeding on the part of the respondent seeking to have the weekly payments which had been paid varied or ended in accordance with para. 12 of the First Schedule, the terms of the applicant's application were comprehensive enough to permit and indeed require an adjudication on the issue as to whether such weekly payments should be varied or ended, But although that is so, 1t was necessary that it be recognised that the appellant should have full advantage of the situation arising from the payment of the weekly payments, namely that until it appeared that the veekly payments ought to be varied or ended the respondent's liability to continue to pay the same persistéd. Unfortunately para. 12 of the First Schedule appears to have been overlooked by all parties and not brought to the notice of the learned

It is apparent that as a matter of evidence the appellant's case rested in the first instance on the fact that weekly payments had

been made, Had the matter stopped there the case for an award on the

basis of total ancapacity would have been complete, Whether

or not this would have been so in the absence of para.12 of the First Schedule it is clear that in the presence of para.12 and in the absence of evidence that the appellant was no longer totally incapacitated for work the appellant would have been entitied to an award, But more did occur, namely evidence was given going to the question of the existence and extent of the appellant's incapacity on the basis of which it was contended by the appellant and contested by the respondent that there should be an award for the appellant, Issues were raised with respect to which the Magistrate stated

"for practical purposes the issue before me is whether the

applicant has any and if so what incapacity for work since March 1977".

The learned Magistrate approached this issue on the basis that the onus of proof of the existence and extent of incapacity for work was on the appellant. It 1s said by the appellant that in this he was in error. The decisions of the High Court, in particular

J.H,. Timbers Pty. Ltd. v. Nelson (1971-72) 126 C.L.R. at 625,were

relied upon, The Magistrate correctly accepted the view that for the purpose of entitlement to workman's compensation it was necessary that there be not only physical incapacity but also economic incapacity supervening thereon. Because para. 12 of the First Schedule was overlooked he took the view that the appellant carried the onus of

proof of both elements of incapacity. The Magistrate's finding was

that although the appellant demonstrated a continuing physical incapacity he had not demonstrated to his satisfaction that economic loss had supervened, The result was that he made an award in favour of

On appeal it is put by the appellant that because of the operation of para.12 he was entitled to an award unless the respondent satisfied the learned Magistrate that the total incapacityby reference to which the weekly payments had been made had ceased. This is a sound view, But because of the error which had crept into the proceedings in that para.12 was overlooked the Magistrate did not address himself to the question as to whether or not he was affirmatively satisfied that the incapacity by reference to which the weekly payments had been made had ceased. And if the appellant relied on the situation arising out of the weekly payments having been made, it was necessary that the Magistrate should have directed his mand to the question whether on the evidence he was satisfied that the total incapacity by reference to which those weekly payments had been made had ceased. If such a finding had been made the question would have arisen as to whether there was any,and to what extent, economic loss supervening upon physical incapacity to support the making of an award on the basis of partial incapacity under para.

1(c) of the First Schedule. The result was that the prima facie ! case entitling the appellant to an award securing to him the con~ tinuance of weekly payments was ignored and the case upon which the respondent might have contested the making of such an award was not dealt with.

It is fundamental to the issues raised in the proceedings, that the entitlement 1f any of the appellant depended upon the provisions of s.7 of the Ordinance to the effect that in the case of compensible persanal injury the liability of the employer is to pay compensation in accordance with the First Schedule to the ordinance,

The First Schedule is headed "Scale and Conditions of

(a) where the death of the workman results_ from the injury - ... fa sum specified/;

(b) where the workman is totally incapacitated for work by the ingury - a weekly payment ' during his incapacity of ... /sums specified according to circumstances/ ...; and (c) where the workman is partially incapacitated for vark by the ingury ~ a weekly payment during his incapacity ... /sums specified according ta circumstances/ ...". It appears to me that in the proceedings before the

(a) whether pursuant to para.12 of the First Schedule there vas in respect of the period between March 1977 and 20 May 1977, any liability in the respondent to pay compensation on the basis either of total or partial liability;

(b) whether as at and from 20 May 1977 there was a liability in the respondent to pay compensation in

accordance with para. (1)(b) of the Farst Schedule; and,

if the answer to issue number two be in the negative,

whether as at and from 20 May 1977 there was a liability in the respondent to pay compensation in accordance

In proceedings for compensation where weekly payments have not theretofore been made and there is no previous award the vorkman would bear the onus of proof of ingury, of that

ingury having arisen out of or an the course of his employment,

and of the extent to which the saleability of his labour in the market was reduced by his ingury. But in relation to the appellant's application of 20 May 1977 for an avard of compensation the situation was different because weekly payments on the basis of total incapacity had been made by the respondent to the appellant for

some eighteen months. The respondent had ceased to make such payments as from March 1977 without any agreement or sanction pursuant to para.12 of the First Schedule. This was contrary to

law. The respondent could not gain any benefit from this breach

of the law. Accordingly in respect of issues (a) and (b) above

the result is that in the proceedings of 20 May 1977 the applicant was entitled to an avard for weekly payments on the basis of

total incapacity unless 1t were established,not that there was no

continuing incapacity for work, but that total incapacity had ceased.

On issue (c) above, if it arose, the onus of proof was on the appellant to satisfy the Court that he was partially incapacitated for work to some particular degree within the meaning

Once the weekly payments had been proved there was no further onus of proof on the appellant until it was established

It 18 convenient to notice, at this stage, that the touchstone of incapacity for work for the purpose of paragraphs 41(b) and 1(c) of the First Schedule is not merely the continuance of physical effects of the injury originally suffered but the non-saleability or reduced saleability of the workman's labour by reason of those continuing effects in a market for his labour

It 1s apparent from the learned Magistrate's reasons for has decision that he was not satisfied that, with respect to any material time, the appellant was totally incapacitated for work. But by reason of the payments of compensation on the basis of total ancapacity the appellant was entitled to an award continuing such payments unless the respondent satisfied the Court that total incapacity had ceased. It 1s not apparent from the reasons of the learned Magistrate what his finding would have been if he had asked himself whether he was satisfied on the evidence that the appellant was not totally incapacitated for work with respect to

Because of the course taken by the parties in the proceedings the Magistrate did rot ask himself this question. He did not realise that it was an essential question. His view was that it was for the appellant to satisfy him that he was totally incapacitated for work or partially incapacitated and to what extent. He was not satisfied on either counts, but that does not mean that the Magistrate would have made the finding that total incapacity did not exist as from March 1977 or from 20 May 1977 1f he had addressed himself to the task of considering whether such a finding was appropriate on the evidence. All that the Magistrate was satisfied about was that some physical effects of the original injury persisted. He was not satisfied, however, that partial ancapacity for work in the relevant sense, existed as and from May 1977. But this question would never have arisen unless it had been established by the

respondent that total incapacity in the relevant sense did not exist.

It 1s necessary therefore to consider whether, on the

evidence, a finding should have been made that,with respect to

the period from 17 March 1977 to 20 May 1977, the appellant

On 22 September 1975 the appellant was 31 years of age. He was a native of Italy. He purports to have little or no skill in the English language and to be unable to read or write in his own language. He came to Australia in 1964 and worked as a contractor until some time in 1974 when he suffered a gall bladder anfection, Having lost work because of his illness he decided to abandon contracting and work for wages. He said that by the date of the accident in which he sustained his injuries he was able to perform heavy labouring work. He had then been working for the respondent for about seven months. He stated that since the accident of 22 September 1975 he had been unable to lift heavy items or bend down. He also stated that he suffers persistent pain in his back, and has painful episodes of a fey days duration two or three times a month. He said that he can no longer perform beavy labouring work and that he has done no work since

September 1975. He would like to work but is not able to.

At the time of the accident the appellant lived with his wife and four children at Narrabundah in a house owned by him. Before the accident he had purchased a block of land in the suburb of Spence in the A.C.T. where he intended to build another family home. It was not that this existing home was too much to manage. It was that he wanted to build a new

house. He said that during 1975 and 1976, but after his accident,he did erect a family home of 25 squares on that

The builder employed in connection with the erection of the new house was one Nino Raza. There was no contract with Raza, He did not give evidence. The new house is valued by the appellant at some $100,000,although he said that an ansurance company,asked to lend money on the security of the house, valued it at $80,000. The appellant said that he did no work in the building of the house , that 1t was built by Raza assisted by the appellant's relatives. The appellant said that to finance the building at Spence he borrowed money from a fanance company and a bank and obtained loans from friends and relatives. He said that since the respondent ceased to make weekly payments he had had no income and existed on money lent to him by both friends and relatives.According to the appellant he owed at November 1977, a total of $69,000, $48,000 on mortgages and $21,000 to relatives and friends for money borroved from them. None of the lenders gave evidence and there was no evidence of the terms of the loans or the circumstances in which they were made. It was from these loans that he fed and clothed and generally maintained himself and his family, Included 1n his expenditure was the cost of a new Holden motor car which he acquired on hire purchase because his previous car was "no good". In respect of the mortgages on his house and the hire purchase agreement concerning his car the monthly commitments of the appellant as at November 1977 were

During the period between the accident in September 1975 and November 1977 he had borrowed an additional $15,000 to invest in a toy Joinery business in a partnership or company with a brother and two other persons. According to the appellant the returns from this business were insufficient to produce any income for him and after about seven months he withdrew, receiving back his 415,000 in full. The terms of the $15,000 loan do not appear ain the evidence. During the same period he took the part of a guarantor in relation to a loan of approximately $15,000 obtained by his Brother Rocco Barbaro from a finance company. This loan was to enable Rocco to become a partner in the Little Joinery business. Rocco worked in that business for a time and was paid for doing so. The appellant said that he did not work at the joinery but went out "a couple of times to the office". According to the appellant it was gust to see

The appellant's wife worked at the goinery for a short period and was pazd $100 per week. In connection with obtaining loans from banks and finance companies the appellant made statements which he now says were untrue. He said he told these untruths because otherwise he could not have obtained finance for his house and for go1ng into the jo1nery business and would not have been able to obtain finance for the new car and

would have had to sell his new house, The substance of

1. that the joinery business was going quite well;
2. that as at Ifay 1977 he was receiving an income

of $650 per month; 3. that he was in receipt of a substantial sum, possibly $200 per week from the Tattle Joinery; 4, that he was working; and

5. that he was self employed in the Iittle Joinery.

The appellant said that since his accident he had not attempted to obtain any work. He said he had told the Insurance Company that he would take light work if the company found 1t for him, As to whether he could do laght work he said that it depends, sometimes he feels well and sometimes he does not. He said that he did not look for work because he did not feel well and he did not know where to go about finding a job with light duties. He had not registered with the Common- vealth Employment Service; nor had he looked at newspaper advertisements. He had not thought of getting a part time gob or getting a gob at all. It 1s apparent that he has never applied for unemployment relief. He said that he has done no work in his garden since his accident and did no work in the building of the house at Spence. There was evidence from two neighbours at Narrabundah that from January 1976 until the appellant went to lave at Spence they had never seen the appellant work in the garden. They said that he was not crippled but walked with a slow easy walk. There

was evidence of a neighbour at Spence that he had never seen

the appellant work in the garden or otherwise around his house and that he never saw the appellant do any work in the building

The appellant's wife gave evidence that the appellant is not able to do anything, is not able to work, is not allowed to lift heavy things and is not able to go into the garden, She said that since September 1975 the appellant sometimes gets up, walks around a while and then goes back to bed. He sleeps in a normal bed. She did not

mention that he wears a surgical neck collar at night,

Beyond those matters Mrs. Barbaro was rather vague. She said that all business matters were attended to by the appellant. Although she went with him on business occasions to help with his language problem she could not remember what had been said to the finance company or banks. Although she had made quite large payments to the bank, once as much as $13,000, she was unable to remember the circumstances or where that money came from, She explained "Tony handles all the papers.

One Gerardo Barillaro,a partner in the joinery business,confirmed that Rocco Barbero and the appellant paid $30,000 as part of an anticipated $58,000 to purchase shares 1n the business, but after a little while they decided to leave because there was not enough profit. He said that although the appellant came to the business on a few occasions

Medical Evidence Relatave to Capacity for Work Physical or Other

So far as the medical evidence is concerned several doctors gave evidence viva voce or in writing. The doctor most favourable to the appellant was Dr. Newcombe. He first examined the appellant on 24 September 1977. He prescribed a collar to support the appellant's neck and advised that he sleep on a hard bed. Dr. Newcombe's opinion was that some permanent partial incapacity would appear to be inevitable be- cause it would be inadvisable for him to return to heavy labouring duties. He accepted that the appellant suffered exacerbations of pain of between one and three weeks duration every three or four weeks. He appears to be of the opinion that the appellant had a condition of disc protrusion at the 4/5 lumber spine level. If that condition were confirmed by myelogram then an operation should be performed. Presumably this would relieve the appellant's symptoms.

Dr. Newcombe attached significance to a neck and shoulder injury although he did not regard it as a major element in the injury. There were no X-ray records relating to the shoulder. The appellant had no recollection of ingury to his shoulder or neck in the accident and apparently first mentioned it to

a doctor on 19 November 1975. Dr. Newcombe conceded that although there were objective signs of injury his opinion rested basically on the appellant having been truthful to him

It was the view of Dr. Golski who examined the appellant on a number of occasions between September and November 1976 that there was some ingury to the appellant's left shoulder and some evidence of disc deterioration at L5 and S1. Under

his direction the appellant underwent physiotherapy but found

no change in his condition as a result thereof. Dr. Golski's conclusion was that "the situation should be accepted and the

appellant should just avoid performing any heavy work",

Dr. Stenning on 6 October 1977 observed some slight narrowing of the L4/5 disc. He described the appellant's back as "powerful, stocky build with posture good",

He found forward bending restricted so that outstretched fingers reach just below the knees. Other movements were not restricted but all are associated with low central back

Dr. Cairns attended the appellant from November 1975 until June 1976. It was his opinion that the appellant had suffered a minor injury to his lumbo sacral spine and that he had at least a minimal organic basis for his continued complaints. He believed that there was a significant degree ofpsychological magnification of the appellant's symptoms and he doubted the accuracy of the appellant's

symptoms. It was his final conclusion when he said: -

"T refer to all these findings simply to support my present opinion that the significant component in this man's continuing inability to return to work is largely psychogenic. All reasonable forms of conservative management have been tried, and at this point the only alternative treatment which can be offered to this man in my opinion is surgical, if his symptoms are in fact legitimately based upon an organic problem. However I cannot satisfy myself that this is in fact so and I do not believe therefore that he is a candidate for any form of spinal surgery.

I have therefore informed Mr. Barbaro that I can offer him nothing further in the form of management of his back pain and that my advice to him is to return to work

It vould seem therefore on the whole of the evidence as to the appellant's physical capacity for work the proper inference 1s that he 1s capable of work in any occupation which does not involve heavy lifting and repetitive bending. Accordingly there is a range of occupations which are suitable for the appellant's capacity. It is always difficult to specify such occupations, but vehicle driver, watchman, ticket collector, gate keeper, supervisor of workers in an establishment such as the Tittle Joinery or any factory andin modern industry

there are sedentary occupations where watching processes are

However in the case of the appellant there are difficulties. His lack of knowledge in English 1s a serious handicap and greatly reduces the range of establishments in which he can expect to obtain work, In the search for light work he is likely to meet much competition and other applicants may be persons with no physical disabilities, On the other hand his nationality may assist him to find work in the Italian community. Obviously he has business iniliative, is not without business acumen and it is far from clear that he would be rendered unable to earn money by being excluded from heavy labouring vork.

It is relevant that the applicant has made no attempt to find

light work andhad hardly given a vhought to doing so. It is

apparent that the appellant is not really interested in employment on light duties. The question is why this 1s so. The answer could be that the appellant 1s more anterested in engaging 1n

The Magistrate observed that the appellant had received substantial sums of money and had given an unsatis- - factory explanation in respect thereof. He found that the applicant was a person who would tell lies in order to achieve his own ends. This was manifestly so on the appellant's own statements. His credibility 1s thus inevitably very

According to the appellant, notwithstanding his accident, and shortly thereafter, while he was suffering its effects and under medical treatment which was not showing signs of bringing relief, he decided to erect the new house. He was then receiving weekly payments on the basis of total incapacity.

The contemplated house was quite large and the project involved borrowing a large sum of money. Although he had an unspecified

sum of money, possibly about $5000 it would be clear to the

appellant that he would necessarily incur heavy interest

payments and probably recurring payments on account of capital.

He arranged for both bridging and long term finance, The

sum borrowed could not be less than $40,000 which at interest

rates common and notorious in 1975 and 1976 would involve payments of $80 per week at least. Hiswage as an employee of the respondent had hewn babween 120 and $140 per week nett, On the appellant's evidence from September 1975 the appellant knew that he covld not work, and, with increasing certainty thereafter, he must have realised that his chances of earning money by working were minimal. To keep

himself and his four children on workman's compensation was 4 daunting prospect but to add to it another $80 per week would

create a serious situation. And it was not that the house at

Narrabundah was shown to have been too small or too difficult

to manage, merely that the appellant wanted to build the new

house. Not only did the appellant decide to build the new house

but also to buy a new car. This he did about May 1976. The

price 1s not disclosed but finance therefor involved repayments

at the rate of $119 per month, In addition to the above the appellant borroved $15,000 from a finance company to go into the Tattle Joinery project. These transactions were quite

large for a man with a wife and four children on compensation

with a disabling back condition, and no prospects of being able

to work, It is said that to help him with his financial

obligations he received loans from relatives and friends.

By March 1977 his monthly commitments were said to be $395 for

loans on the house and $119 with respect to the car ~

By that stage the appellant, according to his evidence, had been disabled for eighteen months and there was no sign of improvement. According to the appellant some short time before March 1977 he had commenced to borrow money from his relatives and friends and between about the beginning of 1977 and November 1977 he borrowed $21,000. From early in 1976 the appellant was faced with payments out of about $500 per month and he had to keep a family of s1x on workman's compensation and no prospects of any more. And yet throughout 1976 and until November 1977, he never gave thought to obtaining light work. From March to November, when he had no income at all, he did not register for light work or attempt to obtain unemployment

or sickness relief. It seems that the house at Narrabundah was sold in January or February 1977. When he actually moved

It was apparently throughout 1977 that he was paid large sums of money by relatives and friends, namely $5000 by Rocco Andessa, $5000 from Antonio Pangello, $5000 from Carlo Pachiki and $3000 from Domenico Romeo who were apparently friends. Throughout 1977 until at the earliest about October 1977, 1t was the apparent intention of the appellant to continue to live in the new house and pay for it. During that time his hope of returning to work must have seemed

The reality of the situation must have been clear to the appellant in 1976. At that stage he still had the

Narrabundah house and could have returned there, sold the new

house, and satisfactorily resolved his ranancial problems.

He did not do that but in 1976 borrowed $15,000 himself and guaranteed a further $15,000 loan for his brother and took

on additional liabilities in respect of a new car. The purpose of the new car was said to be to go to the doctor and other unspecified journeys. But in the appellant's difficult

situation that expenditure seems to have been an extravagance, especially as Mrs. Barbero said that his normal day was to get up move around the house for a couple of hours and then return to bed. Butthe one thing the neighbours did see the appellant

It may well be that Italian families and friends are generous to their relatives and friends who need money. But if at the time the money was lent it was the intention of the appellant to continue to live in the house then there was no prospect of them ever being repaid, except perhaps out of some workers compensation settlement. In this latter event the appellant would have his large house and car but no income and no chance of any income. The appellant repudiated or at any rate put aside the notion that he hoped to repay them out of some redemption of vorkers compensation. Asked if he intended to sell the new house andif so, when, he said Nag soon as anyone comes along to buy 1%", It was not until about a month before the hearing of the Workers Compensation case that, according to himself, he put the new house in the hands of an agent for sale. No particulars of price were

suggested as having been discussed or arranged, and the appellant

vas unable to remember the name of the agent. When pressed he identified him as the agent who sold the Narrabundah

It is relevant that whatever the appellant's educational limits he was quite a successful business man. After being in Australia for 11 years he had accumulated a house at Narrabundah, a block of land at Spence suitable for a large and expensive house, an interest worth {7000 1n land at Gunning, a car and some thousands of dollars in the bank. He had done this not by working for companies like Leightons, but by contracting on his own account. It was he who arranged for the loans and the joint investment supported by loans and a guarantee for the Little Joinery venture. It was he who controlled all the signing by himself and his wife and the payments in resect of the mortgages. It was he who had the initiative and the determination to tell lies, if they were lies, that he was working, and about the receipt of ancome, in order to raise the bank and finance company loans. To read the evidence is to confirm the Magistrate's finding that the appellant's evidence is unsatisfactory. He did not satisfy the Magistrate that he was not gaining from employment or business what may be called

If he had addressed himself to the question whether On the evidence he should make a finding that by May 1977

the appellant had ceased to be totally incapacitated for work

1t would have been by reference to considerations such as

those mentioned above that the ansver would have been found.

I do not doubt that the answer should have been, "Yes".

The question would have been whether he should or should not draw the inference with respect to the period from March 1977 to 20 May 1977 that the appellant was not totally ancapacitated, in other words that notwithstanding his injury he was earning, or was able to earn, 1n some suitable employment or business at least some significant remuneration, In this connection it is apparent that the only occupation from vhich the appellant was excluded by his angury wasone involving heavy lifting and repeated bending. It is clear that the appellant has not even attempted to seek any other class of employment. In addition 1t may be thought reasonably that the evadence reveals that since. September 1975 the appellant has chosen a life-style and undertaken financial obligations beyond the capacity of a person whose only income was Workman's Compensation or at least has adopted a course of financial conduct out of accord with that to be expected in the light of common experience of a rational person in his postulated financial position. Where such a state of affairs exists it is proper for the Court to consider whether inferences may be drawn, as on a balance of probabilities, that there is an undisclosed explanation of the apparent improbabilities in the conduct disclosed. As was said by Dixon C.J. in Plomp v. The Queen(1963) 110 C.L.R. 234 at p.243 repeating what he had said in Martin v. Osborne (1936) 55 C.L.R. 367 at p.375:-

"If an issue 1s to be proved by circumstantial evidence, facts subsidiary to or connected with

the main fact must be established from which the conclusion follows as a rational inference, In

the inculpation of an accused person the evidentiary circumstances must bear no other reasonable explan- ation. This means that, according to the

common course of human affairs, the degree of prob- ability that the occurrence of the facts proved would be accompanied by the occurrence

of the fact to be proved 1s so high that the contrary cannot reasonably be supposed. The circumstances which may be taken into account in this process of reasoning include all facts and matters which form constituent parts or ingredients of the transaction itself or explain or make intelligible the course of conduct pursued. The moral tendencies of persons, their proneness to acts or omissions of a particular description, their reputations and their associations are in general not matters which it 1s lawful to take into account, and evidence disclosing them, if not otherwise relevant, is rigidly excluded. But the class of acts and occurrences that may be considered includes circumstances whose relation to the fact in issue consists in the probability or increased probability, judged rationally upon common experience, that they would not be found unless the fact to be proved also existed." (See also Morgan v. Babcock & Wilcox (1929) 43 C.L.R. 163)

It should be observed that, certainly in a civil case, such

an inference may be made not only where it provides the only rational explanation of the situation but where on balance

it provides the probable explanation. In this case the fact

to be proved by the respondent on the evidence was in the first anstance that the appellant had other undisclosed income.

There can be no doubt that on the evidence this inference

friends were a reality the probabilities are little affected

because the decision to take a course of action involving the assump- tion of heavy repayments was made before the loans were received and

in any event the loans had to be repaid. Perhaps the most significant

feature is that until, at any rate,a month before the hearing in

November 1977 the appellant's antention was to continue to

use the new house as his family home. To have built the house

as an investment would have been one thing but to build it to

live in must almost necessarily have proceeded on the basis that the appellant had other income. If the inference 1s drawn that

the appellant had other undisclosed income regard might then be

had to the most probable source of income. If the appellant chose to adopt some undisclosed method of earning money it is open to

the Court in the case of a man with business ability, and experience to find that 1t was earned in business or employment. Accordingly it is open to the Court to draw the inference from

the evidence that as at and shortly before 20 May 977 the appellant did earn or was able to earn at least some substantial remuneration by way of wages or the proceeds of engaging 1n business. The history of the appellant's business activities, his experience

as a contractor, his general entrepreneurial initiative and skill manifested 1n his association with the Little Joinery and otherwise, the necessity for the new car, the capacity to arrange large

and complicated finance and the deterrin2tion to transfer to a new large house all point to a confident man of business. To treat

has conduct as that of a man who never expected to work again

could well be regarded as quite unreal, indeed more than irrational. The question whether 1t was shown that the

appellant had ceased to be totally incapacitated was not dealt with. The respondent was entitled to have 1t dealt with. In

the circumstances this Court should deal with this actual

question. In my opinion the evidence 1s such as to enable it

to do so and I have no doubt that the appellant at the relevant

Consequence in relation to the location of the onus of

In the laght of the foregoing,the appellant is entitled to an award only if he proves, on the balance of probabilities, that the circumstances are such as to entitle him to an award in accordance with clause 1(c) of the First Schedule on the basis of partial incapacity. It is, of course,arguable that it would be for the respondent to prove that the appellant was

not partially incapacitated for work or that the degree of

incapacity for work was of such minor degree that the weekly payments should be terminated or reduced. In this connection the form of award,set forth as Form 17 in the First Schedule

"Having duly considered the matters submitted, the Court hereby orders and awards as follows:- -

fHere insert any introductory recitals of findings on which the award 1s made which the Court may

direct,/

1. That the respondent, C.D. , do pay to the applicant, A.B., , the weekly sum of as compensation for personal injury caused to the said A.B. on the day of

» 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, ancreased, or redeemed in accordance with the provisions of the above-mentioned Ordinance."

This form has been judicially approved. See Higgins v.

It may be accepted therefore that the Ordinance contemplates that 1n a case where an award has been made for weekly payments on the basis of total incapacity,the respondent remains liable,except,at least ,in special carcun- stances, to make such payments notwithstanding the cessation of total incapacity until the award is terminated or varied by a competent Court or perhaps by agreement. It may be argued from this that on an application to vary such an award the employer carried the onus of showing that circumstances

had so changed, that not only had the workman ceased to

be totally incapacitated for work but was not partially

incapacitated for work or was able to earn in work or business an amount which would reduce the weekly payments on the basis of partial incapacity to some specified amount less than the

In my opinion this does not follow. The form of the award provided for by Form 17 no doubt reflects the policy of Workmen's Compensation legislation that once an award is made the payments therein provided for shall continue until terminated or varied by the Court or by agreement. 'The workman is not to be harassed by an employer unilaterally terminating or reducing his payments on the allegation that the workman's incapacity for work had decreased, thereby putting the workman in the position of having to take action to prove, perhaps repeatedly,that his incapacity has not ended or decreased, It is a policy more than reasonable that the employer desiring relief from an award based on total incapacity should be required to obtain that relief from a Court on proof that there has been a change of circumstances going to the basis of that award. That policy is reflected in para.12 of the First Schedule. Once weekly payments are

made, on whatever basis, they are to continue unti1 terminated

or varied by agreement or by award. See Quinn v. McCallum (1908)

2 B.W.C.C. 339, Cory Bros & Co. Ltd. v. Hughes £19117 2 K.B. 738, North's Navigation Co. Ltd. v. Batten (1933) 26 B.W.C.Cc.

525, and compare Western Australian Coastal Shipping Commission v. WalIner (1979) 26 A.L.R. 591 a decision of the Full Court of the

Federal Court of Australia. But it does not appear to me that the factors ebovementioned go to the question of the location of the

onus of proof when relief is sought from weekly payments thereto-

When relief is sought from an award based on total incapacity, no doubt the onus is on the employer to show a critical change in the circumstances upon which the award was based, Those circumstances comprise , in the words of s.7 of the Ordinance and para. 1(b) of the First Schedule, that the workman had suffered injury arising out of or 1n the course of his employment with the employer and that in consequence thereof the workman was totally incapacitated for work. When it is shown that one vital circumstance has changed, namely that total incapacity has ceased, then 1t 1s the turn of the workman to raise a case

depending upon a new circumstance and a different statutory !

provision, namely Para. 1(c) of the First Schedule actavated by s.7 of the Ordinance. It is logical enough that ' the onus should then pass generally to the workman, particularly an relation to his lack of capacity to earn money in business °F
employment. In that connection the facts are necessarily

known to him and not necessarily or even probably to the

employer, The comments of Gibbs J. in J & H Timbers Pty. Ltd.

v. Nelson (1971-1972) 126 C.L.R. 625 at 651 concerning the ' relative unimportance of the actual location of the legal onus of proof are very much in point because it may well happen, and

no doubt does happen in countless cases, that the evidence for instance, of cessation of total incapacity may well indicate ' a contanuance of partial iuncapacity. But 1n a case like the

present there was danger to both parties 1f the location of the

There is a sense 2n which an employer who seeks termination or reduction of weekly payments, the subject of an avard based on the total incapacity or of payments being made voluntar2ly on the basis of total incapacity, is alleging change of circum- stances as a result of which the payments should be terminated or reduced, If the matter 1s looked at in this way and the application is seen as directed to liability, both for total and partial incapacity, as though the award were for total and partial incapacity, then proof of every circumstance necessary to reduce the avard, as if 1t were an avard for partial incapacity,

Tt 1s argued that the English decisions mentioned above should be read as proceeding on this basis, but I am not satisfied that this is necessarily so. However, 1n view of the

decision 1n Phillips v. The Commonwealth (1964) 110 C.L.R. 347

and the remarks of Jacobs J, in Commonvealth of Australia v.

Muratore (1979) 53 A.J.R. 98 concerning Phillips' Case this

Court should not proceed according to that view. Upon my interpretation of those last mentioned cases I feel bound to adopt what seems the more analytical view. It would appear

that the members of the High Court ,while recognising the authority of the English cases ,have taken the view that they are not incompatible with the general thrust of the decision in Phillips' Case. It may be noted that the liability of an employer under s.7

of the Ordinance is a liability "to pay compensation in accordance with the First Schedule to this Ordinance", According to that schedule the scale and conditions of compensation are laid down in paragraphs 1(a),1(b) and 1(c). Proof of death, total incapacity or partial incapacity as the case may be, is a condition of an

award based on the particular event relired on. The structure of

the Iuglish Workmens Compensation Act 1906 (as amended) is different. Section 1 of the Act created a liability in similar terms to s.7 of the Ordinance of the A.C.2. but the First Schedule to the 1906 Act omits what is para. 1{c) of the Schedule to the

pound," To obtain an award under the 1906 Act proof of incapacity total or partial would provide the required basis. In such a case, mere proof of cessation of total liability would not go to the basis upon which the award rested but only to the measurement of the weekly payments payable. The 1906 Act was not affected materially save by the enactment of the English Worlmens Compensation Act (1925). The structure of that Act itself differs from the Ordinance of the A.C.T. under consideration in this case.

What I have called the analytical view, as I under stand it, is that an award based on total incapacity is not, in substance, an award based on total and partial incapacity and is subject to avoidance on proof of the circumstance that the total incapacity on which it was based has ceased. In this connection the provisions of Form 17, referred to above, are

justified by the policy of the legislation that for the protection

of the workman, an award shall persist so long as there is

incapacity, be it total or partial, until set aside but this should not be seen to imply that an award based on total incapacity is inherently an award based on total and supervening partial incapacity. Thisnore 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 para-+1 (b) or pata. 14 (c) and places on those seeking relief from liability under one or other the onus of

proving a change of circumstances relevant to the particular grounds of liability established by voluntary payments or

awarded under Para. 1(b) ort(c),as the case may be. Once

there is a finding that the appellant has ceased to be totally uncapacitated for work liability under para. 1(b) of the First Schedule as activated by s.7 of the Ordinance has ceased. If that 1s the only finding,it may be a question whether 1t operates

in respect of the earlier total incapacity by way of subtraction, so to speak, sa that some degree of incapacity either physical

or economic remains. And, if economic incapacity remains, how much remains? It appears to me that the better view is that

once the critical factor of total incapacity for work has been

removed the respondent has destroyed the basis of the liability

established by an award under para.1(b) of the Schedule orthe liability

which he had admitted by making payments at the rate for total incapacity and there 1s no ground for casting on the respondent any further burden, by saying ta the respondent - "Well you have discharged total liability but you are liable for partial incapacity at some rate unless you show there 1s no partial incapacity for work or establish the amount payable pursuant to

In my opinion the true view is that in a situation such as existed 1n this case the appellant was at the outset of the proceedings in as strong a position as though there were an existing award in his favour imposing liability upon the respondent on the basis of total incapacity. If there had been an award it would have been based on an established incapacity for work, constituted in the words of Lord

Loreburn in Ball v. William Hymt & Sons Limited /19127 a.c.

496 by "a physical defect in the appellant which made his labour unsaleable in any market reasonably accessible to him", It is this basis of liability which would terminate if the respondent established the change of circumstances on which he relies, When that occurrs, there 1s no basis of liability

theory that it had been wrapped up in the concept of total incapacity and was revealed by way of subtraction from that

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

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

a man/ makes his labour saleable for less than it would otherwise fetch."

It is a condition of entitlement to an award,in respect of partial incapacity, that there be proot that as a consequence of physical incapacity the workman's labour is saleable for less to a specified degree. It is logical that the burden of proving this, when there 1s no antecedent finding of partial incapacity under the Ordinance, should be on the appellant. In a case in which cessation of total incapacity for work 1s established, there may still be evidence of residual physical incapacity which has made the appellant's labour saleable for less than it would othervise fetch. But that would merely mean that there was evidence available to the workman on the issue with respect to which the legal onus of proof 1s on him. And even in such a case,the degree of unsaleability would be peculiarly within the knowledge of the appellant. For the purpose of making an award on the basis of partial incapacity, 1n accordance with s.7 of the Ordinance and para.1(c) of the First Schedule,the extent of the diminution of saleability of that labour would have to be

established to implement the provisions of para.1(c).

In a case in which liability 1s established for payment of a weekly sum at a rate established by a workman on the basis of partial incapacity, 1t may be that at a later date the employer may desire to seek reduction or cessation of those weekly sums. In such a case the onus of proof would be upon the employer. This 1s because an employer challenging an award based on total incapacity or on partial incapacity must prove 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 avard under challenge was based on partial incapacity and reduction of payments 1s sought, the relevant chage of circumstances would be reduction in the diminuition of earning capacity suffered by the workman. In this exercise the employer 1s at the disadvantage that the relevant facts may be exclusively in the knowledge of the workman. However, there is a difference between 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 partial incapacity. In the former,nothing has been established in relation to the workman's partial incapacity. In the latter, the employer has at least an established position to work from. In any

event it is inevitable that an employer challenging an award

It would seem that arising out of the provisions of the Ordinance the concept of total incapacity for work differs in nature from that of compensible partial

incapacity for work. The cause of action in respect of

total liability depends upon s.7 of the Ordinance and para, 1(b) of the First Schedule, that in respect of partial incapacity depends on s.7 and para i(c) of the Farst Schedule. The decision of Kitto, Taylor and Owen JJ. in Phillips v.

The Commonwealth (1964) 110 C.L.R. 347 appears to me to be directly in point. in that case an employee received

payments of compensation under para. 1(b) of the First

Schedule of the Commonwealth Employees Compensation Act 41930-1956 (Cth) upon the basis of her total incapacity

for work because of an employment injury. Later the Commzssioner for Employees' Compensation determined that payments should end because she was no longer totally incapacitated. Upon appeal to the County Court she contended that she was still totally incapacitated, alternatively, partially incapacitated and thus entitled to compensation 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 vork, but his Honour Judge Dunn held that both on the finding in a certificate of a medical board given pursuant to s.19 of the Act and on the evidence before him it was clear that the appellant was not totally incapacitated for work. The appellant alss argued that she was partially incapacitated for work, but the Judge held that on the material before him he was unable to find that the appellant was not capable of earning, in some suitable employment or business, a weekly amount not less than her pay at the date of the injury as since varied. He went on to say 'It was urged on

behalf of the appellant that the onus of proof as to the amount the appellant 1s capable of earning in some suitable employment or business is on the respondent, In my opinion, that is not correct.

(2)), I think as a matter of principle ' that that is the proper view to take." (p.348)

"In the present case what had been initially established was that the appellant was totally incapacitated as, indeed, was the basis of her original claim for compensation, and immediately before the final determination of the delegate she held, in effect, an avard establishing her entitlement to compensation in accordance with par.i(b) of the First Schedule to the Act. That 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 16th November 1961 and upon the rehearing of the appeal to the County Court it was found as a fact that she was not totally incapacitated after that date. This finding 1s 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 1s clear that the applicant has no further raght to compensation under par.1(b). But it 21s contended on her behalf that in order to secure the dismissal of her appeal to the County Court it was incumbent upon the Commonwealth not only to establish tht fact, but also that after the date in question she was not ' partially incapacitated or, alternatively, that any remaining residual incapacity did not diminish her earning capacity. That is to say, that it was the appellant's contention that the onus lay upon the Commonwealth of proving facts showing, not only an absence of liability on its part under par.i(b) of the First Schedule, but also an absence of liability under par.1(c). There 1s, we think, some confusion in this contention. It may be that the issues before the County Court were not precisely defined but that the appeal had dual aspects is beyond question. 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 dis- - charged and the finding of the County Court cannot be challenged. Then arose the qustion whether comp- ensation 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 nev claim not previously pronounced upon before its rejection by the Commissioner. On this issue the onus was, we think, clearly upon the appellant. Accordingly, re do not think that the learned County Court Judge made any error of law upon this point."

It was argued by Mr. Costigan that this decision should be seen as nothing more than an application of what was decided by the majority of the members of the High Court in J. & H. Tambers Pty. Ltd. v. Nelson (41971-72)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 injury and incapacity for work but, where that incapacity is less than total, financial loss", per Menzies J. at 637. Mr. Costigan contended that in Phillips' Case the appellant was really seeking an initial award. He said, as I understood, that the proceeding in which the appellant lost the award in her favour, because it was showm that she was no longer totally incapacitated, was, or at least should be considered, quite separate from the proceeding in which she

sought an award on the basis of partial incapacity for work.

He contended that this followed from the form of the proceedings and from the fact that the Commissioner under the Commonwealth Employees' Compensation Act was entitled not only to make determinations ab initio, but was entitled himself to vary or terminate any payment of compensation. It was argued that the Commissioner was the employer and to equate his position to that 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 in the case before this Court was similar to that dealt with in Commonvealth of Australia v. Muratore (supra) at p.98 rather than 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 that the onus was on the Commonwealth to displace that award. This was accomplished by evidence in the appeal. The fact that it was accomplished easily by production of the certificate is not to the point. When that had been accomplished the appellant, as in this case, sought an award based on partial incapacity and was required to prove the elements necessary to support such an award. This she failed to do. It was in the same proceeding, namely the appeal, 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 this case, in the proceedings brought by him, had similarly a dual aspect, In its first aspect the award equivalent arising from para, 12 of the First Schedule was in issue. As from 20 May 1977 that equivalent ought not to have survived if the finding

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

In its second aspect the appellant's claim for an award on the basis of partial incapacity for work was in

issue. On that the appellant carried the onus of proof.

In Muratore's Case (supra) the workman had the benefit of the equivalent of an award on the basis of partial incapacaty for work. It was held that the Common- wealth's challenge ta that award was on the ground of changed circumstances and that the Commonwealth carried the onus of proving a diminution of incapacity. In the case under appeal before this Court there is no challenge to any award already made in respect of partial incapacity. In Muratore's Case the previous finding of partial incapacity for work was regarded as critical. It was porated out that the approach of the

majority of the Court in Thompson v. Armstrong and Royse

Pty. Ltd. (1950) 81 C.L.R. 585 does not support the

submission that despite the reasoning in Phillips's Case the ' onus always 11es on the employee to prove econom.e loss, even if he has in his favour a finding of partial incapacity for work. See per Jacobs J. at p.100. While deciding in

Muratore's Case that the onus was upon the Commonyealith to

prove diminution of the worker's incapacity for work, in the relevant sense, his Honour said at p.100 "The position is quite different if there has been no previous finding of partial ancapacity with a consequent assessment of the compensation payable." It is established that in such a case the employee pears the onus of proving the partial incapacity for work and the degree of his loss of ability to earn, J.& H. Timbers

The emphasis 1n Muratore's case is upon the indivisibility of the concept of partial incapacity for work

in relation to its 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 1n some suitable employment or business as less than his average weekly earnings before his injury (see s.46(2) of the 1971 Act). His partial incapacity for work is only relevant in so far as such a measurement can be made, that is 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 is physically able to earn, in some suitable employment or business, a weekly amount which is not less than his weekly pay at the date of ingury 1s alleging nothing relevantly 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 if it were alleged that his degree of incapacity for work had diminished so that his compensation should be reduced. In toth situations the Commonwealth is, orwould be, alleging that the circumstances of the 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) appear to me to anticipate

what was said above by the learned Justice.In the critical phrase "incapacitated for work" the economic aspect is wrapped up an the words "for work". Thus in the words of Fullagar J. "A man is ,totally incapacitated for work when he is by reason of his ingury,physically unable to work" p.613. Kitto J.

said at p.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 Phillips' Case in words

which appear to summarise the matter with compelling clarity.

"The problem 2n Phillips was somewhat different. The Commissioner varied his determination of total incapacaty by finding that there was no total incapacity; ain these circumstances the court held that on an appeal by way of re-hearing,

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 upon those he suffered in September 1975, was able to earn a substantial income in some employment or business and was not then totally incapacitated within the meaning of para. 1(b) of the First Schedule to the Workman's Compensation Ordinance 1951 of the Australian Capital Territory. Accordingly, the appellant at all 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 finding of the learned Magistrate that he was not satisfied that the appellant suffered any economic loss by reason of such injuries during

Magistrate on the evidence and should 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 if he so desired. But ain this case there was no reason to think that the appellant had not fully presented his case so far as he desired to do so. The appellant was under the impression that he carried the onus on the issues both of total, as well as partial, incapacity and in both the physical and economic aspects thereof. As was pointed out by the learned Magistrate ,the case had not really been fought on partial incapacity. It 1s not to be thought that the course adopted by the appellant was not advisedly taken. He was not without advice. Reference to the course of proceedings before the learned Magistrate indicates that the appellant had every opportunity to supply any omissions in or tender any additions to the evidence he had submitted in the course of four separate hearing occasions between 18 October 1977 and 22 November 1977. After the case was closed 1t was stated on behalf of the appellant that it was not desired to call any other evidence. In those circumstances the question of whether the Magistrate of his own motion should suggest an adjournment 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 matter purely in the discretion of the Magistrate. Indeed,I do not consider that the Magistrate would have been at fault had he not considered

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 discretion in the way that

",.. 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 1s relevant for my present decision,"

To my mind,the decision of the Magistrate not to adjourn the matter for further evidence reflected a conclusion by him that further evidence would not avail, and that this conclusion was really the effect on his mind of the total unreality of the alleged financial conduct of the appellant, considered as a person with no income and no prospects. Just as inferences might be drawn from these factors, as discussed above, in relation to the existence of a condition of total incapacity for work, so inferences may be

Mr. Costigan argued that there was really no need for further evidence, that in relation to a subject such as Workers Compensation the experienced tribunals dealing therewith frequently did and should recognise the impossibility of a workman providing

precise evidence of the comparison of earnings he might have

earned and can now earn and make a kind of experienced

assessment on a broad basis. He contended that the Magistrate should have done that, and that if partial incapacity 1s relevant to this case, this Court should do it. But in this case one cannot really do this. The procedure to which Mr. Costigan refers is

no doubt very sound in the ordinary case where physical incapacity 1s the governing factor 1n earning money and general bona

fides @e apparent. But in a case like the present it 1s umpossible to feel any satisfaction that the Court has anything like a true picture of the appellant concerning his conduct

in relation to earning money. Accordingly, like the Magistrate,

I could not feel on a balance of probabilities that the

appellant has satisfied me that during the relevant period he

In the event therefore, the appeal should be dismissed, I consider that the costs of the proceedings before the Magistrate should be borne by the appellant in accordance with the order made by that Court, As to the costs of the appeal to the Supreme Court, it was the fault of both parties that an appeal to that court eventuated. z

It being apparent that the basic cause of the difficulties arising in these proceedings was the conduct of the respondent in ceasing to make weekly payments in March 1977 in the absence of an agreement or arbitration authorising the same, and the

respondent havang successfully maintained in the Supreme Court

that the respondent did not carry the burden of proving circumstances entitling it to end or vary the payments made by it until March 1977 with the result that the necessary finding of fact as to the continuance or cessation of total incapacity was not made or provided for in the Supreme Court, it is my view that each party to the appeal should bear its

IN THE FEDERAL COURT OF AUSTRALIA ) ) AUSTRALIAN CAPITAL TERRITORY ) ) F.C. No. 8 of 1979 DISTRICT REGISTRY 5 ) GENERAL DIVISION ) BETWEEN: ANTONIO BARBARO Appellant AND: LEIGHTON CONTRACTORS PTY. LIMITED Respondent Coram: Smithers, Connor and Franki JJ.

This is an appeal from the Supreme Court of the Australian Capital Territory where Blackburn C.J. dismissed an appeal from the Court of Petty Sessions which in turn had dismissed an employee's claim for workers compensation and made an award in favour of the employer.

On 22 September 1975 the appellant Antonio Barbaro, (the workman) was employed by the respondent Leighton Contractors Pty. Limited (the employer). in the course of his employment he was walking on a concrete stormvater pipe which was placed across a trench. He slipped and feil to the bottom of the trench,

a distance of two metres. Two fellow workers assisted him to

the employer's site office where instructions were given that he be taken to the Woden Valley Hospital. At the hearing before the learned magistrate, who was the arbitrator, the workman was extensively cross-examined about other matters but was not asked any questions about the accident. The tio workers who assisted him out of the trench, one of whem took him to the hospital, were at the hearing but neither was called by the employer who did not dispute that the workman attended the hospital. His back was there x-rayed and he was referred to an orthopaedic surgeon. He was at the hospital for three or four hours and then came under the care of his general practitioner who prescribed bed rest at home.

Qn 18 November 1975 the workman first saw the orthopaedic surgeon to whom he had been referred ,at the hospital. He was then complaining, amongst other things, of low back pain and pain in the left shoulder which had been present for a few

weeks, although the workman had no recollection of having injured

his neck or shoulder. This orthopaedic surgeon, whose reports

were tendered by the employer concluded that the workman had sustained a combination of twisting injuries and a direct blow

to the lumbar spine resulting in a minor injury to his lumbo-

The employer's insurer then began making weekly payments

to the workman on the footing of total incapacity. The insurer continued making these payments and the workman continued to accept them for a period of about eighteen months until 13 March 1977 when the payments were unilaterally ended by the insurer. There was neither an award nor a recorded agreement in respect of these weekly payments. It was not suggested that the employer had requested a medical examination of the worker under paragraph 10 of the First Schedule of the Workmen's Compensation Ordinance 1951 as amended (the Ordinance). On 20 May 1977 the workman's solicitors took out an application claiming compensation. The learned arbitrator treated this as an original claim for compensation and on that basis regarded the workman as having the onus of proof on all issues. The learned arbitrator held that the workman had failed to discharge the onus principally because of unsatisfactory explanations he had given for large sums of money which he had undoubtedly received. Consequently the learned arbitrator made an award in favour of the employer. In giving his reasons che learned arbitrator said that the worker was seeking an award for compensation on the basis of total and permanent incapacity for work. He said further that "for practical purposes the issue before me is whether the

applicant has any and if so what incapacity for work since March

"Tl am satisfied on the evidence that the applicant suffered an injury to his back at

for work, let alone totally and permanently incapacitated for work." *

After examining the law the learned arbitrator, correctly in my view, concluded that he was concerned ultimately not with physical incapacity but with economic incapacity. He then went on to say:-

incapacitated at all was very much raised by the respondent's counsel",

The learned arbitrator then went on to say that there was no evidence before him of what the vorker could earn from his own physical efforts. Referring to the unsatisfactory evidence which the vorker had given concerning his financial affairs, the learned arbitrator said that were it not for this feature of the case it may have been that the proper course for him to take would be to refrain from finalising the matter in order that the worker might have the opportunity of placing some evidence before him of what the minimum wage would be for someone who was partially incapacitated or even perhaps to attempt to establish that although he had only a partial incapacity for work he should nevertheless in the circumstances be treated as a

person who was totally incapacitated for work as was done in

Ruiz v. Canberra Rex Hotel Pty. Ltd. (1974) 5 A.C.T.R. 1. The

learned arbitrator then concluded his reasons by saying:-

that he has suffered economic loss as a consequence of the injury in the period that is relevant for - my present decision. There will be an award for

the respondent". I have cone to the following conclusions and will deal with each of them in turn:-

1, The employer ceased payments in breach of the Ordinance;

2. The worker's application should have been treated on the footing that it was an application by the employer to vary or end existing weekly payments;

3. On an employer's application to review weekly payments the onus is on the employer either to show that the weekly payments should be ended or to put the learned arbitrator 1n a position to determine by what amount they should be reduced;

4, The learned arbitrator did not deal fully with the question of the worker's capacity to earn;

The Employer Ceased Payments In Breach Of The Ordinance

Section 7(1) of the Ordinance provides that if personal injury by accident arising out of or in the course of his employment by his employer 1s caused to a workman, his employcr shall, subject to the Ordinance, be liable to pay compensation in accordance with the First Schedule to the Ordinance.

The First Schedule provides in paragraph 1(b) and (c)

for weekly payments for total and partial incapacity. Paragraph

10 provides that any workman receiving weekly payments shall,

if so required by the employer, from time to time submit himself for examination by a legally qualified medical practitioner provided and paid by the employer and if the workman refuses to do so his right to such weekly payments shall be suspended until the examination has taken place. Paragraph 12, in so far as material to the present case, provides as follows: ~

arbitration under this Ordinance". Paragraph 9 of the Fourth Schedule provides that where any matter is decided under the Ordinance by agreement a memorandum may be sent to the Clerk of the Court to be entered in a special register and thereupon for all purposes it is enforceable as a judgment of the Court.

The scheme of the Ordinance with regard to weekly payments payable under the Ordinance pursuant to an award or a recorded agreement is clear cnough. They remain payable until varied or ended by agreement or arbitration. Rule 32 provides

that the award of the Court or any arbitration shall be in

accordance with Form 17 which contains the following: -

"1. That the respondent, C.D. . » do pay to the applicant, A.B., » the weekly sum of as compensation for personal injury caused to the said A.B. on the day of '

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 examined 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 payment under an unrecorded agreement.

An employer 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 1t 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, is discharging his liability under the Ordinance. As Lord Shaw of Dunfermline said in Ocean Coal Company Limited v. Davies [1927] A.C. 271 at p.287:-

liability; an award is merely part of the machinery for determining its amount and

for having it enforced. But the liability is imposed by the statute itself ...".° In any event I think the matter is well settled by

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

Limited [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

is 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.14 applied to voluntary weekly payments. Viscount Dunedin at p.278 said:-

"Now, I think'the scheme of s.14 is this: ayment which is being de facto made must be continued

until if is ended in any one of five ways ..." (italics 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 House 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).

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

It is 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 is not accomplished by payment into Court."

As to the efficacy of unrecorded agreements and the

implication of agreements from the offer and acceptance of

weekly payments, see also Guest, Keen and Nettiefolds Ltd. v.

Williams (1925) 18 B.W.C.C. 68 per Pollock M.R. at pp.73-74, per Scrutton L.J. at pp.77-78, per Sargant L.J. at p.80; Lindsay v. Glasgow Iron and Steel Co. (1925) 18 B.W.C.C. 600 per Lord

Skerrington at p.616 and Lord Sands at p.619; North's Navigation

Co. Ltd. v. Batten (1933) 26 B.W.C.C. 525 per Slesser L.J. at p.534; Birch v. Pease and Partners Limited [1941] 1 K.B. 615 per

Scott L.J. at pp.627-628, per Goddard L.J. at p.636. I think it is plain on principle and authority that the employer in this case unilaterally ended the payments in

contravention of paragraph 12 of the First Schedule of the

The Workman's Application Should Have Been Treated On The Footing

That It Was An Application By The Employer To Vary Or End Existing

In the present case the irregular conduct of the employer in ending the weekly payments in breach of the Ordinance virtually forced the workman to make an application. In my view the employer should not be rewarded for its arbitrary behaviour by being permitted to shed its onus of proof. I agree

with what was said by the Workers Compensation Board of Victoria

in Spitari v. Braun Transworld Corporation 3 W.C.B.D. 150. The

Chairman of the Board in that case was His Honour Judge Stretton, a most experienced judge in this field. At p.351 the Board said:

"For the guidance of future litigants we express the view that where an employer ends payments in breach of the provisions of the Clauses, he should not be placed in a better position than if he had pursued the only other course open to him under the legislation, namely, that of application by the employer to end or diminish

the weekly payment. Where that proceeding is taken, the onus of proving a change of circumstances (such as total or partial recovery of the worker's

earning capacity) rests upon the applicant employer. We feel that an employer who ends or alters payment

wrongfully and thereby commits a punishable offence

should not be permitted to rest in a better position as a result of his wrongful act."

It is true that in this Territory, unlike the State of Victoria, the employer does not commit a punishable offence for wrongful ending of payments; but I do not think that consideration materially diminishes the force of what was said by the Board in Spitari's Case.

For these reasons I am of the opinion that the workman's application should have been dealt with, in so far as onus of proof was concerned, as if it had been an employer's application to vary or end the weekly payments under paragraph 12 of the

On An Employer's Application To Review Weekly Payments The Onus

Is On The Employer Either To Show That The Weekly Payments

Should Be Ended Or To Put The Learned Arbitrator In A Position

The right to review a weekly payment is inherent in the award itself. It has been likened to a statutory, liberty to apply on the question of the weekly payments - see The Tyne Tees Shipping Co. Ltd. v. Whitlock (1913) 6 B.W.C.C. 559 per Cozens- Hardy M.R. at p.562, per Kennedy L.J. at pp.564-565. Unless there is a change of circumstances the application to review will

be dismissed - Steel, Peech and Tozer Ltd. v. Lambert (1933)

26 B.W.C.C. 579. When the employer brings the application he alleges changed circumstances whereby the workman has recovered all or part of his earning capacity. It has frequently been held that the onus of proof is on the party alleging the change

of circumstances - see for example Quinn v. McCalium (1908)

2 B.W.C.C. 339; Proctor s Sons v. Robinson [1911] 1 K.B. 1004;

Cory Bros. and Co. Ltd. v. Hughes [1911] 2 K.B. 738 per Co7zens-

Hardy M.R. at p.744; Wemyss Coal Co. Ltd. v. Kalpatrick (1922)

15 B.W.C.C. 379 at pp.387, 388; Smeaton _and Sons Ltd. v. Taylor (1933) 26 B.W.C.C. 369; Schuster v. Broken Hill Co. Pty. Ltd. >

[1934] W.C.R. (N.S.W.) 398 at p.403; Spitari v. Braun Transworld

(1956) 3 W.C.B.D. (Vic.) 350; J. & H. Timbers Proprietary Limited v. Nelson [1971-1972] 126 C.L.R. 625 per Owen J. at p.644.

Of the above cases Proctor & Sons v. Robinson [1911] 1 K.B. 1004 bears many points of resemblance to the present case. The workman had received an injury to his leg for which he was receiving weekly payments on the basis of total incapacity. The employers applied for a diminution of the weekly payment on the ground that the worker was no longer totally incapacitated for work. It was common ground that the workman could not do his former work as a lime-washer because he was not fit to work on ladders or scaffolding. One of che medical witnesses thought the workman could do ordinary work on the flat, another that he could do any work which did not involve long standing or much walking or stooping or lifting heavy weights. One of the witnesses added that he could not say what work would be suitable for the worker, and the other said that the worker could not earn his living as an ordinary labourer. The worker gave evidence that

he had not tried to get any job because he could not do his usual

work. He did not think that he could do labouring work because

The county court judge took the view that as the employers were asking to have the compensation diminished and the worker was still partially incapacitated as a result of

the accident it was incumbent on them to adduce some evidence

of his capacity to obtain some work which he could do.

earn in any kind of employment. There were no materials before the county court judge to

enable him to make any diminution. The argument addressed to us is this, that in a bona fide contested case the order ought to be made unless the workman can say 'I have applied for light work and have not been able to obtain it.' I think the employers here have struck too soon. They must first establish what particular kind

of light work the workman is able to perform and must follow that up either by proving that they have offered him that particular kind of light work or by giving some evidence that there is a chance of his obtaining that particular kind of work in the district if he applies for it. In
my opinion the employers here have failed to prove the case they have put forward. The burden rests on them and they have failed to discharge it. I think that the decision of the county court judge was right and that this appeal should be dismissed."

were applying for a reduction of the amount of compensation which the workman was receiving

from them. They had therefore not only to establish a right to reduce the compensation

but to put the Court in a position to determine the amount by which it should be reduced. They succeeded in obtaining a finding from the

county court judge that the workman was able to do some light work - a vague phrase to which I think the learned judge attached no very definite meaning. They adduced no evidence that he was able to do any obtainable work nor any evidence as to his wage-earning capacity in the condition in which he then was. I think that the decision of the county court judge was right and that this appeal should be dismissed." ,

"I am of the same opinion. The employers had to prove a cessation of total incapacity on the part of the workman. That they have succeeded in doing. Then they had to show what he was earning or capable of earning. It was not suggested here that the workman was earning anything, and the county court judge has found

that there was no evidence of his capacity to obtain such light work as he could do. They have failed to prove what he could earn or that he could obtain suitable employment in his present condition,"

namely Phillips v. The Commonwealth (1964) 110 C.L.R. 347 and +

The Commonwealth v. Muratore (1979) 53 A.L.J.R. 98. Both of

these cases were decisions on Acts in relation to the provision

of compensation for the employees of the Commonwealth and its instrumentalities. Phillips' Case was decided on the Commonwealth Employees' Compensation Act 1930-1956 (reprinted in 1957 volume p.751). Section 6 sub-ss.(1) and (2) were as follows:-

"(1) The Commissioner shall have power to examine, hear and determine ail matters and questions arising under the Act and the Regulations.

(2) The Commissioner may reconsider any such determination and may aiter, amend or revoke any such determination."

"Any person affected by any determination or action of the Commissioner under this Act may ... appeal to a County Court against the determination or action and the Court shall have jurisdiction to hear and determine the appeal, and such appeal may be in the nature of a rehearing."

"Any weekly payment may be reviewed by the Commissioner at the request either of the Commonwealth or of the employee and on such review may be ended, diminished or increased, subject to the maximum above provided."

In Phillips' Case a delegate of the Commissioner made

a determination on 22 August 1961 that the employee was entitled

to weekly payments as for total incapacity. On 8. December 1961

a delegate of the Commissioner determined that as from 16 November

1961 the employee had been able to earn in some suitable

employment or business a weekly payment not less than her pay

at the date of the injury as since varied, and thereupon she ceased to be entitled to weekly payments of compensation under the Act. The employee appealed to the County Court at Melbourne against the determination. The precise issue which arose for . determination before the County Court Judge was whether the employee "was at the material time able to earn in some suitable employment or business a weekly amount which was not less than her pay at the date of injury" (36 A.L.J.R. 358). The County Court dismissed the appeal.

The employee then appealed to the High Court which upheld the appeal (on a ground related to the medical certificate) and remitted the matter for a fresh hearing. At the rehearing before another County Court the employee submitted that she was totally incapacitated for work but the County Court Judge held that on the medical certificate and on the evidence that she was not totally incapacitated for work. The employee then argued that she was partially incapacitated for work but the County Court Judge was unable to find that she was incapable of earning her pre-injury pay. The County Court Judge considered that the employee had the onus af proof on this issue.

The employee again appealed to the High Court which dismissed the appeal holding that before the County Court the onus Jay on the Commonwealth to show that its liability to pay compensation to the employee as a person totally incapacitated

should be brought to an end, but that the onus lay on the

employee to show that she should be awarded compensation as a person

partially incapacitated and with a diminished earning capacity.

The ratio of this decision has, with respect, proved

to be elusive - see J. & H. Timbers Proprietary Limited v. Nelson

[1971-1972] 126 C.L.R. 625 per Barwick C.J. at pp.635, per Menzies J. al p.637, per Owen J. at pp.644, 645, per Gibbs J. at pp.650, 651 and The Commonvealth of Australia v. Muratore [1979]

53 A.L.J.R. 98 per Jacobs J. at pp.99-100 and per Murphy J. at

p.101. * Phillips' Case seems in part at least to have turned on the nature of the appeal provision, namely s.20 set out above. It provided for a hearing de novo in the County Court leaving that Court "to pronounce anew upon the rights of the parties as disclosed by the evidence before it" (see p.350). In that situation the Court said "if a claim for compensation be rejected by the Commissioner or his delgate 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" (see p.358). At p.351 the

"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". '

In The Commonwealth of Australia v. Muratore [1979]

53 A.L.J.R. 98 the employee had in his favour a determination of partial incapacity. The High Court held that the onus of proof of matter entitling the Commonwealth to have that entitlement of the employee reduced to nothing lay on the Commonvealth and not on the employee. The Court took the view that the Commonwealth was alleging a change of circumstances

with respect, to be a logical difficulty in reconciling the two

decisions. It might be said that Phillips' Case is authority

for the proposition that an employer sceking to end weekly

payments, which are being made to a worker on the footing of . total incapacity, has the onus of showing that the worker has

fully recovered his capacity to work; but, if he seeks only to

diminish such weekly payments, the employer has the onus merely

of showing that the worker is no longer totally incapacitated : and thereafter the onus passes to the workman to put the Court

in a position to determine the amount by which his compensation should be reduced. On this footing the employer presumably

would retain the heavier onus of showing that the worker had

totally recovered his earning capacity but could discharge with comparative ease the lighter onus of showing that he had

partially recovered it. Muratore's Case, on the other hand, holds

that an employer seeking to end or diminish a weekly payment for partial incapacity has the onus of putting the Court in a position to determine the amount by which the compensation should be diminished. -

The explanation appears, with respect, to be that the High Court in Phillips! Case did not consider that the issue of partial incapacity was encompassed in the issue whether a worker was or was not able to earn her pre-injury pay, but was an entirely new claim. So treated, the employee clearly had the onus of proof on all issues. I think this view of Phillips' Case is supported by the approval of the High Court of Quinn v.

McCallum, Smeaton v. Taylor and Cory Bros. v. Hughes, all supra.

"It 1s for the employer who wishes to bring the
payments to an end to establish his case by proof" |

In Smeaton and Sons Ltd. v. Taylor the Court of Appeal said:-

"Where there is a recorded agreement and the application is to review, the onus is on the person making it to prove the change of circumstance on which the application is based."

In Cory Bros. and Co. Ltd. v. Hughes, Cozens-Hardy M.R., with «+ whom Buckley and Kennedy L.JJ. agreed, said:-

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." - [1911] 2 K.B. at p.743,

"We do not doubt the authority of those cases and think they clearly establish the validity of the propositions we have set out."

One of the propositions which the High Court had just set out

".,. 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 hefore 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 Commonveaith. 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."

In the light of this I interpret Phillips' Case, with respect,

to mean that where it is clear that the proceedings are by way of review of weekly payments, and not by way of original claim, the onus of proof on all issues is with the party alleging

changed circumstances whether the existing payment is on the

footing of total incapacity of partial incapacity; and that it

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 amount they should be reduced.

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 have 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. Had 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 [vorkman] for work, or until the same shall be ended, diminished, increased or redeemed in accordance with the ... Ordinance" - see Form 17 supra. When either an employer or a 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- Eady 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. I think, with respect, that the observation of the Master of the Rolls in

Cory Bros. and Co. Led. v. Hughes [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 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". 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

"Eor myself, I am_not convinced that the mere 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

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 I have described it. It follows that I consider that His Honour was in error in holding otherwise. For these reasons I would uphold the appeal. The question then arises as to whether the matter should be sent back to the learned arbitrator or whether the employer, if so advised, should be left to make an application to end or diminish the weekly 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 energe that his capacity for work during this substantial period has been such that it would be unjust for the employer to be liable to pay him as for total incapacity. It might be said that the employer has brought such a result on himseif 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 viewv,it would not

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

arbitrator - see $.26(2) of the Workmen's Compensation Ordinance 1951 as amended and ss.208(1)(h), 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 remit 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, 1t 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 is appropriate to grdnt 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 evidence 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 I 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 illiterate 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 I 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 ~- see 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 6A(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, in which the onus is on the employer to prove changed circumstances. It is impossible 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 if his inability

is based on facts which are peculiarly within his knowledge.

For 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

FRANKI J. 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 1 Ordinance") for the determination of the following questions: ) "(a) As to whether the said

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.

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

"5. 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

"I 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."

Pursuant to s.215 of the Court of Petty Sessions 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.

"If 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 1(b) and 1(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:

"AR 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 l my opinion the preponderance of

evidence was, that the appellant | was, as a result of the injury,

incapacitated for heavy labouring 1 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

totally incapacitated for work. The appellant argued before us that the appellant was totally incapacitated for work by the injury but I consider that this was not so. Paragraph l(c) of

the first schedule which deals with partial incapacity provides:

(i) of the amount (if any) by which the weekly amount that he is earning, or is able to earn in some suitable employment or pusiness, after the injury 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 earning, or is able to earn in some suitable employment or business, after the injury is less than the weekly amount that would have been payable to him under sub-paragraph (b) of this paragraph, if he had been totally incapacitated,

It will be seen that the amount, if any, to which an injured workman is entitled where he is partially incapacitated for work by injury depends upon ascertaining the amount he "is

earning, or is able to earn in some suitable employment or

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 fail 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:

-7F7- "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."

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 applicalion 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 the 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 JJy 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

• 9 - 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 appealed 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 iancapacity. 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

In Commonwealth of Australia wv. Muratore' (1978) 22

A.L.R. 176 the High Court considered a somewhat similar 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

• 11- Muratore was partially incapacilaled 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 appellant 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 arder based on partial incapacity there must be sufficient material before it 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 is 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.

preceding pages are a true copy of the Reasons for Judgment herein of his Honour ir. Justice Franké }