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[2000] AATA 553
Administrative Appeals Tribunal of Australia
2000-07-06
Original judgment source is linked above.
DECISION AND REASONS FOR DECISION [2000] AATA 553
Decision The decision under review is affirmed.
Lees v Comcare and Another: Comcare v Mathews and Others [1999] FCA 753; (1999) 56 ALD 84
1. This application concerns the issue of whether the Tribunal has the power to consider on the merits whether Toni Denison-Smith ("the applicant") has sustained an injury which has resulted in a permanent impairment for the purposes of s24 of the Safety Rehabilitation and Compensation Act 1988, ("the Act") and if so, whether Comcare ("the respondent") is liable to pay additional compensation in accordance with s27 of the Act.
2. The Tribunal had before it the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (the "T" documents).
3. The applicant was represented by Mr Corrighan of counsel, and the respondent was represented by Mr Roder of counsel.
4. The following facts are not in dispute and are accepted by the Tribunal:
a) On 23 April 1992 the applicant lodged a claim for compensation under the Safety Rehabilitation and Compensation Act 1988 ("the Act") for a work-related injury resulting in "foot strain, leg strain" (T3).
b) On 21 May 1992 the respondent accepted liability to pay compensation for "aggravation of pronated foot condition resulting in bilateral foot and leg strain" ("the injury") (T48/105).
c) The injury was deemed to have occurred on 19 February 1992, when the applicant first sought medical treatment. The respondent paid compensation in respect of the cost of medical treatment during the period 19 February 1992 to 2 December 1992 together with incapacity payments in relation to the period 13 April 1992 to 13 December 1992 (T48/105).
d) On 26 March 1993 a delegate of the respondent advised the applicant that the respondent would cease liability from the said date in regard to the bilateral foot and leg strain. A medical report by Dr Humble suggested that the effects of the injury had ceased (T32/72). This decision was made pursuant to s14 of the Act.
e) As there has been no reconsideration of the decision of 26 March 1993 (i.e. no reviewable decision), the Tribunal does not have jurisdiction to review that decision. The reasons given for not pursuing a reconsideration of the 26 March 1993 decision were cited as being that the applicant did not intend to resume her employment with the Department of Defence, and because she was not incurring any significant medical expenses at the time. The applicant further stated that she retired from the Australian Public Service on 3 July 1993 (see letter of instructions from Ms Denison-Smith dated 3 February 2000).
g) On 23 July 1996 a delegate of the respondent informed the applicant that she was too late to submit a claim for permanent impairment as three years and three months had lapsed since the cessation of liability on and from 26 March 1993 (T38/79).
i) On 6 January 1999 a delegate of the respondent determined that no compensation was payable in respect of the applicant's claim for permanent impairment and non-economic loss under ss.24 and 27 of the Act because liability had ceased in relation to the compensable injury on and from 26 March 1993 on the ground that the effects of the compensable injury had ceased (T41).
j) On 4 February 1999 the applicant's solicitor requested a reconsideration of the decision made on 6 January 1999 (T42/94). That decision was affirmed by a delegate of the respondent on 14 July 1999 (T48).
k) On 5 August 1999 the applicant lodged an application with the Administrative Appeals Tribunal for review of the respondent's decision of 14 July 1999 (T1).
Section 14 is concerned with injuries which result in death, incapacity for work or impairment, and provides that:
14.(1) Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.
(2) Compensation is not payable in respect of an injury that is intentionally self-inflicted.
(3) Compensation is not payable in respect of an injury that is caused by the serious and wilful misconduct of the employee but is not intentionally self-inflicted, unless the injury results in death, or serious and permanent impairment.
Section 24 makes provision for compensation for injuries resulting in permanent impairment and provides:
Compensation for injuries resulting in permanent impairment
24.(1) Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.
(2) For the purpose of determining whether an impairment is permanent, Comcare shall have regard to:
(b) the likelihood of improvement in the employee's condition;
(c) whether the employee has undertaken all reasonable rehabilitative treatment for the impairment; and
(3) Subject to this section, the amount of compensation payable to the employee is such amount, as is assessed by Comcare under subsection (4), being an amount not exceeding the maximum amount at the date of the assessment.
(4) The amount assessed by Comcare shall be an amount that is the same percentage of the maximum amount as the percentage determined by Comcare under subsection 5.
(5) Comcare shall determine the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide.
(6) The degree of permanent impairment shall be expressed as a percentage.
(7) Subject to section 25, where Comcare determines that the degree of permanent impairment of the employee is less than 10%, an amount of compensation is not payable to the employee under this section.
(8) Subsection (7) does not apply to any one or more of the following:
(a) the impairment constituted by the loss, or the loss of the use, of a finger;
(b) the impairment constituted by the loss, or the loss of the use, of a toe;
(c) the impairment constituted by the loss of the sense of taste;
(d) the impairment constituted by the loss of the sense of smell.
(9) For the purposes of this section, the maximum amount is $80,000.
Section 27 makes provision for compensation for non-economic loss which may arise if a permanent impairment is deemed to exist. The section provides that:
27.(1) Where an injury to an employee results in a permanent impairment and compensation is payable in respect of the injury under section 24, Comcare is liable to pay additional compensation in accordance with this section to the employee in respect of that injury for any non-economic loss suffered by the employee as a result of that injury or impairment.
(2) The amount of compensation is an amount assessed by Comcare under the formula:
A is the percentage finally determined by Comcare under section 24 to be the degree of permanent impairment of the employee; and
B is the percentage determined by Comcare under the approved Guide to be the degree of non-economic loss suffered by the employee.
6. Counsel for the respondent, Mr Roder, submitted that s14 of the Act is the threshold liability section for the purposes of the applicant's claim. If Comcare accepts liability for compensation under s14, then the amount and type of compensation payable is determined under other sections of the Act, including ss 24 and 27. Mr Roder cited Lees v Comcare [1999] FCA 753; (1999) 56 ALD 84 as supporting the above submission.
7. Mr Roder submitted that as threshold liability has ceased pursuant to s14 in a primary determination made on 26 March 1993 (T32), it follows therefore that ss 24 and 27 cannot come into operation. Furthermore, Mr Roder submitted that liability had been ceased for all types of compensation including permanent impairment, and not just incapacity payments or medical expenses.
8. Mr Roder submitted that as liability had been ceased, the applicant must first successfully challenge the s14 determination, which never underwent internal review, before she can lodge her claim for permanent impairment and non-economic loss under ss24 and 27. This path would involve the applicant applying for an extension of time in order to get the initial s14 determination reconsidered by Comcare. Mr Roder pointed out that Comcare has the discretion to grant or not grant an extension of time. The discretion is in place as a legislative compromise to prevent abuse of the system from applicants who want to re-open their case without reasonable cause, and conversely prevent hardship to applicants who merit a re-opening of their case but who have run into the problem of time-limits.
9. Mr Roder referred to a passage in Lees and Comcare (supra) in which Wilcox, Branson and Tamberlin JJ in obiter surmised a rare situation where an applicant who did not have a s14 determination of liability might be able to proceed immediately to a s24 determination. Mr Roder submitted that this loophole did not assist the applicant in any case, as a s14 determination ceasing liability had been made even though a reconsideration of the decision had not been sought.
11. However, Mr Roder conceded that Comcare's delegate had erred in purporting to make a determination (T48) under ss24 and 27 of the Act. The respondent submitted that the delegate ought only to have alerted the applicant to the fact that there was no power to make a s24 and s27 determination unless the s14 determination to cease liability was reviewed.
12. Given that the respondent did make a s24 and s27 determination and reconsideration, Mr Roder conceded that there is a reviewable decision before the Tribunal. However, he submitted that the appropriate orders for the Tribunal to make would be to set aside the reviewable decision and to make no order in substitution for it on the ground that the initial decision was beyond power.
14. Mr Corrighan submitted that at the time of the s14 determination (T32), which ceased liability for incapacity payments and medical expenses, the applicant had no difficulty with the decision as she was pregnant and no longer working. Permanent impairment was not an issue raised by the applicant when the s14 determination ceasing liability was made.
15. Mr Corrighan submitted that in light of the above, the s14 determination (T32) only ceased liability in regard to incapacity payments and medical expenses, but did not address the question of permanent impairment. Therefore it has been left open for the applicant to make a s24 and s27 application. Mr Corrighan further submitted that the case of Lees and Comcare (supra) does not preclude a s24 and s27 determination if a s14 determination is not in place in regard to the permanent impairment issue.
16. However, Mr Corrighan conceded that if the Tribunal accepted the respondent's submissions, then the Tribunal only had the power to make an order setting aside the decision (T48).
17. Mr Corrighan submitted that if the Tribunal chose to follow the latter path, the applicant would have to get the original s14 determination (T32) reviewed pending a successful application for an extension of time.
18. Mr Corrighan expressed concern that to be successful in an application for an extension of time, the applicant would have to rely on the favourable exercise of Comcare's discretion, thus removing the applicant's absolute right to make a claim for permanent impairment. Mr Corrighan similarly expressed concern that the applicant was being penalised simply because the permanent impairment claim was lodged over three years after liability was ceased, thus creating time limit problems. Had the permanent impairment occurred sooner, the applicant would not be in this situation.
19. The respondent's decision of 26 March 1993 was to cease liability to pay compensation to the applicant from this date because the effects of the relevant injury, namely aggravation of pronated foot condition resulting in bilateral foot and leg strain, had ceased.
20. The above decision brought liability to an end as and from 26 March 1993. It was clearly a determination under s14 of the Act and had the effect of a denial of liability to pay compensation to the applicant until such time as it was set aside or varied. As and from 26 March 1993 there was no liability to pay compensation to the applicant in respect of her injury as it had not been established that her injury had resulted in death, incapacity or impairment. The determination of 26 March 1993 was not the subject of any reconsideration by the respondent (the applicant had not applied for any reconsideration) and so the determination of 26 March 1993 is still current. However, the applicant has now made application to the respondent for extension of time within which to challenge the determination by way of a reconsideration of it.
21. The review sought by the applicant before this Tribunal relates not to the s14 determination but to the affirming on 14 July 1999 of the respondent's decision of 6 January 1999 rejecting the applicant's claim for permanent impairment and non-economic loss because liability had ceased as and from 26 March 1993.
22. The Tribunal now turns to the question as to whether it can review the decision of the respondent made on 14 July 1999 keeping in mind that the Tribunal can do so if the decision is a reviewable decision. (ss60 and 62 of the Act). The decision of the respondent on 14 July 1999 is, in the opinion of the Tribunal, a reviewable decision. It was a decision to affirm a rejection of a claim for permanent impairment and non-economic loss pursuant to ss24 and 27 of the Act. The initial decision of 6 January 1999 was a determination pursuant to ss24 and 27 and fell within the definition of "determination" in s60(1) of the Act. There was nothing precluding the applicant from making the ss24 and 27 claim. The Act does not preclude such a claim from being made. Whether or not such a claim could be considered on its merits, bearing in mind that there was in place at the time a s14 determination denying liability, is another question which the Tribunal now turns to.
23. In the Tribunal's opinion the answer to the above question lies in the Full Court's judgment in Lees v Comcare (supra) and is to be answered in the negative. Lees (supra) makes it clear that ordinarily before any issue of an employee's or former employee's entitlement to compensation for permanent impairment arises, a favourable determination concerning that person's entitlement to compensation needs to be in existence under s14 of the Act. (Lees (supra) para 49 p95). No such determination was in place when the applicant's claim for permanent impairment and non-economic loss was considered and reconsidered. In the opinion of the Tribunal, Lees's case (supra) makes it plain that s24 is not to be read as a second source of liability to pay compensation in respect of an injury to an employee resulting in impairment. The Court in Lees (supra) saw s14 of the Act as creating that liability and s24 as being intended to define the nature and extent of the liability to pay compensation in respect of an injury which results in permanent impairment. In other words, ordinarily, an acceptance of liability must be in place under s14 before a consideration and determination of a claim pursuant to ss24 and 27 takes place. The Full Court in Lees case (supra) referred in paragraph 49 to a situation arising in which it may be that the Act allows the issue of Comcare's liability to pay compensation for permanent impairment to be determined under s24 of the Act, notwithstanding that no earlier determination under s14 has been made. In the case before this Tribunal there is no absence of a determination under s14 but, instead, there is in place a determination pursuant to that section denying liability to pay compensation.
24. As previously indicated, the Tribunal considers the determinations of 6 January 1999 and 14 July 1999 to be determinations made pursuant to s24 and, consequentially, s27, and that of 26 March 1993 to be a determination pursuant to s14 of the Act and the Tribunal so finds. The plain meaning of the words used in making these decisions as outlined in T41, T48 and T32 leads to no other conclusion.
25. As referred to earlier, the application before this Tribunal seeks review of the determination of 14 July 1999 which, in turn, was made under ss24 and 27 of the Act. This determination is a reviewable decision pursuant to ss60 and 62 of the Act. This Tribunal is only authorised to review reviewable decisions pursuant to s62 of the Act and its powers and discretions pursuant to s43(1) of its own Act are the powers and discretions conferred by the Act on the respondent for the purpose of reconsidering a determination under s62 of the Act. The Tribunal is not authorised when reviewing a reviewable decision to exercise any powers and discretions which were not available to the respondent at the reconsideration stage and the Tribunal is of the opinion that the respondent was empowered to consider the claim which the applicant made pursuant to ss24 and 27 of the Act.
26. It is the considered view of the Tribunal that when the respondent came to consider the applicant's claim for permanent impairment and non-economic loss initially on 6 January 1999, and again by way of reconsideration on 14 July 1999, it correctly rejected the subject claim on the grounds that there was in existence a prior determination pursuant to s14 of the Act denying liability. In the face of that prior determination and in light of the judgment in Lees (supra) that was the only and appropriate course of action to take - it could not consider the merits of the applicant's claim in the absence of a favourable determination pursuant to s14 of the Act, nor did it do so. Accordingly, the Tribunal (in the shoes of the respondent) must affirm the decision under review.
27. The decision of the Tribunal is that the decision under review is affirmed.
I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President B.H. Burns
Signed: .....................................................................................
Date/s of Hearing 21 January 2000 and 15 March 2000
Solicitor for the Applicant Tony Corrighan & Associates