[2025] FCA 1252
General information, not legal advice.
Federal Court of Australia
2025-10-15
Mr J, Charlesworth J
Original judgment source is linked above.
Note: Entry of orders is dealt with in Rule 39.32 of the .
(1) a Deed dated 19 December 2016 providing for a payment by the defendant (a physiotherapist) of $115,000.00 (Settlement 1); and
(2) a Deed of Release entered into in early 2017 providing for a payment by three defendants (a hospital and doctors) of $1,300,000.00 (Settlement 2).
(1) the person has a disability that is attributable to one or more intellectual, cognitive, neurological, sensory or physical impairments, or one or more impairments to which a psychosocial disability is attributable (s 24(1)(a));
(2) the impairment or impairments are, or likely to be, permanent (s 24(1)(b)) and result in substantially reduced functional capacity to undertake certain activities, including mobility and social interaction, self-care and self-management (s 24(1)(c));
(3) the impairment or impairments affect the person's capacity for social or economic participation (s 24(1)(d)); and
(4) the person is likely to require support under the Scheme for their lifetime (s 24(1)(e)).
3. L4/L5 prolapse with unconfirmed Cauda Equina Syndrome symptoms and anterior and posterior fusion.
...
10. Brain injury - ischaemic lacunas right basal gangalia [sic].
11. Permanent peripheral neuropathy of ideopathic [sic] aetology [sic] complicated by nutritional deficiency and prescription drug interactions.
i. Not just hands and feet - all over proximal and distal.
ii. Very high levels of continuous pain (4 times worse than experience of childbirth, very bad even when controlled by medication).
iii. Periodic bolts of extreme pain.
3.1 This Part applies in relation to a person who is a participant, or who later becomes a participant, if the impairment of the person was caused to any extent by a personal injury, and one of the following cases applies:
(a) the person received compensation under a judgement or settlement in respect of the injury in which:
(i) it is possible to identify the NDIS component of the amount of compensation (NDIS component is defined in paragraph 4.4); and
(ii) the component is either fixed by a non-consent judgement or is objectively identifiable (eg commutation of benefits under a statutory scheme); or
(b) the person received compensation under a judgement or settlement in respect of the injury that:
(i) does not satisfy paragraph (a) and
(ii) fixes an amount of compensation in respect of the injury; or
compensation means a payment (with or without admission of liability) in respect of:
(a) compensation or damages in respect of personal injury; or
...
(c) personal injury, in settlement of a claim for damages ...;
that is wholly or partly in respect of the cost of supports that may be provided to a participant (whether or not specifically identified as such). It does not matter whether the payment is made directly to the person who sustained the personal injury or to another person in respect of that person.
... the component that relates to the provision of supports of a kind that may be funded or provided under the NDIS after the date of the judgement or settlement ...
(1) suffered an injury as a result of the physiotherapist's treatment and that following the treatment she suffered chronic and constant back pain and numbness, which condition had since deteriorated;
(2) suffered numbness in her lower limbs as well as constant pain and spasms of the lumbar and thoracic spine for which she took significant medication;
(3) suffered psychological injury including stress, anxiety and depression;
(4) suffered financial loss in the form of lost income;
(5) received voluntary services from her husband; and
(6) would need voluntary and home assistance in the future as well as future medical treatment and medical services from orthopaedic surgeons, rheumatologists, rehabilitation medicine providers and psychiatrists, and related treatment.
(1) was admitted to hospital on 19 October 2009 for a L4/L5 posterolateral fusion with a pedicle screw fixation;
(2) suffered significant impacts from the treatment, including permanent hypoxic ischaemic neurological damage to her peripheral nervous system causing permanent loss of proprioception to her upper and lower limbs;
(3) suffered peripheral nerve damage to the distal fingers resulting in the requirement for assistance from her husband;
(4) suffered disabilities in the nature of impairment and restriction of bodily and mental functioning; and
(5) suffered economic and non-economic losses which included:
... the need for treatment, equipment and medical services and associated costs in the past and in the future; the need for voluntary and paid services in the past; the need for future care; a need for gardening, washing, household and domestic and maintenance services; past and future milage and travel costs.
... No evidence was received from [Mrs Pett] identifying how the settlement sum in the Deed of Release was quantified and the apportionment of the settlement sum between [Mrs Pett] and her husband, despite the Tribunal inviting [Mrs Pett] to provide such evidence and suggesting [Mrs Pett] speak with her solicitor who was involved in the settlement of Claim 2.
... The settlement of the civil action addresses the claim in negligence and damages pleaded by [Mrs Pett]. If within the terms of the settlement an applicant has been paid compensation which may be for NDIS type supports, then it is the Act and Rules to be applied to determine if there is a CRA and how that CRA is to be calculated. ...
Special circumstances 3.10
For the purposes of paragraph 3.5, the CEO may ignore the whole or part of a compensation reduction amount that would otherwise arise under this Part if the CEO thinks it appropriate to do so in the special circumstances of the case (which may include financial hardship suffered by the participant).
...
Compensation reduction amount - other circumstances
3.13 In the case of a judgement or settlement mentioned in paragraph 3.1(b), the CEO is to identify the compensation reduction amount as follows:
(a) calculate the amount of compensation fixed under the judgement or settlement;
(b) subtract the sum of the amounts (if any) payable in respect of the amount of compensation under the following:
(i) the Health and Other Services (Compensation) Act 1995;
(ii) the Health and Other Services (Compensation) Care Charges Act 1995;
(iii) Part 3.14 of the Social Security Act 1991;
(iv) a law of the Commonwealth, a State or a Territory, prescribed by the National Disability Insurance Scheme rules;
...
(d) if no preclusion period has arisen for the purposes of paragraph (c) and the CEO is satisfied that:
(i) the participant claimed damages in relation to lost earnings or lost capacity to earn; and
(ii) the amount of compensation fixed under the judgement or settlement included an amount in respect of those damages;
subtract 50% of the amount of compensation;
...
(f) subtract an amount that the CEO considers equivalent to the total of the amounts that were paid by the participant for supports, being supports of a kind funded under the Act, after the compensable event and before becoming a participant;
(g) subtract any recoverable amount payable by the participant in respect of the compensation amount pursuant to section 106 or section 107 of the Act;
...
[Mrs Pett] said she had no records of those expenses having moved house on numerous occasions. There was no evidence before the Tribunal in support of any itemised cost, no receipts, no bank statements, no evidence from the relevant support provider and no basis upon which the Tribunal could be satisfied that any item should be considered within Rule 3.13(f).
(1) a reduction of $873,415.65, representing the balance of Mrs Pett's total legal costs and expenses in obtaining both Settlements; and
(2) a reduction of $93,690.25 to account for NDIA's failure to apply Part 3 of the Rules to Mrs Pett's plan at the time when she first became a participant in the Scheme or otherwise in a timely manner.
It begs repeating that if [Mrs Pett] had provided evidence that satisfied the Respondent she incurred out of pocket expenses for supports of the kind funded under the Act after the compensable event the subject of [Settlement 2] and before becoming a participant in the NDIS, the CRA would, on the Respondent's submission, arguably be further ignored.
(1) Part 3 of the Rules did not apply such that no occasion arose for the assessment or imposition of any CRA (Grounds 1, 2, 4, 6, 7, 8 and 10); and
(2) alternatively, if Part 3 of the Rules applied, the Tribunal erred in applying the Rules in the calculation of the CRA (Grounds 2, 3, 4, 5, 6, 7, 8, 9 and 10).
(1) her entitlements to be supported did not arise solely by reference to the NDIS Act but were directly sourced in international law such that she had a legal entitlement to money on account of "missing" supports dating back to 2008 or 2009; and
(2) the Tribunal should have found malfeasance and other deliberate wrongdoing on the part of NDIA, and the Court should find malfeasance or other deliberate wrongdoing on the part of the Tribunal.
Connections between personal injury, impairments and claims for damages
(1) Mrs Pett's qualifying impairments were caused to any extent by a personal injury;
(2) Mrs Pett had received "compensation" (as defined in s 11 of the NDIS Act) under a judgment or settlement "in respect of the injury"; and
(3) fixed an amount of compensation "in respect of the injury".
(1) there was a payment made to Mrs Pett or any other person;
(2) "in respect of personal injury";
(3) the payment was "in settlement of a claim for damages"; and
(4) the payment was wholly or partly in respect of the costs of supports that may be provided to a participant (whether or not the payment was specifically identified as such).
The defendants' denial of liability was irrelevant
... causation of a person's injury is a complex issue, requiring the decider of fact, in this matter a civil court, to hear evidence from appropriately qualified experts including medical practitioners and to reach a required level of satisfaction, having regard to that evidence about negligence and causation of injury. That question of causation is not the function of the Tribunal.
The payments were in respect of fundable supports
Claims for damages were made notwithstanding the expiration of time
Legal costs and expenses did not displace the operation of Part 3 of the Rules
The Respondent also considers that the Tribunal denied [Mrs Pett] procedural fairness in its determination of that amount. That is because [Mrs Pett] had contended to the Tribunal that 'Claim 2' was a claim brought by her and her husband and that the settlement of 'Claim 2' involved a 50:50 split of the settlement amount between [Mrs Pett] and her husband. The Tribunal discussed its determination of the amount of compensation (under both 'Claim 1' and 'Claim 2') at T [105]. However, the Tribunal does not deal with, or resolve, that issue. The Tribunal has thus denied [Mrs Pett] procedural fairness, by failing to consider a substantial, clearly articulated argument. Additionally, even if the Tribunal had considered that issue and determined that it did not affect the calculation of the precise amount of compensation fixed under the settlement of 'Claim 2', an issue would nonetheless squarely arise on the materials as to whether some amount of the CRA should be ignored, pursuant to rule 3.10, given that on [Mrs Pett's] argument she herself did not receive the full amount of compensation, because some was paid to her husband. The Tribunal also failed to consider that possibility. ...
Conceded error relating to past actual expenses
(1) did not tell Mrs Pett that it would not subtract any amount unless it was substantiated by evidence of the kind later referred to in its reasons (notwithstanding that some of the expenses went back as early as 2008) and so failed to comply with the rules of procedural fairness;
(2) did not address Mrs Pett's assertion that it was not reasonable to expect her to provide such evidence given the passage of time and her numerous relocations; and
(3) did not afford Mrs Pett procedural fairness for the additional reason that the Reasons disclose no consideration of a list of items referred to by Mrs Pett or assess whether expenditure on some of those items could be accepted to have occurred in light of other documentary evidence before it.
... And then as that officer of the respondent back in February 2021 said, it's likely that the Petts have incurred expenditure on supports but the tribunal needs to be satisfied of the amounts that were paid and in the absence of evidence to support that, the respondent's submission is that the tribunal just can't reach that state of satisfaction.
68.8 [Mrs Pett] wishes to put the Respondent and the Federal Court on notice: the NDIA's repeated demand for receipts is not a neutral evidentiary request. It is a coercive strategy designed to extract an admission that the Respondent cannot lawfully obtain. To fill that evidentiary void, it has sought, repeatedly, to induce [Mrs Pett] to self-incriminate by offering a financial benefit - a reduced CRA - in exchange for documents that they could retroactively manipulate to validate an alleged compensable event.
68.9 This is not procedure. This is institutional coercion dressed as 'administrative process.' The message is as clear as it is unlawful: Prove to us that you spent money on support after the compensable event, and we'll reduce your penalty. [Mrs Pett] sees this for what it is: a financial inducement to validate a legal position the Respondent cannot prove. It is, in legal terms, an attempted bribe. It is scandalous. It is offensive. And it is systemic.
I certify that the preceding one hundred and thirty-four (134) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Charlesworth.
Pett
National Disability Insurance Agency [2025] FCA 1252
(1966) 117 CLR 412
(1995) 183 CLR 273