Administrative Law - costs - successful party not present when reserved decision given - failure to award costs to successful party - refusal by Tribunal to reconvene to consider application for costs - whether error of law

Commonwealth Employees' Rehabilitation and Compensation Act 1988, ss.67, 124

Compensation (Commonwealth Government Employees) Act 1971, ss.5, 26, 29, 45, 46

Harwood v. Wyken Colliery Company (1913) 2 KB 158

McCann v. Scottish Co-operative Laundry Association Ltd (1936) 1 All ER 475

Ward v. Corrimal-Balgownie Collieries Ltd [1938] HCA 70; (1938) 61 CLR 120

Hartwell v. Electricity Trust of South Australia (1982) 29 SASR 365

Fazlic v. Milingimbi Community Inc. [1982] HCA 3; (1981-1982) 150 CLR 345

Arnotts Snack Products Pty Ltd v. Yacob [1985] HCA 2; (1984-1985) 155 CLR 171

The Commonwealth of Australia v. Muratore [1978] HCA 47; (1978) 141 CLR 296

Re Stevanovic and Australian Telecommunications Commission (1984) 1 AAR 402

Ball v. William Hunt and Sons Ltd (1912) AC 496

Bavcevic v. The Commonwealth [1957] HCA 67; (1957) 98 CLR 296

Dornan and Ors v. Riordan and Ors (1990) 24 FCR 564

Electric Power Transmission Pty Ltd v. D'Urso [1970] HCA 40; (1970) 124 CLR 338

Dowell Australia Ltd v. Archdeacon [1975] HCA 29; (1974) 132 CLR 417

General Motors Holden Ltd v. D'Andrea (1985) 122 LSJS 301

Harradine v. Director, Department of Social Security [1989] FCA 200; (1989) 87 ALR 305

2. That the decision of the Administrative Appeals Tribunal made on 8 November 1990 be set aside.

3. That in lieu thereof the following decision be substituted:

(a) that the applicant is eligible to receive compensation in

accordance with the provisions of the Commonwealth

Employees' Rehabilitation and Compensation Act 1988 and that

14 December 1987 be fixed as the date of injury for the

purpose of para.29(2)(g) of the Compensation (Commonwealth

Government Employees) Act 1971;

(b) that the further determination of the applicant's claim for

compensation be referred back to the Commissioner for

Employees' Compensation for consideration in light of the

reasons for judgment of this Court delivered herein;

(c) that the respondent pay the applicant's costs of the hearing

before the Administrative Appeals Tribunal.

4. That time for appeal from these orders be extended until 14 days after

5. That the respondent pay the appellant's costs of this appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

On 7 March 1988 the applicant claimed compensation under the Compensation (Commonwealth Government Employees) Act 1971 in respect of bilateral inguinal herniae suffered by him. On 19 July 1988 a delegate of the Commissioner for Employees' Compensation determined that the applicant's employer, the Department of Social Security, was not liable to pay compensation. Upon review the Administrative Appeals Tribunal set aside that determination and in substitution therefore decided "that the applicant is eligible to receive medical costs and expenses associated with the operative repair of his herniae, including post-operative and convalescent care".

2. The decision of the Tribunal, whilst determining an entitlement to compensation for the herniae, in substance denied the claim of the applicant for weekly payments for an incapacity for work. The applicant now appeals against that aspect of the Tribunal's decision, and also against decisions of the Tribunal which had the effect of denying him a favourable order for costs of the proceedings before the Tribunal.

3. It is common ground between the parties that although the Compensation (Commonwealth Government Employees) Act 1971 has now been repealed by the Commonwealth Employees' Rehabilitation and Compensation Act 1988, under the transitional provisions of the latter Act, the applicant's entitlement is governed by the provisions of the repealed Act ("the Act").

4. At the conclusion of the hearing of the appeal I indicated that I considered the appeal should be allowed. I thereupon entered the orders which appear at the end of these reasons, and said I would publish reasons in due course. This was done at the request of the parties to allow discussions between them that were then under way on aspects of the claim to proceed without delay.

5. The applicant is a single man, born on 1 July 1953. On 27 February 1978 he commenced work with the Department of Social Security in a clerical position. In 1985 he was transferred to the duties of a driver and courier. He was required to collect and deliver mail items, furniture, machines and other stores items. Throughout his employment with the Department he was required to lift and carry items of moderate weight, and often exceeding 20 kg.

6. On 10 January 1987 he sought medical attention for a condition unrelated to his employment. On this occasion a small left inguinal hernia was diagnosed. The condition was reported orally by the applicant to his immediate superior, who did not treat the report seriously or as a formal report of injury but the parties are now agreed that nothing turns on this. The applicant lost no time from work on account of the hernia at that stage. He continued with his normal duties. The left inguinal hernia was then painless and causing him no trouble.

7. In May 1987 the applicant experienced pain and disability in his back. He undertook training for a field officer job with the Department and applied for different positions within the Department which he thought would be more suited to his back condition (which he seems to have treated as due to causes unrelated to his work). These applications were unsuccessful, and on 3 August 1987 he resigned from his employment with the Department because of his back trouble. The left inguinal hernia had not to this point of time caused any pain and had not interfered with the performance of his work.

8. In September 1987 the applicant applied for and was granted unemployment benefits. His back trouble settled down after he resigned from his employment with the Department. In the latter months of 1987 he was seeking employment elsewhere.

9. On 13 December 1987 whilst showering the applicant noticed an "enormous bulge" in his abdomen. He was examined by two doctors on 14 December 1987, firstly by Dr McDonnell, and then by Dr Johnson for a second opinion. Dr McDonnell diagnosed a left inguinal hernia as the cause of the protrusion. Dr Johnson confirmed the diagnosis, and also diagnosed a small right sided inguinal hernia. Both doctors certified him to be unfit for work. The applicant, who by this time had moved from Victoria where he had been employed with the Department, to Adelaide, had his name placed on the waiting list at an Adelaide public hospital to have the herniae repaired. The applicant was transferred from unemployment benefits to sickness benefits. The claim for compensation was made on 7 March 1988 at which time he was still waiting to be called up by the hospital for surgery.

10. In May 1988 the applicant's back trouble recurred, and thereafter became worse. On 15 July 1988 Dr McDonnell issued a medical certificate certifying unfitness for work for 28 days due to bilateral herniae and thoracic backache. On 15 August 1988 a similar certificate was issued by Dr McDonnell. On 22 August 1988 the applicant consulted Dr Risely who since that time has issued certificates that the applicant is unfit for work because of a thoracic spine condition. The exact cause of the back trouble and the degree of incapacity caused by it then and subsequently was not explored by the Tribunal, nor was the reason why the applicant has not yet had his herniae surgically repaired. This is understandable as counsel for the applicant, in opening his case before the Tribunal, indicated that the issues for determination were first, whether the herniae were causally related to his employment, and if so, secondly, whether his incapacity for work was, during the period from 14 December 1987 to 22 August 1988, total or partial.

11. The claim for weekly payments was confined to this closed period, apparently on the assumption that when the applicant became incapacitated for work by his back condition (as certified by Dr Risely on 22 August 1988) he could no longer claim payments of weekly compensation for incapacity caused by his herniae. This assumption is wrong in point of law, which counsel for the applicant acknowledged before this Court. As events turned out, the Tribunal, for other reasons, held that the applicant was not entitled to weekly compensation, so nothing turned on the way the claim was presented to the Tribunal.

12. The law is clear that a worker suffering an ongoing partial or total incapacity resulting from a work caused injury or disease does not cease to be entitled to compensation for that incapacity if an extraneous cause supervenes which would, in any event, incapacitate the worker. See Harwood v. Wyken Colliery Company (1913) 2 KB 158, McCann v. Scottish Co-operative Laundry Association Ltd (1936) 1 All ER 475, Ward v. Corrimal-Balgownie Collieries Ltd [1938] HCA 70; (1938) 61 CLR 120, and Hartwell v. Electricity Trust of South Australia (1982) 29 SASR 365 at 366.

13. It would appear from the medical evidence that the incapacity for work which the applicant was suffering in mid 1988 from his herniae continued at the same level beyond August 1988, and is likely to remain until such time as the herniae are repaired. On the footing that the herniae are work-related, and incapacity for work results from the herniae, the question arises whether the applicant has taken reasonable steps to mitigate the consequences of the herniae. The medical evidence was clear that surgical repair would cure the herniae, and the applicant should thereafter suffer no incapacity for work from that cause. An unreasonable refusal or failure on his part to undergo surgical repair would disentitle him to weekly payments of compensation from the time when the unreasonable conduct occurred until he submitted to the necessary surgery. The question to be considered is whether the applicant in failing or refusing to be operated upon acted reasonably in view of the medical advice which he received: see Fazlic v. Milingimbi Community Inc. [1982] HCA 3; (1981-1982) 150 CLR 345. In light of the orders which have been made on the disposal of this appeal, these matters remain for consideration by the Commissioner for Employees' Compensation.

14. I return to the matters which were considered by the Tribunal. First the Tribunal considered whether the herniae were causally related to the applicant's employment. The medical evidence was to the effect that the applicant probably had congenital or acquired weaknesses in his abdominal wall which had been aggravated by repetitive lifting in the course of his employment. The Tribunal referred to the "disease" provisions of the Act, ss.5 and 29, and, it would seem, found that the abdominal weaknesses were an ailment, disorder, defect or morbid condition suffered by the applicant, and that the herniae were aggravations thereof to which his employment was a contributing factor. The conclusions of the Tribunal on this aspect of the case were shortly expressed in para.23 of the reasons for decision: "The Tribunal finds that on the balance of probabilities both herniae were related to his work". Hence the Tribunal's decision that the applicant is eligible to receive medical costs and expenses associated with the operative repair of his herniae.

15. The finding of the Tribunal that the herniae were related to the applicant's work is in accordance with the medical evidence. The parties are in agreement that the Tribunal's decision in this respect should stand.

16. The conclusion that both herniae were work related is, at first sight, difficult to correlate with express findings made in para.28 of the reasons for decision which reads:

"The Tribunal makes the following findings -

(1) that the left inguinal hernia on the balance of

probabilities was aggravated by the duties that the

applicant performed when employed by the Department;

(2) the applicant's left inguinal hernia, diagnosed initially in

January 1987, imposed a partial incapacity from that date.

This partial incapacity extended to 14 September 1987 (sic);

(3) after the applicant had resigned from the Department on 3

August 1987 because of his back condition an additional

incapacity occurred on 14 December 1987."

(The reference in sub.para.28(2) to September 1987 should read December 1987).

I think para.28 is to be understood as referring to the situation during 1987. The right inguinal hernia was not diagnosed until 14 December 1987 and is, I think, comprehended in the reference to "additional incapacity" which occurred on 14 December 1987. On this reading para.28 is not inconsistent with the earlier finding.

17. The use of the expression "partial incapacity" in sub.para.28(2) is apt to be confusing. The meaning of "incapacity for work", an expression which is central to entitlement for the payment of many compensation benefits under workers' compensation legislation, means a physical disability which brings about a reduced physical capacity for actually doing work in the labour market in which the employee was working or might reasonably be expected to work: Arnotts Snack Products Pty Ltd v. Yacob [1985] HCA 2; (1984-1985) 155 CLR 171 at 178. But an employee may suffer an "incapacity for work", yet at the same time, because the injury or disease which results in the incapacity for work is not productive of a loss of earnings, not be entitled to receive weekly compensation under the provisions of ss.45 and 46 of the Act which deal respectively with weekly payments of compensation for total, and for partial, incapacity for work: The Commonwealth of Australia v. Muratore [1978] HCA 47; (1978) 141 CLR 296 at 301. In a strict sense, the expression in para.28(2) of the reasons for decision is correctly used, but it is important to recognise that this finding of partial incapacity for work does not necessarily give rise to an eligibility to weekly payments under s.46. This is a topic to which reference is again made later in this judgment.

18. It is convenient at this point to refer to sub.s.26(2) of the Act which assumed importance in the reasoning of the Tribunal. Sub-section 26(2) reads:

"26.(2) subject to sub-section (4), where -

(a) an employee who is partially incapacitated for work as a

result of an injury has taken all reasonable steps to

obtain, but has failed to obtain, suitable employment; and

(b) but for this sub-section, compensation in accordance with

section 46 would be payable to the employee in respect of

that injury,

then -

(c) compensation in respect of that injury is payable to the

employee in accordance with section 45 as if the employee

were totally incapacitated for work as a result of that

injury;..."

If a partial incapacity for work in the strict sense is not productive of a diminution in earnings no entitlement to payments of weekly compensation arises under s.46. There can therefore be no occasion in such a case to invoke the provisions of sub.s.26(2) which only operate in a case where the provisions of s.46 would otherwise prescribe the rate of weekly payment for a partial incapacity for work.

19. Although the left inguinal hernia from January 1987 constituted on the Tribunal's findings a compensable aggravation of a disease, it did not result in a partial incapacity for work which gave rise to an entitlement for weekly payments under s.46 whilst the applicant remained at work and in receipt of his normal wage. After the applicant resigned on 3 August 1987 and until about 14 December 1987 the left inguinal hernia was symptomless and did not result in a loss of remuneration so as to give rise to an entitlement to weekly payments under s.46, as that condition bore no causal relationship to the resignation or unemployment of the applicant. At no time has the applicant claimed weekly compensation for the period prior to 14 December 1987.

20. However the dramatic worsening of the left inguinal hernia on about 14 December 1987, and the presence of the small right inguinal hernia, clearly enough resulted in incapacity for work which was productive of economic loss in the relevant sense. The applicant was thenceforth unable to carry out the range of duties he was accustomed to performing and as a matter of fact the herniae became the cause of him not being able to perform work of the kind he was then seeking. The findings in para.28 of the reasons for decision do not however cover the period after 14 December 1987, and it is necessary to look elsewhere in the reasons for an explanation for the rejection of the claim for payments of weekly compensation from 14 December 1987.

21. Before the Tribunal, counsel for the applicant contended that the applicant from 14 December 1987 was totally incapacitated within the primary meaning of that expression, or alternatively was to be treated as totally incapacitated as falling within the "odd lot" principle. Counsel referred the Tribunal to Re Stevanovic and Australian Telecommunications Commission (1984) 1 AAR 402 where authorities on the meaning of total incapacity and on the odd lot principle are usefully gathered together by Deputy President Todd. It is sufficient for the purposes of identifying the issues raised before the Tribunal by these submissions to make brief reference to passages of two of the leading authorities there discussed, namely Ball v. William Hunt and Sons Ltd (1912) AC 496 at 505 per Lord Atkinson:

"...The earning of wages depends as much on the demand for the

workman's labour as it does upon his physical ability to work. If

because of his apparent physical defects no one will employ him,

however efficient he may be in fact, he has lost the power to earn

wages as completely as if he was paralysed in every limb.

If it be then the paramount object of the Act to compensate for

the loss of the power to earn wages, the workman whom because of

the injury caused by an accident, nobody will employ, comes within

its purview as much as one who is rendered unable to do any work

at all."

And Bavcevic v. The Commonwealth [1957] HCA 67; (1957) 98 CLR 296 at 303-304 per Dixon C.J. and Kitto J.:

"It has long been settled that total incapacity may exist although

the injured man retains enough physical capacity to enable him to

do particular work of a special kind not forming one of the

ordinary recognised avenues of employment. In this Court the

position was summarised thus - 'permanently and totally disabled,

an expression which, in our opinion, means physically

incapacitated from ever earning by work any part of his

livelihood. This condition is satisfied when capacity for earning

has gone except for the chance of obtaining special employment of

an unusual kind': Wicks v. Union Steamship Co. of New Zealand Ltd.

[1933] HCA 58; (1933) 50 CLR 328, at p 338. If that be the case the disablement

is regarded as total unless and until the employer can show that

such special employment is available. The judgment of Fletcher

Moulton L.J. in Cardiff Corporation v. Hall (1911) 1 KB 1009, at

pp 1020, 1021 contains the explanation which is regarded as the

basis of the doctrine. It is there that his Lordship used,

perhaps unfortunately and certainly apologetically, the expression

'odd lot' with reference to the labour which the injured man is

capable of offering. The passage in which it occurs is as

follows: 'If I might be allowed to use such an undignified phrase

I should say that if the accident leaves the workman's labour in

the position of an 'odd lot' in the labour market, the employer

must shew that a customer can be found who will take it. For in

such a case we are not in truth dealing with fluctuations of the

labour market at all. We are dealing with the chance of some one

being found who can and will avail himself of the special residue

of powers which has been left in the workman, and, seeing that it

is the result of the accident that the workman has been made

dependent on the finding of such a special employer, it is right

that those who are liable to pay to him compensation for his loss

of earning power should only be allowed to take credit for his

partial capacity for work if they can shew that it can actually be

made productive of remuneration to him' (1911) 1 KB, at p 1021."

The remarks of Lord Atkinson in Ball v. William Hunt and Sons concern the meaning of the expression "total incapacity" in its primary sense, and stress that it is necessary to have regard not only to the capacity from a medical viewpoint to undertake remunerative employment, but also to the capacity of the particular employee to obtain suitable employment, that is, to the likelihood of the employee obtaining suitable employment taking into account such matters as age, training or the lack of it, experience, and susceptibility to further injury. The "odd lot" principle extends the concept of total incapacity to include an employee who, because of a work related disability and all the surrounding circumstances retains only a capacity for obtaining remunerative work "with a sympathetic employer more interested in rehabilitation of an injured worker than in obtaining a fit and active person for his workforce": Re Stevanovic and Australian Telecommunications Commission at 415. In deciding whether an employee comes within this principle particular regard must be had to "the concomitant circumstances in which the injured employee might exercise his residual capacity", and "the 'concomitant conditions' in which the capacity is to be exercised must be judged reasonably in accordance with common conceptions of what is customary...": Bavcevic v. The Commonwealth at 303 and 305 respectively.

22. Counsel for the respondent, on the other hand contended that the applicant was only partially incapacitated and drew attention to sub.s.26(2). Counsel contended that the applicant had not taken all reasonable steps to obtain suitable employment during the period for which compensation was claimed.

23. The reasons for decision canvass the evidence at some length, but are unfortunately brief and cryptic in expressing the Tribunal's conclusions. Paragraphs 22 and 23 in material parts read:

"22. The Tribunal has considered the evidence as a whole,

particularly that of the doctors, together with the evidence

recorded in the s.37 documents and in the exhibits. The

Tribunal has also given consideration to a number of cases

including: Electric Power Transmission Pty Ltd v D'Urso

[1970] HCA 40; (1970) 124 CLR 338; Dowell Australia Ltd v. Archdeacon

[1975] HCA 29; (1974) 132 CLR 417; Re Papadatos and Commonwealth of

Australia (1987) 12 ALD 747; Re Stevanovic and Australian

Telecommunications Commission (1984) 1 AAR 402; General

Motors Holden Ltd v D'Andrea 122 LSJS 301; Hartwell v ETSA

(1982) 29 SASR 365.

23. The Tribunal now turns to record its findings. The

applicant was partially incapacitated from 14 December 1987,

that being the date when he was advised of the existence of

the bilateral inguinal herniae..."

These paragraphs fail to disclose the reasoning process by which the Tribunal came to the conclusion that the applicant was not, or was not to be treated as, totally incapacitated in the period after 14 December 1987. The medical evidence left these questions finely balanced. For example between 14 December 1987 and 19 April 1988 the applicant was waiting his turn to be admitted to hospital for surgical repair of the herniae, he was receiving sickness benefits, and he had medical certificates certifying him to be unfit for work. This evidence points towards a situation of total incapacity for work. This evidence is qualified however by a letter from Dr McDonnell dated 18 December 1987 which reads, in part:

"These herniae would not preclude him from doing a job as a

courier - but I am sure no one will employ him with this

pre-existing disorder. It therefore seems he is unemployable

at the moment."

Then on 19 April 1988 Dr McDonnell completed a "Treating Doctor's Report" for the Department of Social Security in relation to a review of sickness benefit entitlement in which he answered the question: "How does the medical condition affect the person's ability to work in any other job?" by writing "Capable of light work". Elsewhere in the Report he said the applicant's capacity for work was limited by pain. The Report, like the doctor's letter of 18 December 1987, acknowledges a capacity for light work, but that capacity must be assessed having regard to the consideration that his medical condition might render him unable to obtain employment, or as Dr McDonnell said in his letter, unemployable.

24. This evidence required serious consideration of the principles discussed in Re Stevanovic and Australian Telecommunications Commission to which decision the Tribunal referred in para.22 of its reasons, but the application of those principles required prior findings of fact as to the degree of disability suffered by the applicant, and as to the prospects of the applicant obtaining work other than with a sympathetic employer who was prepared to create a position tailored to those disabilities. The reasons for decision do not disclose whether these principles were considered, and if so, what findings of fact were made relevant to the application of them. Without knowing what findings of fact were made it is impossible to tell if the Tribunal reached the conclusion which it did by the application of correct or erroneous legal principles. The Tribunal has failed to fulfil the requirements of s.43(2B) of the Administrative Appeals Tribunal Act 1975 which requires the Tribunal, where it gives written reasons, to record its findings on material questions of fact. The failure to do so in this case is a substantial breach of s.43(2B) and constitutes an error of law which requires that aspect of the decision to be set aside: Dornan and Ors v. Riordan and Ors (1990) 24 FCR 564.

25. Having reached the conclusion that the applicant was partially incapacitated, the Tribunal then considered s.26(2). It concluded that the applicant had not brought himself within its provisions as he had not taken all reasonable steps to obtain suitable employment. The discussion of the Tribunal reflects confusion arising from a failure to distinguish between a physical disability which was not productive of a loss of earnings so as to attract s.46, and one which did not - a distinction to which I have already referred. This is evident from the fact that the Tribunal has discussed the application of s.26(2) to the applicant during the period whilst he was still at work from January 1987 to 3 August 1987. It is however unnecessary to further comment on the Tribunal's discussion of sub.s.26(2) as the evidence was clear that the applicant made no attempt to find suitable or any work after 14 December 1987. His counsel concedes he could not, on the evidence before the Tribunal, bring himself within sub.s.26(2). His case was one for payments under s.45 on the footing that he was totally incapacitated either in the ordinary meaning of those words or according to the "odd lot" principle

26. On the express findings that the applicant was partially incapacitated for work from 14 December 1987, and that he had not brought himself within s.26(2), the applicant was entitled to receive weekly payments of compensation at the rate to be determined under s.46(2) from that date. However the decision of the Tribunal, by its terms, denied the applicant weekly payments. The reasons for decision do not reveal why this conclusion was reached. One possibility is that the Tribunal considered that a worker who is partially incapacitated for work who fails to meet the requirements of s.26(2) is entitled to no weekly compensation. This explanation would reflect an error of law for it overlooks the provisions of s.46 which entitle such a person to weekly compensation according to the rates prescribed when the provisions of sub.s.26(2) are not fulfilled.

27. Another possible explanation appears from a reading of the reasons for decision. It will be noted that in para.22 of the reasons the Tribunal referred to Electric Power Transmission Pty Ltd v. D'Urso [1970] HCA 40; (1970) 124 CLR 338, Dowell Australia Ltd v. Archdeacon [1975] HCA 29; (1974) 132 CLR 417 and General Motors Holden Ltd v. D'Andrea (1985) 122 LSJS 301. These decisions had been referred to in the address of counsel for the respondent. The first two decisions concern s.11(2) of the Workers Compensation Act 1926 (NSW), and the third decision concerns s.67 of the Workers Compensation Act 1971 (S.A.). These sections contain provisions under which the partial incapacity of a worker may be deemed to be total incapacity for the purposes of entitlement to weekly payments, but both sections are substantially different to s.26(2) of the Act in that they cast obligations on the employer to provide suitable light work. Nevertheless counsel sought to use these decisions as examples of demonstrated inability or unwillingness by partially incapacitated workers to undertake suitable employment, and to argue that if the workers in those cases were not entitled to the benefit of deeming provisions which put a responsibility on the employer to provide suitable work, a fortiori, a partially incapacitated worker who was unable or unwilling to undertake suitable light work would not come within the provisions of s.26(2) of the Act. I have difficulty understanding how the authorities cited could have been of assistance to the Tribunal. Unfortunately the Tribunal seems to have misunderstood the limited purpose for which the decisions were cited. The Tribunal has recorded in its reasons for decision that

"The respondent submitted further that the fact that the applicant

had resigned from his position meant that he had broken any

mutuality between himself and his employer and on that basis was

therefore not entitled to compensation."

It is possible that the decision of the Tribunal to deny all entitlement to any weekly payments reflects an acceptance of this submission which is not further discussed in the reasons, save for the inclusion of the reference in para.22 to the three cases cited by counsel. That reference is unhelpful in the absence of any indication whether those cases were treated as irrelevant, or if not, as to the way in which some principle from them was applied. If the submissions of counsel, as understood by the Tribunal, were accepted, the Tribunal erred in law. Considerations of "mutuality" which may arise under sub.s.11(2) of the New South Wales legislation and s.67 of the South Australian legislation have no application to s.26(2) of the Act.

28. The decision of the Tribunal must be set aside as through error of law it denies the applicant entitlement to weekly compensation. For reasons already given the finding that the bilateral inguinal herniae are work related should however stand. In my opinion the finding that the applicant's incapacity for work following 14 December 1987 was a partial incapacity for work must also be set aside. The question of whether the incapacity for work from 14 December 1987 was total or partial, the appropriate rates of weekly compensation, and the period or periods during which weekly compensation is payable, should be remitted to the Commissioner for Employees' Compensation for consideration. These matters have not previously been considered by the Commissioner as liability was initially denied on the ground that the herniae were not work related.

29. The other matter raised on this appeal concerns the applicant's costs of the proceedings before the Tribunal where the applicant was successful to a substantial degree.

30. The relevant power of the Tribunal to award costs is to be found in sub.s.67(8) of the Commonwealth Employees' Rehabilitation and Compensation Act 1988 which reads:

"67.(8) Where, in any proceedings, the Administrative Appeals

Tribunal makes a decision:

(a) varying a reviewable decision in a manner favourable to the

claimant; or

(b) setting aside a reviewable decision and making a decision in

substitution for the reviewable decision that is more

favourable to the claimant than the reviewable decision;

the Tribunal may, subject to this section, order that the costs of

those proceedings incurred by the claimant, or a part of those

costs, shall be paid by the determining authority."

Subject to the provisions of s.67, the power given by the Tribunal to award costs is discretionary. No other provision of s.67 is presently relevant. Had an application for costs been made on the applicant's behalf when the Tribunal delivered its reasons for decision there is no reason why the applicant would not have received a favourable order for costs. However when the decision was handed down no one appeared before the Tribunal on behalf of the applicant. In the result no order for costs was sought, and none was made. The hearing was not adjourned so as to provide an opportunity for the applicant to apply for costs. The applicant's solicitors later applied to have the matter relisted to apply for costs, but the Tribunal refused to reconvene saying that as the matter was concluded no further action of any kind could be taken in connection with it.

31. Evidence received by this Court to explain what happened discloses that on 27 June 1990 the Tribunal reserved its decision. By letter dated 5 November 1990 addressed to the applicant's solicitors, the applicant was advised that the decision of the Tribunal would be handed down on 8 November 1990. When the decision was handed down the presiding member of the Tribunal expressed criticism of the solicitors for the applicant for not being present and commented that too frequently solicitors did not attend to take decisions. This caused inconvenience and delay. Costs should be applied for when the decision was handed down, and the Tribunal would not make an order for costs in favour of the successful party if no application were made at that time.

32. The concern of the presiding member about inconvenience and delay caused by the non-attendance of the representative of a party when a matter is listed is understandable. The non-attendance, if wilful or the result of neglect, is also most discourteous. But it is an extreme step to deny a successful party the costs of the action in consequence. Even where the failure of a legal practitioner to attend is without reasonable excuse that failure can appropriately be dealt with by a special order as to the costs of the further hearing made necessary by the non-attendance.

33. However, before any action is taken by the Tribunal which would have the effect of penalising a party or the party's legal practitioner in this way it is important that the Tribunal ascertain that there is no reasonable excuse for the non-attendance. This may require the Tribunal to reassemble on another occasion, if and when an application for costs is made.

34. In the present instance, in my view, a reasonable excuse did exist. The solicitor within the firm acting for the applicant was on holiday when the letter of 5 November 1988 arrived at the firm's offices. The interval of time between the posting of that letter and the delivery of the reasons for decision was very short. Although the letter was delivered to the desk of the solicitor concerned it was not acted on before the decision was handed down. Breakdowns and delays in communication by letter of this kind occur not infrequently. For this reason it is, I believe, a common practice in many courts for the judge's associate or secretary to telephone the legal practitioners concerned in a matter to advise when judgment is to be delivered. Communication in this way ensures that the message is received.

35. In the circumstances of this case, even if the reason for non-attendance did not constitute a reasonable excuse, no reasonable exercise of the discretion as to costs could justify depriving the successful party - to whom no immediate notice of the impending decision had been given - of the costs to which he would be entitled as a matter of course. It would be most unjust to visit the single error of the solicitor for a party on the party himself in this way.

36. The grounds of appeal challenge the refusal of the Tribunal to reconvene on the ground that the matter was concluded. In my view the Tribunal fell into error of law in this respect. On the question of costs I do not consider the Tribunal was functus officio once it had handed down its decision. Sub-section 67(8) stands as a discrete head of power. It empowers the Tribunal to award costs where it makes a decision coming within the terms of the sub-section. The sub-section contemplates that the decision will be given before the occasion to exercise the power arises. The power can only be exercised after a decision has been made which varies or sets aside a reviewable decision. Until the power is exercised the functions of the Tribunal are not complete.

37. Inconvenient though it might have been, it was within power, and necessary, for the Tribunal to reconvene to consider the application for costs upon the request of the applicant.

38. It is conceded by the respondent, properly in my view, that had the power been exercised, it would have led to an award of costs in the applicant's favour. As that is the only reasonable decision which could flow from an exercise of that power, this Court should exercise the power and make an order for costs in the applicant's favour, rather than send the matter back to the Tribunal: cf Harradine v. Director, Department of Social Security [1989] FCA 200; (1989) 87 ALR 305, especially at 307 per Wilcox J.

1. That the appeal be allowed.

2. That the decision of the Administrative Appeals Tribunal made on 8

November 1990 be set aside.

3. That in lieu thereof the following decision be substituted:

(a) that the applicant is eligible to receive compensation in

accordance with the provisions of the Commonwealth

Employees' Rehabilitation and Compensation Act 1988 and that

14 December 1987 be fixed as the date of injury for the

purpose of para.29(2)(g) of the Compensation (Commonwealth

Government Employees) Act 1971;

(b) that the further determination of the applicant's claim for

compensation be referred back to the Commissioner for

Employees' Compensation for consideration in light of the

reasons for judgment of this Court delivered herein;

(c) that the respondent pay the applicant's costs of the hearing

before the Administrative Appeals Tribunal.

4. That time for appeal from these orders be extended until 14 days

after the publication of these reasons for judgment.

5. That the respondent pay the appellant's costs of this appeal.