What flows from the error?
38 The appellant seeks an order that the matter be remitted to the Workers Compensation Commission for redetermination. The practical effect of such an order in this case is that the matter would be referred back to an Arbitrator for redetermination. Presumably, that would involve a rehearing. In that regard, the respondent would want the matter determined on the facts as they exist at the time of the rehearing, including the fact that the appellant is no longer in Australia, having voluntarily left in 2005 under threat of deportation.
39 The respondent contends that, in the circumstances, the Court ought not to remit the matter to the Commission but should dismiss the appeal, because the only possible result of the exercise of the discretion under s 40(1) is that no award for compensation would be made. It was submitted that this was so because the Court would not, as a matter of public policy, make an award for compensation in circumstances where to do so would acknowledge, endorse or sanction the commission of a crime, even if that sanction would be in respect of a hypothetical matter - hypothetical because the appellant was not in fact working in Australia. If it made any award, it would, so the respondent contended, have to be on the assumption that the appellant could in fact earn some moneys in Australia, whereas if he did so he would be committing a crime and any contract of employment entered into would thereby be illegal. It was submitted that the amendments to the Migration Act since the decision of this Court in Nonferral removed any doubt as to the illegality of a contract of employment entered into by a person who was disentitled to work in Australia under the terms of that person's visa. I will need to return to this decision.
40 The respondent also submitted that the courts had exhibited a policy against the award of damages for economic loss in circumstances where the earnings of a person claiming damages had been or would be earned in circumstances involving unlawful conduct. Senior counsel for the respondent referred the court to two decisions, both involving common law claims for damages. He informed the court that his researches had not been able to find a case under the Workers Compensation legislation where this issue had been dealt with.
41 Central to the respondent's submissions was that any contract of employment that the appellant might have in Australia would be illegal. The respondent relied on Smiths Newspapers Ltd v Becker (1932) 47 CLR 279 and Lee v McClennan (1995) 127 FLR 383.
42 In Smith's Newspapers Ltd v Becker, a German physician who had unlawfully held himself out to be entitled to practice in Australia was held not to be entitled to recover damages in a defamation claim. Dixon J, at 299, held that the unlawful conduct:
"operates positively to exclude compensation for loss, whether actual or conjectural, which depends upon the [physician's] unlawful conduct."
43 In Lee v McClellan, which involved a claim for damages for injuries sustained in a motor vehicle accident, Hulme J, after referring to Smith's Newspapers Ltd v Becker, held at 386-388 that the damages that the party could recover did not include compensation for earnings received in breach of the Migration Act.
44 The respondent submitted that the existence of such an overriding policy, namely of not permitting the recovery of economic loss in circumstances where the exercise of an earning capacity would constitute a criminal offence, would mean that, upon the proper exercise of the discretion conferred by s 40(1), the appellant would have received no compensation.
45 The question whether as a matter of discretion, the appellant's visa status would necessarily determine the outcome of the application for compensation brings me to a consideration of Nonferral v Taufia. In that case, the respondent entered Australia on a visitor's visa. Under the terms of his visa he was not entitled to work without the permission of the Secretary of the Department of Immigration. He undertook employment without having obtained the necessary permission and was injured during the course of that employment. The principal argument before the Court of Appeal was whether the contract of employment was illegal. Cole JA held that rights dependant upon a contract entered into in breach of statute are not unenforceable. Stein JA held that the contract of employment was not illegal and Sheppard AJA found that the contract was illegal but considered that in the exercise of the discretion under s 24 of the Workers Compensation Act, the matter should be dealt with as if the respondent had been working under a valid contract of service. Section 24 provided:
"If, in any proceedings for the recovery of compensation under this Act, it appears that the contract of service or training contract under which the injured person was engaged at the time when the injury happened was illegal, the matter may be dealt with as if the injured person had at that time been a worker under a valid contract of service or training contract."
46 Mr Taufia had returned to Tonga by the time the trial judge had made an award for compensation. The trial judge, after having performed the calculations required of him by ss 40(2)(a) and (b), in the exercise of discretion under s 40(c), discounted the difference down to $25 per week by having regard to the respondent's earnings in Tonga since his return. This Court accepted that that was an appropriate approach to take in the exercise of the discretion.
47 It follows therefore that although the appellant had no entitlement to work in Australia from the time that his visa status changed, it is not a foregone conclusion that his application for weekly payments for partial incapacity under s 40 must be dismissed. It may be that the approach endorsed by this Court in Nonferral v Taufia would recommend itself to the primary decision maker. It is also possible that there is an argument available to the respondent that that approach is either not available, or ought not be available given that the migration legislation has changed since that decision. There may be other discretionary factors of which this Court is not aware that may also be relevant. In those circumstances, I am of the opinion that the appellant, having established error in the determination of the Acting Deputy President, is entitled to an order that the matter be remitted for redetermination.
48 Subsequent to preparing these reasons I have had the opportunity to read in draft the comments of Santow JA. As is apparent from what I have said in the preceding paragraph, the further determination of this matter will depend not only upon the proper application of the law, but will also depend on such facts and discretionary considerations as are found to be relevant at the time of the rehearing. The consideration of the then current Migration legislation may be a relevant consideration. If there is any question of the illegality of the appellant's employment that arises out of the terms of the legislation, the decision maker will have to determine the relevance and effect of any such illegality. In this regard, the principles governing illegal contracts may well require consideration. The principles were reviewed by this Court in Karl Suleman Enterprises Pty Limited (In Liq) v Babanour [2004] NSWCA 214.
49 Accordingly, I propose the following orders: