Telstra Corporation Ltd v Aboushadi

REASONS FOR JUDGMENT WILCOX J: 1 This is an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act') in relation to an assessment of compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) ('the Act'). The facts 2 The respondent to this appeal, Youssef Aboushadi, was employed as a property manager by the applicant, Telstra Corporation Limited ('Telstra'), from 1977 until 13 September 1999. According to a claim for compensation made by Mr Aboushadi under the Act, an incident occurred on 8 March 1996 as a result of which he sought medical advice and took leave from work. He claimed to suffer from 'work related stress'. However, Telstra disputed that he was incapacitated for work by reason of an 'injury': see the definition of that term in s 4(1) of the Act. Consequently, the claim for compensation was rejected. Apparently, the period of Mr Aboushadi's absence from work was treated as sick leave. 3 Mr Aboushadi's leave records suggest that, between 30 June 1998 and 13 September 1999, he had further time off work. On 13 July 1998, he claimed compensation under the Act on the basis of work-related stress. Once again, his claim was rejected. Apparently he received sick pay for some of the period for which he was on leave. 4 It appears from Mr Aboushadi's leave records that he did not return to work before 13 September 1999, the date upon which he was retired from his employment. The appeal book does not contain any documents concerning the circumstances of the retirement but it was agreed between counsel that the retirement took effect at the close of business on 13 September 1999. 5 The available documents do not indicate whether Mr Aboushadi's claim for compensation under the Act covered the months preceding his retirement on 13 September. He certainly made a claim for the period after that date, on the basis that he suffered a continuing incapacity for work. This claim was rejected and Mr Aboushadi sought review of that decision by the Administrative Appeals Tribunal ('the Tribunal'). 6 On 17 January 2001, Mr Aboushadi also sought compensation for permanent impairment, pursuant to s 24 of the Act. This application was rejected and steps were taken to add that rejection to the pending application for review by the Tribunal. 7 On 26 February 2001, the applications for review were compromised. Counsel for the parties each signed a document, penned by counsel for Telstra, setting out orders the Tribunal would be invited to make by consent. The orders dealt separately with the claims for weekly compensation and for permanent impairment. The weekly compensation agreed orders were as follows: '1) The reviewable decision dated 25 November 1998, the subject of matter no N1999/60, be set aside and the determination dated 10 September 1998 be varied to read as follows: a) the applicant suffered an injury arising out of or in the course of his employment with the respondent, namely a chronic adjustment disorder; b) as a result of that injury the applicant was incapacitated for work during the period 13 September 1999 to 13 September 2000; c) the respondent is liable to pay compensation to the applicant in respect of such period of incapacity in accordance with the provisions of the Safety, Rehabilitation and Compensation Act, 1988; d) the respondent is liable to pay compensation to the applicant in respect of outstanding medical treatment expenses in the agreed sum of $9457.00, upon production of accounts and/or receipts, and inclusive of Health Insurance Commission notice of charge; e) the effects of the applicant's work-related injury resulting in incapacity for work and need for medical or other treatment ceased on and from 14 September, 2000.' It is not necessary to set out the agreed orders concerning permanent impairment. 8 The Tribunal made orders substantially in accordance with those agreed between the parties. However, there was a lengthy delay in Telstra paying the compensation envisaged by order (1)(c). In the meantime, Mr Aboushadi applied for, and received, superannuation pension payments. 9 On 2 September 2002, Telstra's delegate determined the quantum of the weekly compensation payments for the period 13 September 1999 to 13 September 2000 that had been agreed in February 2001. The determination was made on the basis that the case was governed by s 20 of the Act, not s 19. Mr Aboushadi requested a reconsideration of this decision. On 10 February 2003, Telstra's delegate affirmed the determination of 2 September 2002. 10 Mr Aboushadi applied to the Tribunal for review of this decision. According to information given to the Tribunal, the effect of applying s 20, rather than s 19, was to reduce the total amount of the weekly payments by about $14,000. The statutory provisions 11 Section 14(1) of the Act provides that, subject to other provisions in Part II of the Act, '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'. 12 The word 'injury' is widely defined by s 4(1) of the Act. For present purposes, nothing turns on that definition. However, it is relevant to note that s 4(8) provides that a reference in the Act to 'an injury suffered by an employee', subject to any apparent contrary intention, is 'a reference to an injury suffered by the employee in respect of which compensation is payable under [the] Act'. 13 The term 'incapacity for work' is defined in s 4(9) of the Act as 'an incapacity suffered by an employee as a result of an injury', being an incapacity to engage in any work or an incapacity to engage in work at the same level at which he or she was engaged by the Commonwealth immediately before the injury happened. 14 Section 19 of the Act is titled 'Compensation for injuries resulting in incapacity'. Subsection (1) provides that the section applies to an employee 'who is incapacitated for work as a result of an injury, other than an employee to whom section 20, 21, 21A or 22 applies'. 15 Section 20(1) and (2) provide: '(1) This section applies to an employee who, being incapacitated for work as a result of an injury, retires voluntarily, or is compulsorily retired, from his or her employment at any time after the commencement of this section and, as a result of the retirement, receives a pension under a superannuation scheme. (2) Comcare is liable to pay compensation to the employee, in respect of the injury, in accordance with this section for each week after the date of the retirement during which the employee is incapacitated.' 16 Subsection (3) sets out a formula for calculating compensation. That formula takes into account superannuation receipts. The Tribunal hearing 17 Mr Aboushadi's application for review was heard by Senior Member Sassella on 25 September 2003. On 19 January 2004, Mr Sassella published a decision, by which he made the following orders: 'The decision under review is set aside and the matter remitted to the respondent for reassessment of the rate of incapacity payments payable to Mr Aboushadi during the relevant period in accordance with the tribunal's finding that s 19 of the Safety, Rehabilitation and Compensation Act 1988 applies on the basis that the onset of Mr Aboushadi's incapacity for work and the time of his retirement coincided in time at 4.51 pm on 13 September 1999. Costs are payable to the applicant in accordance with the tribunal's general practice direction.' 18 In para 7 of his reasons for decision, Mr Sassella identified five issues to be considered in determining whether the computation of Mr Aboushadi's weekly payments should be made under s 20 or s 19. They were as follows: '(a) Was Mr Aboushadi an employee incapacitated for work as a result of an injury under the Act? (b) If the answer to (a) is yes, did Mr Aboushadi retire be it voluntarily or compulsorily? (c) If the answer to (b) is yes, did he receive a pension under a superannuation scheme? (d) If the answer to (c) is yes, did he receive the pension as a result of the retirement? (e) If the answer to (d) is yes, was Mr Aboushadi incapacitated for work before he retired?' 19 Mr Sassella gave separate consideration to all these issues. He answered each of (a) to (d) affirmatively. No issue arises in relation to those answers. However, it is important to note that (a) was answered solely by reference to the agreement between the parties embodied in order (1)(b) of the consent orders made on 26 February 2001; the Tribunal did not itself investigate, or make any finding about, the duration of Mr Aboushadi's incapacity. 20 In para 14 of his reasons for decision, Mr Sassella said: 'At first blush it appears that Mr Aboushadi was incapacitated for work before he retired. The tribunal's consent decision included that Mr Aboushadi was incapacitated for work "during the period 13 September 1999 to 13 September 2000". This is expressed so as to appear "inclusive". By that I mean that it is not expressed so as to exclude either of those days, a year apart, as part of the period of incapacity. At the same time the Comsuper benefit application form cites the "cessation date" as 13 September 1999. The natural interpretation applicable to such an entry is that Mr Aboushadi was employed during the day of 13 September 1999 and completed employment on that day, either at the normal knocking-off time or at a moment before midnight at the transition from 13 to 14 September 1999.' 21 At para 19, Mr Sassella said he could not discern any ambiguity in the terms of the consent order. He said that 'by agreement, Mr Aboushadi was incapacitated from immediately after midnight on 13 September 1999 until the end of the day on 13 September 2000'. 22 Mr Sassella then referred to a submission that he attributed to Mr Leo Grey, counsel for Mr Aboushadi. He summarised that submission at para 15(d) of his reasons in these terms: 'The decision-makers for Telstra had acted in a peremptory fashion in proceeding to find that s 20 was applicable without referring back to Mr Aboushadi before doing so. They did this despite several letters from Mr Aboushadi's solicitors arguing that s 19 was the applicable section. These solicitor's letters had never been answered. The Telstra decision-makers should have contemplated a reconsideration on own motion of the tribunal's s 42C decision if they considered that the literal terms of the consent decision were flawed in that they so disadvantaged Mr Aboushadi.' 23 After making some comments about issue estoppel, Mr Sassella said at paras 21 to 22 of his reasons: 'I find from these considerations that the consent decision was not ambiguous on its face but that, by the time Telstra's decision-makers came to consider it in the process of making the decisions that led to the present application, they had additional information in the form of several letters from Mr Aboushadi's solicitors and information about Mr Aboushadi's superannuation status that were not available when the consent terms were drafted. While Telstra's decision-makers made no legal error in acting as they did, it would have been preferable if they had considered whether a reconsideration on own motion of the consent decision was in order so as to ensure that Mr Aboushadi was not disadvantaged by events that had become clear after 26 February 2001. I find that the correct or preferable decision, in accordance with s 43(1)(c)(ii) of the AAT Act, is to set aside the decision under review and remit the matter to the respondent for reconsideration of the rate of incapacity payments payable to Mr Aboushadi during the relevant period in accordance [sic] a tribunal finding that s 19 of the Act applies on the basis that Mr Aboushadi's incapacity for work and retirement coincided in time at 4.51 pm on 13 September 1999. I am conscious that s 19 contains provisions governing the assessment of an incapacity payment relating to part of a week. That should facilitate assessment of the payment attributable to the day of 13 September 1999.' 24 Mr Sassella, at para 23, expressed his conclusion in this way: 'I have decided that the decision under review was not the correct or preferable decision. I consider that it would have been preferable for the delegates involved to reconsider the decision they were implementing, taking account of the additional information in their possession. This should have resulted in Mr Aboushadi's incapacity payments being assessed under s 19 rather than s 20 of the Act.' Arguments on appeal 25 Mr N Polin, counsel for Telstra, argued that, on the basis of his findings of fact, Mr Sassella should have affirmed the decision under review. Mr Polin said it was not open to the Tribunal to resolve the application then under consideration by determining that Telstra's decision-makers should have reconsidered the terms of the February 2001 consent orders. He recognised that s 62 of the Act empowers a determining authority, on its own motion, to reconsider a determination made by it under certain sections of the Act, including both s 19 and s 20, but he contended this power does not extend to enabling the determining authority to reconsider orders made by the Tribunal. 26 Mr Grey did not rely on s 62 of the Act, nor did he argue that the Tribunal was entitled, in determining the later application for review, to interfere with the consent orders made in respect of the earlier application. He argued that Mr Sassella merely considered what those orders were intended to achieve. Alternatively, he said, on the proper interpretation of consent order 1(b) and, having regard to the Tribunal's factual findings, the Tribunal's order was correct; therefore, the appeal should be dismissed. 27 Prior to the hearing before me, Mr Aboushadi's solicitors had filed a notice of contention in which it was stated that 'on the proper construction of the determination [that is, order 1(b) of the consent order], the period of incapacity commenced immediately after midnight on 14 September 1999'. In oral argument, it quickly emerged that this was intended to refer to midnight on the evening that spanned 13 and 14 September; that is, immediately after the end of 13 September. Discussion 28 I think it is clear that Mr Sassella was not entitled to resolve the application then before him in the way he did. When the Tribunal exercises its jurisdiction to review an administrative decision, it stands in the shoes of the person who made that decision for all purposes related to the making of that decision, but only for those purposes. The Tribunal does not take on all the powers enjoyed by the decision-maker. 29 Section 43(1) of the AAT Act provides as follows: 'For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing: (a) affirming the decision under review; (b) varying the decision under review; or (c) setting aside the decision under review and: (i) making a decision in substitution for the decision so set aside; or (ii) remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal.' 30 This subsection was considered by a Full Court of this Court in Fletcher v Commissioner of Taxation (1988) 19 FCR 442 ('Fletcher'). That was a case in which taxpayers sought Tribunal review of decisions by the Commissioner of Taxation disallowing their objections to income tax assessments that rejected certain deductions claimed by them. The Commissioner ruled that certain moneys admittedly paid by the taxpayers were not deductible from income tax pursuant to s 51 of the Income Tax Assessment Act 1936 (Cth) ('the Tax Act'). Before the Tribunal, the Commissioner also put alternative arguments: that the relevant transactions were shams, fiscal nullity, and that the interest payments were caught by s 82KH(1) of the Tax Act and therefore made non-deductible by s 82KL. The Commissioner did not rely on Part IVA of the Tax Act, either in deciding to disallow the taxpayers' objections to the original taxation assessments or in argument before the Tribunal. Notwithstanding this, the Tribunal affirmed the assessments by reference to Part IVA of the Tax Act. On appeal, the applicants contended the Tribunal had no power to take that course. 31 At 452, the Full Court referred to a comment about s 43 of the AAT Act made by the then President of the Tribunal, Davies J, in Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No 2) (1981) 3 ALD 88 at 92. Davies J said that s 43 'extends the authority of the Tribunal so that it may more adequately exercise its function of reviewing on the merits the subject decision'. The Full Court went on: 'As a matter of principle, it must be correct, as submitted on behalf of [the] applicants, that the powers and discretions referred to by s 43(1) are the powers and discretions vested in the original decision-maker for the purposes of making the decision under review. They do not include any powers and discretions which may be vested in the decision-maker for some other purpose.' 32 Notwithstanding this, the Full Court rejected the applicants' submission that the Tribunal had no power to affirm the assessments by reference to Part IVA of the Tax Act. The reason was that, in fulfilling his statutory duty to determine the taxpayers' objections to the assessments, the Commissioner would have been entitled to decide that Part IVA applied to the contested payments; in reviewing the Commissioner's exercise of that power, the Tribunal had the same entitlement. 33 This result may be contrasted with that reached in Repatriation Commission v O'Brien (1985) 155 CLR 422 ('O'Brien'). The respondent in that case served in the Royal Australian Air Force during the Second World War. He made many claims for benefits under the Repatriation Act 1920 (Cth), some of which were accepted by Repatriation Boards. The accepted claims included one for anxiety hysteria. However, it was determined that his incapacity from this condition was negligible. Subsequently, the respondent made a claim that a recently diagnosed condition of essential hypertension was related to his accepted anxiety hysteria. This claim was rejected by the Repatriation Commission and by the Tribunal on review. However, the Tribunal's decision was set aside by a Full Court of this Court. On further appeal, that decision was itself set aside by majority (Gibbs CJ, Wilson and Dawson JJ; Murphy and Brennan JJ dissenting). The reasons for the variance in judicial opinion are presently immaterial. What is relevant, and important, is the following comment by the majority, in their joint judgment at 429: 'Whether or not the Commission considered it desirable to do so, in our opinion it was not open for these earlier decisions to be reviewed and reversed in the course of considering the respondent's claim based on his hypertension. Neither of these earlier decisions was embraced within the reference to the president of the A.A.T. The A.A.T. therefore had no jurisdiction to review either of those decisions.' 34 It seems to me this comment has direct application to the present case. Whether or not Mr Sassella thought it would be desirable to re-open the terms of the consent orders made on 26 February 2001, it was not open for him to review or vary the terms of those orders in the course of considering Mr Aboushadi's later application for review. 35 There is a fundamental difference in the situations considered in Fletcher and O'Brien. The issue in Fletcher was whether the Tribunal, on an application for review of a particular decision, was armed with all the decision-maker's powers, including powers that had not been used, in relation to that decision. This question was answered affirmatively. The issue in O'Brien was whether the Tribunal had the powers of the decision-maker, not in relation to the decision under review, but in relation to the reopening of earlier decisions by Repatriation Boards which were later thought to be unsatisfactory. That issue was answered in the negative. 36 It is clear that the Tribunal decided the present case upon the basis that its earlier decision, of 26 February 2001, should be revisited. At para 21 of his reasons for decision, Mr Sassella said that: 'While Telstra's decision-makers made no legal error in acting as they did, it would have been preferable if they had considered whether a reconsideration on own motion of the consent decision was in order so as to ensure that Mr Aboushadi was not disadvantaged by events that had become clear after 26 February 2001.' It was because they failed, not only to consider a reconsideration but also to effect a change to the terms of the orders of 26 February 2001, that Mr Sassella felt justified in setting aside the decision under review. Although Mr Sassella did not express himself this way, his essential reasoning was that the 26 February 2001 orders were unduly disadvantageous to Mr Aboushadi and, therefore, should be treated as reading differently from what they 'unambiguously' said. 37 Sensing the difficulty in supporting the course taken by the Tribunal, Mr Grey placed primary reliance upon a construction argument. He contended that order 1(b) of the consent orders should be read as evidencing an agreement that Mr Aboushadi was incapacitated for work during the period from 13 September 1999 to 13 September 2000; that is, the agreed period of incapacity commenced immediately after midnight on the evening spanning 13 and 14 September 1999. However, Mr Aboushadi retired at the close of business on 13 September 1999; therefore, Mr Grey said, Mr Aboushadi was not incapacitated for work before he retired. 38 I accept Mr Grey's construction of order 1(b). As he said, this order arose out of a compromise between the parties. Mr Aboushadi was pressing a claim for indefinite continuing weekly compensation. Telstra was disputing that he was entitled to any weekly compensation. The evident intention of the parties was to settle the dispute by agreeing that Mr Aboushadi should have weekly payments for one year and no more. That would only be achieved if the period of incapacity was treated as having commenced at the beginning of 14 September 1999 and concluding at the end of 13 September 2000. It seems highly unlikely that the parties would have intended an acknowledged incapacity period of one year and one day, as would be the position if order 1(b) was interpreted as including 13 September 1999. 39 Mr Aboushadi had received sick pay for some of his time off work before retirement on 13 September 1999. If so, he would presumably have been disadvantaged by any part of the agreed twelve months being ascribed to that time. He would have been obliged to refund the sick pay. On the other hand, as he had retired on 13 September 1999, and had not thereafter received any sick pay, there would be no obligation to make a refund in respect of any part of the agreed twelve months' compensation if it was attributed to the twelve months immediately after 13 September 1999. 40 However, acceptance of Mr Grey's construction of order 1(b) does not necessarily mean that Mr Aboushadi's retirement should be regarded as having preceded his incapacity, as would be necessary for s 19 to apply to the assessment of his weekly payments. Order 1(b) would dictate such a conclusion only if it is properly to be read as constituting an agreement between the parties, for all purposes, that Mr Aboushadi was incapacitated only during the period of twelve months commencing at midnight on the evening of 13-14 September 1999. If, on the other hand, order 1(b) is properly to be read as an agreement by the parties that Mr Aboushadi was incapacitated during that twelve month period, but not necessarily only during that period, the order cannot be regarded as determining the time of commencement of the incapacity. The time of commencement of Mr Aboushadi's incapacity would be left for determination as a matter of fact. That would almost certainly be to Mr Aboushadi's disadvantage. It is improbable that he was incapacitated at midnight on 13 September 1999 but not at close of business that same day. 41 My mind has fluctuated about the question whether order 1(b) should be treated as a definitive agreed statement about the duration of Mr Aboushadi's incapacity. If that had been intended, it would have been easy for the counsel who drafted the order to add a word such as 'only'. The lack of such a word makes it possible to read order 1(b) as an agreed statement that Mr Aboushadi suffered incapacity during a particular twelve month period without there being any agreement that the incapacity was confined to that period. 42 During the course of oral argument, I asked Mr Grey whether there was anything in the material before me which cast light on what the parties were intending to achieve by order 1(b). He was unable to point to any relevant document. 43 Mr Grey agreed that the consent orders made no reference to the section of the Act under which the weekly payments would be calculated. He said this was because 'on the face of it the document appeared to achieve that end'. He explained: 'On the face of it that document when construed properly places the incapacity starting after the retirement. There was no issue between the parties. Certainly we didn't think of this, your Honour as far as I am aware, I certainly didn't and I don't think my opponent did of the concept that there could be a notion of incapacity predating the time that was agreed that could affect the application of the consent determination. I am very certain and I and my opponent thought incapacity for the purposes of the Act starts on the day we agree and not before.' 44 As will be apparent, Mr Grey appeared for Mr Aboushadi at the Tribunal hearing of 26 February 2001. Mr Polin did not appear that day but the counsel who did appear for Telstra happened to be in court when Mr Grey made this statement. Despite that circumstance, Mr Polin did not challenge Mr Grey's assertion about the state of mind of himself and his opponent. 45 It would have been much preferable for the parties' intention to have been put beyond doubt by the agreed form of order. It is unsatisfactory to be asked to decide the parties' intentions by reference to assertions as to counsel's state of mind. Nonetheless, I am prepared to take that course in this case. 46 Having regard to Mr Grey's unrefuted assertion, I will construe order 1(b) as expressing an agreement, whatever may have been the position in actual fact, that for the purposes of assessing the compensation payable to Mr Aboushadi under the Act, the duration of his period of incapacity is to be taken as having been from the commencement of 14 September 1999 to the end of 13 September 2000 and no more. On that basis, Mr Aboushadi's retirement took effect prior to the commencement of his incapacity. Consequently, s 19, rather than s 20 of the Act, applies to the assessment of his compensation. 47 It follows that Mr Sassella's actual conclusion was correct, even though he reached that conclusion by an impermissible route. Disposition 48 It is necessary to vary Mr Sassella's decision so as to refer to the incapacity commencing immediately after midnight on the evening of 13-14 September 1999, rather than at 4.51 pm on 13 September 1999. Subject to that variation, the appeal should be dismissed with costs. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.