Re Australian Telecommunications Corporation v Daniel Moffat [1992] FCA 27 (6 February 1992)

FEDERAL COURT OF AUSTRALIA

Re: AUSTRALIAN TELECOMMUNICATIONS CORPORATION
And: DANIEL MOFFAT
No. WA G11 of 1992
FED No. 30
Practice and Procedure - Worker's Compensation

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)

CATCHWORDS

Practice and Procedure - Administrative Appeals Tribunal - appeal - application for stay - decision requiring assessment and payment of employee's compensation - criteria for grant of stay - partial stay granted.

Worker's Compensation - Commonwealth Employee - injury to employee - mesothelioma sufferer - Australian Telecommunications Corporation - found liable to pay compensation - by Administrative Appeals Tribunal - direction to assess impairment within 3 days - whether consistent with statutory guidelines - application for stay - possibility of interim compensation order - partial stay ordered.

Administrative Appeals Tribunal Act 1975 s.44A

Commonwealth Employee's Rehabilitation and Compensation Act 1988 s.14, s.101, ss. 102, 103, 104, s.28

The Commissioner of Taxation of the Commonwealth of Australia v The Myer Emporium Limited (No. 1) [1986] HCA 13; (1986) 160 CLR 220

Commissioner for Superannuation v Hastings (1986) 5 AAR 197

HEARING

PERTH
6:2:1992

Counsel for the Applicant: Mr R. Walton and Mr M. Sonter

Solicitors for the Applicant: Downing and Downing

Counsel for the Respondent: Mr W. Martin

Solicitors for the Respondent: Slater and Gordon

ORDER

The time limited for hearing the motion is abridged in order to enable to be dealt with it today.

The decision of the Administrative Appeals Tribunal made on 10 January 1992 be stayed until the determination of this appeal or further order to the extent that it would require the payment to the respondent of compensation exceeding $15,000.

There be liberty to the parties to apply on short notice to vary or discharge the preceding order.

The motion be otherwise dismissed.

The applicant is to pay the respondent's costs of the motion.
Note: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

The Australian Telecommunications Corporation ("Telecom") moves as a matter of urgency for a stay under s.44A of the Administrative Appeals Tribunal Act 1975 of proceedings pursuant to a decision of the Tribunal given on 10 January 1992 and certain supplementary orders made yesterday, 5 February 1992. An appeal to the Court against the Tribunal's decision was instituted on 4 February 1992. By its decision the Tribunal held that the disease, mesothelioma, from which the respondent, Mr Moffat, suffers is a disease suffered by him as an employee which was contributed to in a material degree by his employment with Telecom. The Tribunal also decided that the disease is an injury within the meaning of s.14 of the Commonwealth Employees' Rehabilitation and Compensation Act 1988 ("the Act") and that it has resulted in impairment. It found that Telecom is liable to pay compensation to Mr Moffat from 14 August 1990 and remitted the matter to Telecom to calculate his entitlements from the date of the determination under review in the light of the Tribunal's decision and in accordance with the provisions of the Act. Both parties were given liberty to apply in respect of the calculation of entitlements and an order was made that Telecom pay Mr Moffat's costs to be agreed or taxed.

2. On 5 February 1992 the Tribunal made further orders to the following effect:

1. (Telecom) ensure that the required impairment assessment
documents are delivered to the solicitors for the applicant
forthwith.
2. (Telecom) shall calculate the applicant's entitlements as
directed in Order 4 made on 10 January 1992 within three
days of receiving the completed impairment assessment
documents from the applicant.
3. Both parties are granted liberty to apply in respect of
the calculation of the entitlements.
4. (Telecom) shall pay the costs of this application.

Telecom applies for a stay of the Tribunal's order pending the hearing and determination of the appeal on two bases:

1. That Mr Moffat is impecunious and should the appeal
succeed there is a risk that any payment made under the
Tribunal's order will not be recoverable.
2. That because of legal requirements to apply statutory
guidelines to the assessment process it is not possible
to calculate the entitlements within three days of
receiving completed impairment assessment documents as
ordered on 5 February 1992.

3. In support of the motion Telecom filed two affidavits sworn by Gary Ronald Clifton, who is the Manager-Risk Management of its Residential Division. Mr Clifton contends that he has received legal advice to the effect that an appeal against the Tribunal's decision has good prospects of success. He also says that he has reason to believe that Mr Moffat is impecunious and that if the determination of the Tribunal is allowed to stand, he would be entitled to receive a substantial amount of money. Counsel for Telecom estimated from the bar table a range of $20,000 to $50,000. Mr Clifton is concerned that moneys paid over to Mr Moffat in accordance with the Tribunal's determination would be irrecoverable if the appeal were to succeed.

4. By a supplementary affidavit filed in Court today, Mr Clifton set out the orders made by the Tribunal yesterday and indicated that he had seen copy correspondence from the Department of Social Security indicating that Mr Moffat is in receipt of a pension. Given that Mr Moffat is aged less than 65 years he offered the conclusion that the pension is not an age pension and on that basis Mr Moffat is unable to support himself without a State pension and is impecunious. In the event, it is not in dispute that Mr Moffat is in receipt of an invalid pension.

5. Mr Clifton went on to say that pursuant to the order of the Tribunal made 10 January 1992, Telecom is obliged under Pt.2 Div. IV of the Act to make an assessment of the quantum of Mr Moffat's entitlement to compensation for impairment. And in making that assessment the Corporation is obliged by s.28 to follow a "Guide to the Assessment of the Degree of Permanent Impairment" ("the Guide") prepared by the Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees and approved by the Minister. According to Mr Clifton the Guide requires that a number of steps be taken in the assessment of impairment which includes the arrangement of medical examinations by specialists relevant to the various impairments from which an applicant might suffer.

6. On the basis of evidence set out in a letter of 10 October 1986 from the Industrial Rehabilitation Service that Mr Moffat has a history of high blood pressure, associated cardiovascular problems and a gastroduodenal ulcer, it would be necessary to engage specialists in relation to those different conditions. Having regard to the requirements of the Guide and these practical necessities, the three days allowed by the Tribunal for making the determination after return of the impairment documentation would, in his opinion, be insufficient. Counsel for Telecom informed the Court from the bar table that the process of assessment could take about 4 weeks if carried out according to the Guide.

7. An affidavit sworn by Mr Moffat's solicitor, Mr Gordon, which had been filed in the Tribunal on 4 February 1992, was handed up by his counsel and received in evidence. Mr Gordon said that as he had not heard from Telecom following the Tribunal's decision he wrote to its solicitors setting out what he believed to be the basis of Mr Moffat's entitlements and seeking confirmation of them. He telephoned the solicitors the following day and left a message asking to be called in relation to the assessment. By 30 January 1992 he had heard nothing and so made application to the Tribunal for further orders, which application was made returnable on 5 February. On the same day he was informed by Mr Moffat that his invalid pension had not been paid into his bank account as usual. He had received no moneys from Telecom. Mr Gordon contacted the Department of Social Security who advised that the invalid pension had been stopped upon advice from Telecom that Mr Moffat was in receipt of compensation. The date of that advice to the Department was said to have been 17 January 1992. Mr Gordon told the Department that Mr Moffat had not received any compensation, the matter was checked, he was informed that there had been an error and that it would be remedied the following day. By 3 February the pension cheque had still not arrived and Mr Moffat was informed by the Department that the cheque had not been mailed as his entitlement was being assessed on account of his receipt of compensation. Mr Gordon again contacted the Department and was told that it appeared that there had been another error.

8. On 29 January 1992, Mr Gordon was informed by Dr. Norcott, Mr Moffat's attending doctor, that he estimated Mr Moffat's life expectancy at between 4 and 8 weeks. Mr Moffat has expressed a wish to resolve the question of his compensation entitlements as long as possible before his death so that he may enjoy even to the limited extent possible the benefits of compensation which he first sought in March 1991 and may ensure that whatever compensation he receives is secured for the benefit of his wife after his death.
Statutory Framework

9. The liability to pay compensation for injuries arises under s.14(1) of the Commonwealth Employees' Rehabilitation and Compensation Act 1988 which provides:

"14(1) Subject to this Part, the Commission 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."

Where an injury to an employee results in death and the employee dies leaving dependents, some or all of whom were at the date of the employee's death wholly dependent on the employee, the Commission is liable to pay compensation in respect of the injury of $120,000 and that compensation is payable to or in accordance with the directions of the Commission for the benefit of all those dependents. In the present case the entitlement determined by the Tribunal is the entitlement to compensation on the part of the employee.

10. The liability of the Commission is applied to administering authorities by virtue of s.101 which provides, inter alia:
"101(1) The Minister may, by notice in writing,

declare a Commonwealth authority specified in the
notice to be an administering authority.
(2) Where the Minister declares a Commonwealth
authority to be an administering authority:
(a) any liability of the Commission to pay
compensation or make any other payment
under this Act in respect of an injury,
loss or damage suffered by an employee of
the authority, or in respect of the death
of such an employee, being a liability
that had not been discharged before the
day on which the declaration takes effect,
shall, by force of this subsection, vest
in the authority on that day."

The Court has been informed from the bar table by counsel for Telecom that it is an administering authority for the purposes of the Act. Section 102 of the Act provides, inter alia, that an administering authority has certain specified functions in addition to its other functions under the Act which include:

"(a) to make determinations accurately and
quickly in relation to claims and requests
made to it under this Act;"

Section 103 confers on the authority:

"...power to do all things necessary or convenient to
be done for, or in connection with, the performance of
its functions under this Act."

And in s.104 it is provided:

"104. In performing the function referred to in
paragraph 102(a), the administering authority:
(a) shall be guided by equity, good conscience
and the substantial merits of the case,
without regard to technicalities;
(b) is not required to conduct a hearing; and
(c) is not bound by the rules of evidence."

Section 28(1) of the Act provides that:

"The Commission may, from time to time, prepare a
written document, to be called the "Guide to the
Assessment of the Degree of Permanent Impairment"
setting out:
(a) criteria by reference to which the degree
of the permanent impairment of an employee
resulting from an injury shall be determined;
(b) criteria by reference to which the degree
of non-economic loss suffered by an
employee as a result of an injury or
impairment shall be determined; and
(c) methods by which the degree of permanent
impairment and the degree of non-economic
loss, as determined under those criteria,
shall be expressed as a percentage."

11. By s.28(3) a document prepared by the Commission under sub-s.(1) has no force or effect unless and until approved by the Minister. Sub-section (7) requires that when a document so prepared has been approved by the Minister, the Commission shall cause copies of it to be laid before each House of Parliament within 15 sitting days of that House after the Minister receives the copies. Sub-section 28(8) requires that the Commission shall make copies of the Guide approved by the Minister and of any variation to that Guide available upon application by a person and payment of the prescribed fee (if any). Importantly, sub-s.28(4) provides:

"28(4) Where the Commission, an administering authority or the
Administrative Appeals Tribunal is required to assess or
re-assess, or review the assessment or re-assessment of the
degree of permanent impairment of an employee resulting from an
injury, or the degree of non-economic loss suffered by an
employee, the provisions of the approved Guide are binding on
the Commission, the administering authority or the
Administrative Appeals Tribunal, as the case may be, in the
carrying out of that assessment, re-assessment or review, and
the assessment, re-assessment or review shall be made under
the relevant provisions of the approved Guide."

12. The power of this Court to grant a stay of orders made by the Tribunal is conferred by s.44A of the Administrative Appeals Tribunal Act which provides:
"44A(1) Subject to this section, the institution of an

appeal to the Federal Court of Australia from a
decision of the Tribunal does not affect the operation
of the decision or prevent the taking of action to
implement the decision.
(2) Where an appeal is instituted in the Federal
Court of Australia from a decision of the Tribunal,
that Court or a Judge of that Court may make such
order or orders staying or otherwise affecting the
operation or implementation of either or both the following:
(a) the decision of the Tribunal or a part of
that decision; and
(b) the decision to which the proceeding
before the Tribunal related or a part of
that decision;
as that Court or Judge considers appropriate for the
purpose of securing the effectiveness of the hearing
and determination of the appeal."

13. Sub-section (3) relates to the variation or revocation of such orders and sub-s.(4) provides:

"An order in force under subsection (2) (including an
order that has previously been varied on one or more
occasions under subsection (3)):
(a) is subject to such conditions as are
specified in the order; and
(b) has effect until:
(i) where a period for the operation of the order is
specified in the order - the expiration of that
period, or if a decision is given on the appeal
before the expiration of that period, the giving
of the decision; or
(ii) where no period is so specified - the giving of a
decision on the appeal."

The Approved Guide

14. A Guide to Assessment of the Degree of Permanent Impairment was published in 1989 by the Commission. In the introduction it provides, inter alia, that the degree of permanent impairment and the degree of non-economic loss are to be determined under the provisions of the Guide and that it is binding on Comcare, administering authorities and the Administrative Appeals Tribunal. It is also stated that:

"An interim payment of compensation for permanent
impairment can be awarded where Comcare is satisfied
that an impairment is indisputably permanent and
cannot be reduced and the degree of impairment is
equal to or more than 10% but cannot be finally
assessed. When a final assessment is made Comcare
will make a further payment of the difference, if any,
between the final assessment and the interim award."

This reflects the provisions of ss.24 and 25 of the Act.

15. Mr Clifton in his supplementary affidavit said that the Guide required that the following steps be taken:

"(i) The claimant provide medical information provided by a
treating doctor of the claimant and that the claimant
complete a form dealing with matters relevant to the
assessment of impairment.
(ii) Upon receipt of the form, the delegate assessing the
claim has to take into account factors including ("the
screening procedure"):-
(a) whether the impairment is permanent;
(b) where there is in fact an impairment and if so,
whether the degree of that impairment would
possibly satisfy the 10% threshold set out in
Section 24 of the Act;
(c) the duration of the impairment;...
(d) the likelihood of improvement in the condition."

He went on to say that the Guide provides that once the screening procedure referred to above has been attended to the delegate must proceed to assess entitlement under, inter alia, s.24 (which involves the arrangement of a specialist examination). Steps which must be followed when arranging the assessment include the identification of appropriate specialities and appropriate Guide Tables. Examination by more than one specialist will be necessary in some cases of multiple impairment. He also exhibited to his affidavit what he said was a true copy of a portion of p 85 of the Guide dealing with the question of employment relationship which must be taken into account. The paragraph exhibited was in the following terms:

"Employment relationship.
There must be a relationship between employment and
the impairment. If the employee's impairment is
entirely attributable to a pre-existing or underlying
condition, or to the natural progression of such a
condition the assessment for permanent impairment
should be nil. Where it is possible to isolate the
compensable effects of an injury upon a pre-existing
or underlying condition, the assessment of the degree
of permanent impairment should reflect only the
impairment due to those compensable effects. Where a
work related aggravation exists, an assessment should
not be made unless the affects of such an aggravation
are considered permanent."

16. During the hearing of the motion the Court asked to be provided with a copy of the Guide. It was provided with a copy of what appeared to be a draft. Counsel for Telecom was asked to provide a copy of the Guide as approved by the Minister. After the Court rose following argument, a copy was made available. Neither the paragraph referred to in the affidavit of Mr Clifton nor the other steps which he says are required appear in the Guide. It may be the case, that he has mistakenly operated from a draft or from some internal Telecom manual.
Whether a Stay Should be Granted

17. Counsel for Mr Moffat submitted that on its proper construction, s.44A requires the party moving for a stay to show special circumstances in favour of such an order and that no such circumstances exist in the present case. He submitted that the evidence advanced by Telecom as to Mr Moffat's impecuniosity did not establish anything more than that there was a risk of non-recovery of any payment. A person could receive an invalid pension and still own his own home. Mr Moffat advanced no evidence of his own position in this regard, but it must be borne in mind that the motion was brought on urgently with a notice filed yesterday returnable this morning.

18. In The Commissioner of Taxation of the Commonwealth of Australia v The Myer Emporium Limited (No. 1) [1986] HCA 13; (1986) 160 CLR 220, Dawson J. dealt with an application for a stay under O.70 r.12 of the High Court Rules. The rule provides that unless the court or a judge otherwise orders, neither an application for special leave nor an appeal shall operate as a stay of proceedings. His Honour there said of the rule at p 222:

"It is well established by authority that the
discretion which it confers to order a stay of
proceedings is only to be exercised where special
circumstances exist which justify departure from the
ordinary rule that a successful litigant is entitled
to the fruits of his litigation pending the
determination of any appeal:...Special circumstances
justifying a stay will exist where it is necessary to
prevent the appeal, if successful, from being
nugatory... Generally that will occur when, because of
the respondent's financial state, there is no
reasonable prospect of recovering moneys paid pursuant
to the judgment at first instance. However, special
circumstances are not limited to that situation and
will, I think, exist where for whatever reason, there
is a real risk that it will not be possible for a
successful appellant to be restored substantially to
his former position if the judgment against him is executed."

19. In Commissioner for Superannuation v Hastings (1986) 5 AAR 197, Northrop J. applied those views to s.44A of the Administrative Appeals Tribunal Act notwithstanding its slightly different wording when he said, at 199:

"For present purposes, the relevant provision is that
the Court may make an order staying or otherwise
affecting the operation of the decision of the
Tribunal as the Court or a Judge considers appropriate
for the purpose of securing the effectiveness of the
hearing and determination of the appeal.
In that respect, the Court considers that prima facie,
and I use that expression intentionally, a stay order
should not be made, but that in an appropriate case,
the Court will make an order. Under similar but
differently worded provisions applicable in Supreme
Court proceedings, the Supreme Court of Victoria
constituted by Adam J. in Scarborough v Lew's
Junction Stores Pty Ltd (1963) VR 129, at 130, set out
considerations which are relevant in considering
whether to grant a stay of an appeal in that Court.
Those views were supported by Dawson J. in the case of
Commissioner of Taxation v Myer Emporium [1986] HCA 13; (1986) 60
ALJR 300, at 301. One of the special circumstances
which is relevant is that if the appeal were to be
successful, whether the successful appellant would be
deprived of the fruits of his appeal if a stay of
execution were not granted.
In the present case, the Court is empowered to make
such order as to a stay for the purpose of securing
the effectiveness of the hearing and determination of
the appeal. In my opinion, if there is evidence
supporting the view that if the appeal is successful,
the successful applicant would not be in a position to
recover the money paid to the respondent, the Court
should, in the exercise of its discretion, grant an
order staying the operation of the decision under
appeal or part of that decision. This depends also on
the question of whether the Court is satisfied that
the appeal is not merely a sham."

20. His Honour in that case, being satisfied that there was a serious question to be tried on the appeal and that if moneys were paid over pursuant to the Tribunal's decision there was "a real possibility that the applicant would not be able to recover it from the respondent", he was prepared to grant a partial stay.

21. In the present case, the evidence establishes that Mr Moffat is in receipt of an invalid pension. It says nothing about his asset position and provides no real basis upon which to assess the degree of risk that Telecom might not be able to recover any payment made to him pursuant to the Tribunal's decision if its appeal were successful. Nevertheless, the concept of risk, involving as it does, the weighing up of contingencies based on incomplete information, it is reasonable to conclude that there is some risk of non-recovery in these circumstances.

22. Counsel for Telecom has indicated from the bar table that his client estimates that the assessment process could lead to an entitlement of between $20,000 and $50,000. Assuming that to be correct, there is no reason to suppose that Mr Moffat's reasonable enjoyment of the fruits of the Tribunal's decision in the time said to be left to him, would require expenditure of even the full amount of the lower level of that range. But there may well be a quite legitimate desire to pass on the immediate benefit of the award to members of his family which he would be entitled to do and in which event the amount paid could well be irrecoverable. In my opinion, balancing the interests of the parties as best I can, I consider that I should grant a stay of the implementation of the Tribunal's decision to the extent that it would require payment of a sum in excess of $15,000. Within that framework it may be possible, consistently with the provisions of ss.24 and 25 of the Act and the Guide, for Telecom to make an interim payment virtually immediately.

23. It is clear that the statutory guidelines do not impose the requirements which Telecom contends prevent it from complying with the Tribunal's directions made yesterday. In the absence of any reliable basis for determining the minimum time necessary to make an assessment, I am not prepared to interfere with the Tribunal's direction. That direction would, on the face of it, seem to be supported by the Tribunal's power under s.43(1)(c) to set aside the decision under review and remit it for consideration "in accordance with any directions or recommendations of the Tribunal". It may be however that under the liberty to apply allowed in the Tribunal's direction and in light of the order I have made and any decision that it may take about the payment of interim compensation, Telecom could apply to the Tribunal immediately on proper evidence to vary the time for assessment. I am not saying that it should make such an application. If it does, it may need to demonstrate a greater sense of urgency about the position of Mr Moffat than it has done thus far.