Commissioner of Superannuation v Thomas Jones Trimnell [1993] FCA 649 (23 December 1993)

FEDERAL COURT OF AUSTRALIA

COMMISSIONER FOR SUPERANNUATION v. THOMAS JONES TRIMNELL
No. VG362 of 1992
FED No. 1012/93
Number of pages - 9
Superannuation

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
OLNEY J

CATCHWORDS

Superannuation - Commonwealth - Deemed invalidity - eligible employee terminating employment by resignation - employee unfit for duties of substantive position - employee directed to perform other duties - whether Commissioner should have regard to duties of substantive position in determining employee's capacity to perform his duties - meaning of "his duties".

Superannuation Act 1976 (s 7(2))

Public Service Act 1976, s 10

Public Service Regulations, r 32

Commissioner for Superannuation v Hastings (1986) 70 ALR 625.

HEARING

MELBOURNE, 8 November 1993
23:12:1993

Mr T. Ginnane (instructed by Australian Government Solicitor) appeared for the applicant.

Mr M. McInnes (instructed by Minter Ellison Morris Fletcher) appeared for the respondent.

ORDER

The Court Orders that:
1. The appeal be allowed.
2. The decision of the Administrative Appeals Tribunal made in matter V 91/413 on 28 August 1992 be set aside.
3. The matter be remitted to the Tribunal to be heard and decided again.
4. The hearing of further evidence be in the discretion of the Tribunal.
5. The applicant have liberty to apply on the question of costs.
AND CERTIFIES PURSUANT TO SECTION 6 OF THE FEDERAL PROCEEDINGS (COSTS) ACT 1981 THAT:
6. In the opinion of the Court, it would be appropriate for the Attorney-General to authorize a payment under the Act to the respondent in respect of -
(a) the costs incured by the respondent in relation to the appeal; and
(b) any costs incurred by an appellant in relation to the appeal that have been, may hereafter be, or are required to be, paid by the respondent to the appellant in pursuance of an order of the Court not being costs to which a costs certificate granted under Section 7 relates.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

OLNEY J The respondent was an officer of the Australian Public Service until he resigned on 10 October 1980. At the time of his resignation he was an "eligible employee" as defined by s 3(1) of the Superannuation Act 1976 (Commonwealth). On 12 March 1986 he sought a direction from the applicant (the Commissioner) that he (the respondent) be deemed to have been retired on the ground of physical or mental incapacity to perform his duties, such application being made pursuant to s 7(2) of the Superannuation Act. On 5 August 1987 the Commissioner refused the direction sought. The refusal was confirmed upon reconsideration by the Commissioner's delegate.

2. On 9 May 1991 the respondent applied to the Administrative Appeals Tribunal (the Tribunal) for review of the decision on reconsideration. The review application was heard by the Tribunal on 27 and 28 February 1992 and on 28 August 1992 the Tribunal set aside the Commissioner's decision and directed that the respondent be deemed for the purposes of the Superannuation Act to have been retired on the grounds of mental incapacity. The respondent has appealed to this Court against the Tribunal's decision on a question of law pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1976 (the AAT Act). The appeal was heard on 8 November 1993.

3. At the relevant time s 7(2) of the Superannuation Act provided:
7(2) Where a person has, before attaining his maximum retiring

age, ceased to be an eligible employee otherwise than by reason
of death or by reason of his having been retired, or his
services having been otherwise terminated, on the ground of
physical or mental incapacity to perform his duties, but the
Commissioner is satisfied that, at the time he ceased to be an
eligible employee, he was, by reason of physical or mental
incapacity, unfit to perform his duties, the Commissioner may
direct that the person shall, for the purposes of this Act, be
deemed to have been retired on the ground of that physical or
mental incapacity.

4. The question of law which arises in this appeal has to do with whether upon the proper construction of s 7(2), in its application to the facts of this case, the term "his duties" in the phrase "unfit to perform his duties" refers to the duties of the substantive office held by the eligible employee at the time his employment was terminated, or to the duties he was then required to perform.

5. The Tribunal found that on 10 October 1980 the respondent was unfit to perform the duties of the office of field officer grade 3 which is the position he held at the date of his resignation. It did not consider whether he had the capacity to perform the duties of a clerical assistant grade 3, the position to which the respondent had been assigned since 14 May 1980. The Tribunal was of the opinion that the respondent's "duties" at the relevant time were those of a field officer. The Commissioner on the other hand, had considered the respondent's request under s 7(2) (incorrectly in the Tribunal's opinion) on the basis that his "duties" were those of a clerical assistant.

6. The questions of law raised on the appeal are stated in the notice of appeal, thus:

1. Whether the expression 'incapacity to perform his duties' in
subsections 7(1) and 7(2) of the Superannuation Act 1976 ("the
Act") refers to the duties actually assigned to and performed
by an eligible employee as at the date of his retirement or
resignation, or whether that expression refers to the general
duties of his office or position.
2. Whether the duties assigned to and performed by an eligible
employee at the date of his retirement or resignation are
required to be taken into account by the decision maker in
assessing whether the employee was incapable of performing his
duties at the relevant date.
3. Whether in exercising the discretion in sub-section 7(2) of
the Act the decision maker is required to take into account the
duties actually assigned to and performed by an eligible
employee at the date of his retirement or resignation.
4. Whether in exercising the discretion in sub-section 7(2) of
the Act, the decision maker is required to consider whether an
eligible employee is, at the date of his resignation or
retirement, able to perform other duties.

7. The grounds of appeal relied upon by the Commissioner are:

1. The Tribunal erred in law in deciding that the expression
'incapacity to perform his duties' referred to the respondent's
work as a field officer and not to the clerical work he was
actually performing prior to his resignation.
2. The Tribunal erred in law in finding that at the date of the
respondent's resignation he was incapable of performing his
duties.
3. The Tribunal erred in law in failing to take into account a
relevant consideration, namely the nature of the actual duties
assigned to and performed by the respondent at the date of his
resignation and whether he was capable of performing those
duties as at that date.
4. The Tribunal erred in the exercise of its discretion under
sub-section 7(2) of the Act, in that it failed to take into
account a relevant consideration, namely the actual duties
assigned to and performed by the respondent at the date of his
resignation.
5. In the alternative, the Tribunal erred in the exercise of
its discretion under sub-section 7(2) of the Act in that it
failed to consider whether the respondent was capable of
performing clerical duties at the date of his resignation.

8. The short facts of the case are these. The respondent was born on 23 August 1935. He commenced employment with the Department of Social Security on 14 July 1959 at Hamilton in Victoria. Initially he was employed as a clerk but in the late 1960's he became a field officer and by 1979 held the office of Field Officer Grade 3 and was responsible for the efficient functioning of the field office section at Hamilton. In 1979 he sought medical advice in relation to problems he was then experiencing and was placed on anti-depressant medication. From February 1979 until May 1980 he was absent from work on sick leave. He resumed work on 14 May 1980 at the direction of the personnel officer. The department considered him to be fit for duty on the basis of significantly reduced responsibility. He was assigned to duties which equated with those of a clerical assistant grade 3. His salary remained at his substantive level which was equivalent to the salary of a clerical assistant grade 6. On 17 July 1980 the acting regional manager at Hamilton reported that he was carrying out his duties in a most capable manner. The respondent was on sick leave from 22 September 1980 to 2 October 1980 for "nerves and stress disorder" and from 3 October 1980 to 9 October 1980 for "nerves, anxiety depression, skin disorder". On 9 October 1980 he tendered his resignation, which became effective on 10 October 1980.

9. The Tribunal approached the issue of what were the respondent's duties at the date of his resignation by considering, and making findings as to the position he held at that time. At p 13 of its reasons (appeal book p 371) the Tribunal said:

That the applicant performed duties equal to those of a
clerical assistant grade 3 when he returned to work in May 1980
is not in issue. Clearly he did. Whether that was the position
he held at the date he resigned is another issue.

10. The Tribunal then proceeded to deal with some intra-departmental correspondence and a memorandum dated 19 September 1980 in which the regional manager at Hamilton was advised that the respondent would occupy a field officer grade 2 position on a trial basis until 31 October 1980. The Tribunal found that the decision to return the respondent to a field officer grade 2 position for a trial period was not divulged to the respondent who was on sick leave from 22 September 1980 until he resigned. In this context the Tribunal continued (Reasons pp 14-15; AB pp 372-3):

While there was no evidence as to the implementation of the
instruction it should also be borne in mind that the applicant
was, according to department records, on sick leave from 22
September 1980 until he resigned. Had he not been on sick
leave, it seems reasonable to infer that in the terms of the
memorandum, he would have been some way through the trial
period as a field officer. In view of the above, and
notwithstanding a degree of inconclusiveness about the
evidence, it does not seem to us that the applicant held the
position of a clerical officer at the date he resigned.
We are therefore not satisfied that the words "his duties" can
properly refer to the position of a clerical officer as at the
date the applicant resigned. In our opinion, applying what was
said in Hastings, his duties at the relevant date were those of
a field officer. The Commissioner in considering the
applicant's request under s 7(2) proceeded on the basis,
incorrectly in our view, that "his duties" were those of a
clerical officer.

11. The reference above to the case of Hastings is to the decision of the Full Court of the Federal Court (Woodward, Keely and Wilcox JJ) om Commissioner for Superannuation v Hastings 70 ALR 625. Further reference to this authority will be made later.

12. At the relevant time, s 10 of the Public Service Act 1973 (Commonwealth) provided that the persons who occupied the offices in the several departments referred to in the schedule and the persons who were unattached officers constituted the Australian Public Service. The term "officer" was at that time defined in s 7(1) to mean a person appointed or transferred to the Australian Public Service. There is no doubt that prior to his resignation the respondent was an officer in the Australian Public Service.

13. The Public Service Regulations made pursuant to the Public Service Act as in force at the relevant time provided in regulation 32:

32. Every officer shall -
(a) during the hours of official business devote himself
exclusively and zealously to the discharge of his public
duties;
(b) behave at all times with courtesy to the public, giving
prompt attention to all reasonable requirements;
(c) obey promptly all instructions given to him by any officer
under whose control or supervision he is placed;
(d) promptly and correctly carry out all duties appertaining to
his office or any other duty he is directed to perform; and
(e) in due course and at proper times comply with, and give
effect to, all enactments, regulations, and authoritative
instructions made or issued for his guidance in the performance
of his duties.

14. Regulation 32(d) distinguishes between the duties appertaining to an officer's office and any other duty he is directed to perform. In the instant case it is clear on the Tribunal's findings that in May 1980 when the respondent resumed work after along period of sick leave he held the office of field officer grade 3 but he was directed to perform certain clerical duties unassociated with the duties of his office. That direction was never countermanded and at all times after 14 May 1980, when not on sick leave or recreational leave, the respondent performed the duties of a clerical officer grade 3.

15. It is my opinion that the Tribunal erred in addressing the question of what office or position the respondent held at the time of his resignation and not the duties he had been directed to perform at that time. Section 7(2) of the Superannuation Act does not refer to the duties of the eligible employee's position or office but rather refers only to his duties which in my opinion must relate to his actual obligation to perform duties at the time his services are terminated.

16. In its reasons the Tribunal relied upon Hastings as supporting its conclusion but I think the contrary is so.

17. The facts in Hastings were that Mr Hastings had been appointed as senior health inspector in the Northern Territory Department of Health and as such became an "eligible employee" within the definition of that term in s 3 of the Superannuation Act. However, his service was thought to be unsatisfactory and his appointment was terminated. Hastings claimed that his appointment had been terminated because of his medical condition and requested the Commissioner to give a direction pursuant to s 7(2) of the Superannuation Act that he be deemed to have been retired on the ground of physical or mental incapacity. The Commissioner declined to so direct. Hastings appealed to the Administrative Appeals Tribunal.

18. Before the Tribunal it was common ground between the parties that at the date of the termination of his services, Hastings was not physically able to perform the duties of a senior health inspector. The Commissioner asserted however that Hastings was fit to perform duties in an alternative classification within the department and that his medical condition was not the reason for his dismissal. For Hastings it was said that once it was conceded or established that he was not fit for work as a senior health inspector the Commissioner was obliged by s 7(2) of the Superannuation Act to deem him to have been retired on the grounds of physical incapacity. The Tribunal accepted the submissions put on behalf of Hastings and the Commissioner appealed to the Federal Court.

19. In considering the meaning of "his duties" in s 7(2) the Full Court said (at p 627):

The submission of the applicant Commissioner is that "his
duties" includes the full range of available duties, so that an
employee can be said to be incapacitated only in a case in
which no suitable work can be found by the employer. In support
of that submission counsel for the applicant draws attention to
the well-known practice of Commonwealth instrumentalities -
which practice finds expression in various legislative
provisions similar in terms to s 49 of the Northern Territory
Act already quoted - to attempt in the first instance to find
for incapacitated employees suitable alternative work,
terminating the services of the employee only when no such work
is available. Counsel contends that an interpretation of "his
duties" which limited the application of those words to the
duties of the position occupied by the employee at the relevant
time would confer an advantage upon an opportunistic employee
who, being unable to cope with those duties, resigned his or
her employment before new duties could be substituted. We agree
that this is a possibility but, as we consider that the
Commissioner has a discretion under s 7(2), it is a matter of
little moment: the Commissioner would be entitled to take into
account those circumstances when considering the proper
exercise of that discretion.

20. It seems to be implicit in the above passage quoted that the Court would have accepted the proposition that if the employee had been assigned new duties prior to his resignation, "his duties" for the purpose of s 7(2) would have been the duties assigned to him.

21. In Hastings the Commissioner placed some reliance on the wording of s 78 of the Superannuation Act in which the phrase "the duties performed by him immediately before his retirement on the ground of invalidity" are used in the context of a section which dealt with the cancellation of pensions. As to this aspect of the argument their Honours said (at pp 628-9):

Section 75 relates to an event which occurs after the
termination of the employment of a person: the restoration, in
whole or in part, of the former employee's health. At that time
the person has no current duties. It would not, therefore, have
been appropriate to use in s 75 the term "his duties". It was
necessary to use a phrase which referred back to the duties
previously performed by the person. It is understandable that
the legislature should have selected as significant the duties
performed immediately before retirement. A phrase such as that
actually used was necessary for that purpose. By contrast, the
need in s 7(2) was to refer to a situation ascertainable at the
date of the actual cessation of employment: retirement or
termination on a ground other than incapacity "to perform his
duties". As the relevant date was one at which the employee
still had duties, it was natural in this context to speak of
"his duties". The difference in terminology between s 7(2) and
s 75 being explained by the differing contexts, no inference of
an intended different meaning should be drawn. Upon analysis, s
75 furnishes no support for the construction of s 7(2) urged on
behalf of the applicant. Indeed, inasmuch as s 75 requires a
consideration of the duties performed by the employee
immediately before his or her retirement - and does not require
any consideration of the duties of other positions to which the
employee might have been transferred immediately before
retirement - it is consistent with the interpretation of s 7(2)
argued on behalf of the respondent.
Counsel for the respondent argues that the term "his duties"
ought to be construed literally, to refer to the duties of the
position held by the person at the relevant date, ie
retirement. There is no warrant, he says, for any extended
meaning and, particularly, for one which would require the
Commissioner to investigate the duties of some alternative
position which might have been, but was not, allocated to the
employee by the employer. We agree. Had it been the intention
of Parliament to have the Commissioner embark upon such an
inquiry, this intention could easily have been stated. Normally
the words "his duties", used in reference to an employee, would
be understood as referring to the duties of the position which
that employee held at the relevant time. We see no warrant for
interpreting them in s 7 in any other way. In relation to the
first point we agree with the view of the Administrative
Appeals Tribunal that "his duties" refers to the respondent's
duties as senior health inspector.

22. The Full Court's statement that "normally the words "his duties", used in reference to an employee, would be understood as referring to the duties of the position which that employee held at the relevant time" was made in the context of a case in which the employee was, at the relevant time, performing the duties of the position to which he had been appointed and for which it was conceded he was not physically fit. But that case is not this case. In the case now before the Court the employee had been assigned alternative duties different from the duties which attached to the substantive position to which he had been appointed. This is not a case in which the Commissioner asserts that there are other as yet unidentified duties which the employee could perform if he was assigned to them (as was the case in Hastings) but rather it is a case in which the employee had been assigned and had been performing alternative duties. The only duties the respondent was obliged to perform immediately before his resignation were the duties of a clerical assistant grade 3. Indeed, in its consideration of s 75 the Full Court actually equated the meaning of "his duties" in s 7(2) with the duties performed by the employee immediately before his retirement rather than the duties of other positions to which the employee might have been transferred immediately before his retirement.

23. In my opinion, a proper reading of the reasons in Hastings required the Tribunal in the present case to direct its attention to the duties the respondent had been required to perform immediately before his resignation. To the extent that the Tribunal construed s 7(2) as not requiring such an enquiry it erred in law.

24. By reason of the approach it adopted, the Tribunal deliberately refrained from making any finding as to the respondent's capacity to perform the duties of a clerical assistant class 3. This is not a case in which it can be said that on the evidence adduced before the Tribunal only one finding is open on that question. The question needs to be considered by the fact finding tribunal and accordingly it is appropriate that the matter be remitted to the Tribunal to be heard and decided again. In view of the different basis upon which the case will have to be decided, the Tribunal's approach to the exercise of the Commissioner's discretion may have to be different in the event that it is found that the respondent was unfit to perform the duties to which he had been assigned immediately before his resignation.

25. The appeal will be allowed and the matter remitted to the Tribunal to be heard and decided again.