Power v Comcare[1998] FCA 1783 [1998] FCA 16907 (20 November 1998)

Last Updated: 19 April 1999

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW - Administrative Appeals Tribunal makes findings inconsistent with earlier Comcare determinations - whether within the AAT's jurisdiction to do so.

Safety, Rehabilitation and Compensation Act 1988 (Cth), ss 4(1), 14, 24, 25, 27, 43, 44, 61(1), 62, 68, 69, 70, 72.

Administrative Appeals Tribunal Act 1975 (Cth), ss 39, 43, 44, 58.

Australian Postal Corporation v Nguyen (1996) 71 FCR 516, cited.

Civil Aviation Safety Authority v Coburn (1996) 24 AAR 389, cited.

Comcare v Burton (1998) 157 ALR 522, cited.

Comcare v Grimes [1994] FCA 1054; (1994) 50 FCR 60, cited.

Commonwealth of Australia v Sciacca (1988) 17 FCR 476, cited.

De La Cruz v Australian Postal Commission (1997) 73 FCR 204, cited.

Fletcher v Commissioner of Taxation (1988) 19 FCR 442, cited.

Langley v Repatriation Commission [1993] FCA 299; (1993) 43 FCR 194, followed.

Repatriation Commission v O'Brien [1985] HCA 10; (1985) 155 CLR 422, distinguished.

Re Quinn and Australian Postal Corporation (1992) 15 AAR 519, cited.

Sprod v Repatriation Commission (1985) 9 ALN N16, cited.

RONALD LEONARD POWER v COMCARE

NG 97 OF 1998

SACKVILLE J

SYDNEY

20 NOVEMBER, 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 97 of 1998

BETWEEN:	RONALD LEONARD POWER APPLICANT
AND:	COMCARE RESPONDENT

JUDGE:	SACKVILLE J.
DATE:	20 NOVEMBER, 1998
PLACE:	SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicant pay the respondent's costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 97 of 1998

BETWEEN:	RONALD LEONARD POWER APPELLANT
AND:	COMCARE Respondent
JUDGE:	SACKVILLE J.
DATE:	20 NOVEMBER 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

This is an appeal on a question of law from a decision of the Administrative Appeals Tribunal ("AAT"), given on 16 January 1998. The AAT affirmed a determination made by a Review and Appeals Officer of the respondent ("Comcare") that Comcare's liability under the Safety Rehabilitation and Compensation Act 1988 ("SRC Act 1975 "), in respect of the acceleration of the applicant's coronary heart disease, had ceased from 9 March 1995. The present appeal is brought pursuant to s 44 of the Administrative Appeals Act (Cth) ("AAT Act 1920 ").

Legislation

SRC Act

Comcare is established pursuant to s 68 of the SRC Act. Its functions include making "determinations accurately and quickly in relation to claims and requests made to Comcare under this Act": SRC Act, s 69(a). Comcare also has a general power

"to do all things necessary or convenient to be done for, or in connection with, the performance of its functions" (s 70).

Section 72 addresses the manner in which claims are to be determined:

"72. In performing the function referred to in paragraph 69(a), Comcare:
(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."

Part II of the SRC Act provides for compensation to "employees" (including persons employed by the Commonwealth) in a variety of circumstances. Section 14(1) provides as follows:

"14(1) Subject to this Part, 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.

The quantum of periodic compensation payable in respect of injuries resulting in incapacity is determined in accordance with other provisions in Part II of the SRC Act, notably s 19.

The word "injury" is defined to include a "disease": s 4(1). "Disease" is a term defined to mean any ailment or aggravation of an ailment suffered by an employee

"being an ailment or an aggravation that was contributed to in a material degree by the employee's employment by the Commonwealth."

Section 24(1) of the SRC Act provides that Comcare is liable to pay compensation to an employee who has sustained an injury resulting in a permanent impairment. The degree of impairment is to be expressed as a percentage: s 24(6). The compensation is assessed by applying the percentage to the maximum amount of compensation specified in the legislation: s 24(4). Where compensation is payable in respect of an injury resulting in a permanent impairment, Comcare is liable to pay additional compensation for any non-economic loss suffered by the employee as a result of that injury or impairment: s 27(1). The formula for assessing compensation is set out in s 27(2).

Part V of the SRC Act, is headed "Claims for Compensation". Compensation is not payable to a person under the SRC Act unless a claim for compensation is made by or on behalf of the person, in accordance with the statutory requirements: s 54(1). Part V does not provide for Comcare to make a determination on application but, as has been seen, s 69(a) provides for Comcare to make determinations on claims.

Part VI is headed "Reconsideration and Review of Determinations". Section 61(1) provides that, as soon as practicable after a "determination" is made, the person making the determination must serve on the claimant a notice specifying the terms of the determination and the reasons. A "determination" is defined in s 60(1) to mean a determination or decision under any one of a number of sections, including ss 14, 19, 24 and 27, but not s 69(a) or s 20.

Section 62(1) provides as follows:

"62(1) A determining authority may, on its own motion:
(a) reconsider a determination made by it; or
(b) cause such a determination to be reconsidered by a person to whom its power under this section is delegated, being a person other than the person who made, or was involved in the making of, the determination;

whether or not a proceeding has been instituted or completed under this Part in respect of a reviewable decision made in relation to that determination."

Section 62(2) provides that a request to a determining authority (that is, the person making the determination) to reconsider a determination may be made, among others, by the claimant or, if the determination affects the Commonwealth, by the Commonwealth: s 62(2)(a), (b). Section 62(3) requires that a request for reconsideration of a determination shall

"(a) set out the reasons for the request; and
(b) be given to the determining authority within 30 days after the day on which the determination first came to the notice of the person making the request, or within such further period (if any) as the determining authority, either before or after the expiration of that period, allows."

On receipt of a request for reconsideration, the determining authority must cause the determination to be reconsidered by another decision-maker: s 62(4). The person reconsidering the determination may make a decision affirming, revoking or varying the determination: s 64(5). A decision made under s 62 is termed a "reviewable decision": s 60(1). The person making the reviewable decision must serve on the claimant a written notice setting out the terms of and reasons for the decision: s 63.

Application to the AAT for review of a reviewable decision may be made by (among others) the claimant: s 64(1)(a). Sections 66-67 make provision for the conduct of proceedings in the AAT, but they are not relevant to the present case.

AAT Act

The following provisions of the AAT Act are relevant:

"25(1) An enactment may provide that applications may be made to the Tribunal:
(a) for review of decisions made in the exercise of powers conferred by that enactment; or
(b) for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.

...

25(4) The Tribunal has power to review any decision in respect of which application is made to it under any enactment.

...

43(1) For the purposes 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.

...

44(1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding."

The Facts

The applicant was born on 28 September 1942. He has suffered from coronary heart disease and underwent two coronary by-pass operations in February and May 1981. In 1982, he undertook rehabilitation training in clerical work and commenced employment with the Department of Social Security on 27 October 1982.

In November 1988 the applicant was assaulted by a client, suffering back injuries. In August 1991, the applicant was retired from the Department of Social Security, following a continuous period of incapacity from August 1989. He was retired by reason of severe myocardial ischaemia with post-traumatic stress reaction.

In 1990 (the precise date was not made clear in the evidence), Comcare accepted liability under s 14 of the SRC Act to pay compensation to the applicant for his stress disorder and for acceleration of coronary heart disease. It was common ground that the acceptance of liability must have proceeded on the basis that the applicant's work-related stress during his period of employment with the Department of Social Security accelerated or exacerbated his coronary atherosclerosis.

On 12 November 1992, the applicant applied to Comcare for compensation for permanent impairment and for non-economic loss, pursuant to ss 24 and 27 of the SRC Act. His application was based on his back condition, acceleration of coronary artery disease and anxiety and depression. On 12 May 1993, the Comcare delegate determined that the applicant had suffered a permanent impairment as a result of his "compensable injury" and that the degree of impairment was 96 per cent. The compensation payable was $133,783, comprising $96,747 for the impairment, plus $37,036 for non-economic loss. As I understood Mr Johnson, who appeared for Comcare, it was not disputed that the determination was based, in part, on acceptance of the claim that the applicant's coronary artery disease had been aggravated or accelerated by work-related stress.

On 22 March 1995, a Comcare delegate, acting on Comcare's own initiative, determined that

"there is no further liability to pay compensation in respect of the acceleration of coronary artery disease from and including 9 March 1995 as this is the date that Dr Keogh's second report was received."

Dr Keogh is a cardiologist. In her second report she expressed the view, inter alia, that there could have been no causal relationship between the coronary artery disease and the incident in 1988, since coronary artery disease takes a lifetime to develop.

It was common ground that the delegate's decision was made pursuant to Comcare's powers conferred by ss 69(a) and 70 of the SRC Act, there being no express power conferred by the SRC Act to terminate periodic compensation to an employee. Mr Johnson explicitly accepted that the delegate's decision was not a reconsideration of either of the earlier determinations. In other words, the delegate's decision was not made in exercise of the powers conferred by s 62 of the SRC Act. I shall return to this issue later.

On 27 March 1995, the applicant requested Comcare to reconsider the determination made on 22 March 1995. The applicant's request was made pursuant to s 62(2) of the SRC Act. On 7 April 1995, a Review and Appeals Officer made a decision under s 62(5) of the SRC Act. The decision, relevantly, determined that "liability in respect of the acceleration of coronary artery disease cease[d] from 9 March 1995". The decision also rejected certain claims not presently relevant, made by the applicant in respect of other medical conditions.

The applicant subsequently lodged an application to the AAT for review of three reconsideration decisions of a delegate of Comcare. One of these was the reconsideration decision of 7 April 1995.

The AAT's Reasons

The AAT identified the issue before it as follows (par 24):

"whether the Applicant's employment as a field officer with the Department of Social Security in general, and the assault on 15 November 1988 in particular, have continued to aggravate, exacerbate or accelerate his coronary artery condition on and from 9 March 1995, being the date on which the Respondent determined that liability in respect of that condition ceased. The Respondent advised the Tribunal that repayment in respect of the permanent impairment payment is not at issue."

The applicant's case was said to rest on two grounds. First, he claimed that his condition was accelerated, exacerbated or aggravated by his ongoing smoking which was worsened by his conditions of employment. On the evidence, the AAT rejected this claim and no complaint is made about that finding.

Secondly, the applicant claimed that the stress of his work generally, and the stress experienced as a consequence of the assault directly accelerated, exacerbated or aggravated his coronary artery disease, to such an extent that he required laser treatment or a heart transplant.

The AAT commenced its examination of the applicant's second claim this way:

"39. The issue is whether work-related stress generally aggravated or accelerated the Applicant's heart condition. The Tribunal notes its finding above that the Applicant found his work with the Department stressful and that he experienced other significant non work-related stressors. We now turn to consider the medical evidence addressing the progression of the Applicant's heart disease."

The AAT examined the applicant's medical history, paying close attention to the period from 1977, when he experienced his first angina pain, to 1981, when he required five coronary artery grafts and a regraft operation.

The AAT found that, even if the applicant's smoking could be causally linked to his work (which it did not accept), the effect of such smoking on his coronary condition was de minimis. The AAT made the following additional findings:

"58. The Tribunal also finds, in considering all the evidence, including the history of the progress of the Applicant's heart condition and his lack of any acute cardiac episode, that his stressful work during his employment with the Department of Social Security, did not aggravate, accelerate or exacerbate his coronary atherosclerosis. It is likely that the assault incident which caused the Applicant considerable distress also contributed to his angina at that time. After the Applicant ceased work in August 1989 it cannot be established that the Applicant continued to experience angina as a result of that stress. Any ongoing stress experienced by the Applicant after he ceased work which was a result of that incident was of a chronic and not an acute nature, and therefore it would not have contributed to his ongoing and worsening angina. In any event, the issue before the Tribunal is whether the effects of the Applicant's work on his heart condition ceased no later than 9 March 1995. The Tribunal finds that there was no factor about the Applicant's work, relating either directly to stress or indirectly through any exacerbation of his smoking habit, or in any other way, which continued beyond 9 March 1995."

The AAT further found that the applicant's symptoms of angina did not indicate that his underlying coronary disease had been exacerbated or changed in any way. The underlying condition had followed its natural progression.

The AAT accordingly affirmed the decision which terminated Comcare's liability in respect of the acceleration of coronary disease from 9 March 1995.

The Submissions

The applicant argued as follows:

1. The 1990 and 1993 determinations involved acceptance of the applicant's claim that his coronary condition had been aggravated, accelerated or exacerbated by work-related stress during his period of employment with the Department of Social Security.

2. The effect of Repatriation Commission v O'Brien [1985] HCA 10; (1985) 155 CLR 422, was that the AAT was required to consider the application for review on the basis that the determination in 1990 and 1993 were correct. In other words, the AAT was required to proceed on the basis that the applicant's employment with the Department of Social Security had contributed to an acceleration of his coronary artery disease and that the acceleration had contributed to his permanent impairment.

3. The AAT did not proceed on this basis. On the contrary, its determination was based on the finding in par 58 that the applicant's employment did not accelerate his coronary artery disease.

4. This finding directly contradicted the bases of the earlier determination. The AAT had purported to decide an issue that was not open to it to decide. It had therefore fallen into error and its decision was liable to be set aside.

Mr Johnson, who appeared on behalf of Comcare, did not shy away from the approach taken by the AAT. He accepted that the AAT based its decision to terminate Comcare's liability in respect of the acceleration of the applicant's coronary heart disease on the finding, in par 58, that his stressful work during his employment with the Department of Social Security had not aggravated, accelerated or exacerbated his coronary heart disease. In other words, Mr Johnson acknowledged that the AAT found, after considering the applicant's medical history, that there was no causal relationship between his employment and his coronary condition. Mr Johnson submitted that the AAT was entitled to make its decision on this basis, notwithstanding the 1990 and 1993 determinations which (as he conceded) accepted that there was a causal relationship between the applicant's employment and his coronary condition.

Comcare's argument in support of this submission was as follows:

1. Section 43(1) of the AAT Act empowers the AAT to exercise all the powers and discretions conferred on the decision-maker for the purposes of reviewing a decision. These include the wide powers of reconsideration conferred by s 62 of the SRC Act.

2. The role of the AAT is to reach the correct and preferable decision on the material before it. There is a distinction to be drawn between decisions the AAT is permitted to review and evidence it can take into account in the course of reviewing a decision. It could be contrary to the principle of "merits" review to inhibit the AAT in the manner suggested by the applicant.

3. The AAT had recognised that it was required to address whether Comcare continued to be liable to the applicant after 9 March 1995. It did not purport to set aside the earlier decisions made by Comcare. They stood according to their terms. In addressing the correctness of the decision under review, the AAT was entitled to consider the evidence bearing on the relationship, if any, between the applicant's work-related stress and his coronary condition.

4. Since it had been established that decisions of the AAT did not create an issue estoppel (Comcare v Grimes [1994] FCA 1054; (1994) 50 FCR 60, at 64, per Wilcox J), it could hardly be the case that a determination by an original decision-maker could have the effect of an issue estoppel.

5. Repatriation Commission v O'Brien was distinguishable.

The Principal Authorities

The argument focussed on two cases: Repatriation Commission v O'Brien and Langley v Repatriation Commission [1993] FCA 299; (1993) 43 FCR 194 (FC), in which a majority of the Full Court distinguished O'Brien. The applicant relied on O'Brien; the respondent relied on Langley.

Repatriation Commission v O'Brien

The respondent in Repatriation Commission v O'Brien had served in the RAAF during World War II, but not in a theatre of war. In November 1961, the Repatriation Board accepted his "anxiety hysteria" condition as due to war service, but assessed the incapacity as negligible. In 1970, the assessment of his disability in respect of anxiety hysteria was raised from nil to twenty per cent. In 1974, the respondent sought a war pension because of a recently diagnosed condition of essential hypertension which he claimed was related to his accepted disability of anxiety hysteria.

A Repatriation Board rejected the claim in August 1975. In the following four and a half years, the claim was considered on five occasions by the Repatriation Commission. On each occasion, the Commission considered the case on the evidence then before it and rejected the appeal. Each of the first four decisions was the subject of appeal to the War Pensions Entitlement Appeal Tribunal. On the determination of each appeal, the case was returned to the Commission for further consideration.

The Commission's fifth decision was again the subject of an appeal to the War Pensions Entitlement Tribunal (which, before the hearing was replaced by the Repatriation Review Tribunal). During the hearing, the President of the Tribunal invoked s 107VZZB(1) of the Repatriation Act (Cth) ("Repatriation Act 1975 "). This provision empowered the President, if he or she considered that the Commission's decision involved an important principle of general application, to "refer the decision to the President of the Administrative Appeals Tribunal...with a request for a review of that decision". Where the President of the AAT received a request under s 107VZZB(1), he or she was to direct the AAT to review "that decision", in accordance with the AAT Act (Cth). The result of this process was that the President of the AAT directed the AAT to review the five decisions of the Commission.

The AAT affirmed the Commission's decision to disallow O'Brien's claim. The AAT considered the medical evidence and made a number of findings, including the following (at 427)

"5. If the applicant developed or there was aggravated an existing condition of anxiety state during or after the period of his war service, it did not arise out of nor was it aggravated by nor attributable to his war service within the meaning of that expression in the Act, s 100.

...

8. Any stress which may have aggravated the applicant's anxiety neurosis or aggravated or contributed to the development of his condition of hypertension did not arise out of nor was it attributable to his said war service.

9. The applicant's incapacity from his condition of essential hypertension did not arise, was not attributable to and was not aggravated or accelerated by his war service."

A majority of the High Court (Gibbs CJ, Wilson and Dawson JJ; Murphy and Brennan JJ dissenting) held that the AAT had no jurisdiction to review either the 1961 or the 1970 decisions of the Repatriation Board. The majority reasoned as follows (at 428-429):

"We have explained that the first of two basic questions to put in issue by the parties in the AAT hearing was whether the respondent's anxiety neurosis had arisen out of or was attributable to his war service. The fifth finding of the AAT determined this question in favour of the Commission....[W]e consider it to be a surprising conclusion.

...

But in any event, Mr Grieve, counsel for the respondent, takes a more substantial objection to this finding. In his submission, the question of a connexion between the respondent's anxiety neurosis and his war service fell outside the terms of the reference to the AAT and should not have been entertained by it at all. The provisions of s 107vzzb of the Act outline with some precision the circumstances in which a decision of the Commission under review by the Review Tribunal may be referred by the president of that Tribunal to the president of the AAT with a request for a review of that decision by the AAT. Sub-section (8) obliges the president of the AAT upon receipt of such a request, to direct the review, in accordance with the Administrative Appeals Tribunal Act, of the decision which has been referred to him.

In the present case, the reference was confined to the five decisions of the Commission whereby on each occasion the respondent's claim for a war pension based on his essential hypertension was rejected. The decision of a Repatriation Board in November 1961 accepting the respondent's anxiety neurosis as due to war service has never been challenged by way of appeal. The same is true of the decision of a Board in 1970 which raised the assessment of his disability in respect of that neurosis from nil to 20 per cent. 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 AAT. The AAT therefore had no jurisdiction to review either of those decisions: Administrative Appeals Tribunal Act, s 25."

Their Honours considered that their approach was confirmed by the statement of the President of the Review Tribunal, made pursuant to s 107VZZB(7), when referring the matter to the President of the AAT:

"The first important principle of general application that arises in this case is whether, on the medical evidence available in this case concerning the relationship between the Applicant's accepted disability of anxiety hysteria and the subsequent development of hypertension, the Repatriation Commission, on a review of the case where these elements are present, can be satisfied beyond reasonable doubt that there are insufficient grounds for granting the application. (Our emphasis.)"

Their Honours reached the following conclusion:

"It follows that the first of the two basic issues which the parties chose to contest in the AAT was misconceived. It was an issue which the AAT had no power to entertain. The real issue was the connexion, if any, between the accepted disability of anxiety neurosis and the essential hypertension."

Brennan J did not find it necessary to determine whether the AAT was bound by the unreviewed Board decision accepting a condition as being due to war service. However, his Honour said this (at 446-447):

"Had it been necessary to decide the question, it seems to me that there are difficulties in the way of holding that an unreviewed Board decision accepting a condition as being attributable to war service is binding on the AAT when it is reviewing a decision made on a claim in respect of a different condition. No issue estoppel arises, nor does a finding in the later proceedings affect an entitlement flowing from the earlier finding."

The majority decision in Repatriation Commission v O'Brien was applied in very similar circumstances by a Full Court of this Court in Sprod v Repatriation Commission (1985) 9 ALN N16.

Langley v Repatriation Commission

Repatriation Commission v O'Brien was distinguished by a Full Court (Lockhart and Beazley JJ; Spender J dissenting) in Langley v Repatriation Commission [1993] FCA 299; (1993) 43 FCR 194. In Langley, the Repatriation Commission determined in 1984 that the applicant's pancreatitis was war-caused, in that it resulted from alcohol use which in turn was related to a nervous condition arising during war service. The applicant was awarded a disability pension. In 1990, the applicant claimed a pension under the Veterans' Entitlement Act 1986 (Cth) ("VE Act") by reason of his diabetes. The Repatriation Commission rejected the claim and this decision was affirmed by the Veterans' Review Board.

The Board accepted that there was a causal association between the applicant's pancreatitis and his diabetic condition. However, it took the view that, notwithstanding the 1984 decision, it was obliged to consider all the circumstances in order to determine whether the diabetes was in fact causally related to the applicant's war service. After considering the evidence the Board concluded that the applicant's alcohol dependency was not associated with his war service. It followed that his diabetes was not war-caused.

The AAT, on review, decided that there was no legal basis, by way of jurisdictional limitation or estoppel, which prevented the AAT from examining the facts underlying the 1984 determination, namely, that the applicant's pancreatitis was war-caused. The AAT found that the applicant's diabetes was not war-caused, because the applicant's pancreatitis did not contribute to the diabetes. The AAT made no finding as to whether the pancreatitis was caused by war-service.

On appeal to the Full Court (exercising original jurisdiction), the principal question was whether the AAT was bound to accept that the applicant's pancreatitis was a war-caused disease by reason of the 1984 determination. Lockhart and Beazley JJ held that it was not; Spender J took a contrary view.