Pascoe v Australian Postal Corporation [2004] FCAFC 4 (6 February 2004)

Last Updated: 6 February 2004

FEDERAL COURT OF AUSTRALIA

Pascoe v Australian Postal Corporation [2004] FCAFC 4

ADMINISTRATIVE LAW – workers compensation – s 37(7) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) - whether reasonable excuse for failing to undertake rehabilitation program – whether Administrative Appeals Tribunal addressed the correct question – relevance of factors set out in s 37(3) in determining whether any excuse given is reasonable - question of whether rehabilitation program was appropriate irrelevant

Safety, Rehabilitation and Compensation Act 1988 (Cth) s37(7)
Federal Proceedings (Costs) Act 1981 (Cth)

Australian Postal Corporation v Forgie [2003] FCAFC 223; (2003) 202 ALR 63, referred to

Telstra Corporation v Administrative Appeals Tribunal [2003] FCA 102, (2003) 37 AAR 40, applied

Transurban City Link Ltd v Allan [1999] FCA 1723; (1999) 95 FCR 553, (1999) 168 ALR 687, cited

Hewlett Packard Pty Ltd v GE Capital Finance Pty Ltd [2003] FCAFC 278, followed

Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748, referred to

Ruddock v Vadarlis [2001] FCA 1865; 115 FCR 229, followed





GEORGE PASCOE v AUSTRALIAN POSTAL CORPORATION

N 594 OF 2003




HILL, MARSHALL AND FINKELSTEIN JJ
6 FEBRUARY 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 594 OF 2003

ON APPEAL FROM A SINGLE JUDGE OF THE COURT

BETWEEN:	GEORGE PASCOE APPELLANT
AND:	AUSTRALIAN POSTAL CORPORATION RESPONDENT
JUDGES:	HILL, MARSHALL AND FINKELSTEIN JJ
DATE OF ORDER:	6 FEBRUARY 2004
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.	The appeal be dismissed.
2.	The appellant pay the respondent’s costs of the appeal.

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	N 594 OF 2003

ON APPEAL FROM A SINGLE JUDGE OF THE COURT

BETWEEN:	GEORGE PASCOE APPELLANT
AND:	AUSTRALIAN POSTAL CORPORATION RESPONDENT

JUDGES:	HILL, MARSHALL AND FINKELSTEIN JJ
DATE:	6 FEBRUARY 2004
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT

1 This appeal raises for consideration the proper construction of s 37(7) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the Act").

2 The appeal is from a judgment of Whitlam J published on 30 April 2003. His Honour allowed an appeal from three decisions of the Administrative Appeals Tribunal ("the AAT"). He set aside those decisions and remitted them to be heard and decided again by the AAT.

3 The three decisions subject to review in the AAT were as follows:

1) a decision by the respondent, Australian Postal Corporation ("Australia Post"), to affirm a determination made under s 24 of the Act to disallow Mr Pascoe’s claim for lump sum compensation for permanent impairment due to an injury to his back;
2) a decision to continue the suspension of Mr Pascoe’s entitlement to weekly payments of compensation due to his failure to undertake a rehabilitation program;
3) a decision that Mr Pascoe was not entitled to weekly payments of compensation under s 19 of the Act in respect of a period during 1999.

4 The factual background to the making of those decisions includes the following aspects:

• in May 1992 Mr Pascoe sustained a work-related back injury in his employment with Australia Post;
• Mr Pascoe received weekly payments of compensation from July 1992 until April 1997, when those payments were terminated as a result of a decision by Australia Post. Mr Pascoe sought a review of that decision in the AAT and in October 1998 the AAT decided, by consent, that Australia Post pay Mr Pascoe weekly compensation, including for the period from April 1997;
• on 31 March 1999 Australia Post determined, pursuant to s 37(1) of the Act, that Mr Pascoe undertake a rehabilitation program;
• Mr Pascoe requested Australia Post reconsider the s 37(1) determination. On 6 May 1999 the s 37(1) determination was revoked. A fresh determination was made on 7 May 1999 and amended on 13 May 1999. The later determination required Mr Pascoe to attend for work on 17 May 1999 to commence the program. He attended on 17 May 1999, but not thereafter;
• on 25 May 1999 a further s 37(1) determination was made. It required Mr Pascoe to commence a rehabilitation program on 3 June 1999. Mr Pascoe did not undertake the program, nor did he request a reconsideration of it by Australia Post.

5 In its reasons for decision, the AAT treated as a threshold question, the question of whether Mr Pascoe had a reasonable excuse for failing to undertake the rehabilitation program, the subject of the 25 May 1999 determination.

6 In finding that Mr Pascoe had a reasonable excuse for his failure to undertake the rehabilitation question, two considerations seem to have been paramount in the reasoning of the AAT. Those considerations were:

• evidence tending to suggest that in arriving at the particular rehabilitation program the subject of the determination 25 May 1999:
"...the full likely psychological effects on Mr Pascoe from requiring him to do mail sorting indoors...was not a matter given consideration."
• its view that it would have been preferable, in devising the rehabilitation program, for Australia Post:
"...to have given greater consideration to Mr Pascoe’s attitude to the programs, in as much as it involved mail sorting."

7 So far as is presently material, at the relevant time, s37 of the Act provided:

"37(1) A rehabilitation authority may make a determination that an employee who has suffered an injury resulting in an incapacity for work or an impairment should undertake a rehabilitation program and, where the authority so determines, it may make arrangements with an approved program provider for the provision of a rehabilitation program for the employee.

(2) ...

(3) In making a determination under subsection (1), a rehabilitation authority shall have regard to:

(a)	any written assessment given under subsection 36(8);
(b)	any reduction in the future liability to pay compensation if the program is undertaken;
(c)	the cost of the program;
(d)	any improvement in the employee’s opportunity to be employed after completing the program;
(e)	the likely psychological effect on the employee of not providing the program;
(f)	the employee’s attitude to the program;
(g)	the relative merits of any alternative and appropriate rehabilitation program; and
(h)	any other relevant matter.

(4) ...

(5) ...

(6)

...

(7) Where an employee refuses or fails, without reasonable excuse, to undertake a rehabilitation program provided for the employee under this section, the employee’s rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the employee begins to undertake the program.

(8) Where an employee’s right to compensation is suspended under subsection (7), compensation is not payable in respect of the period of the suspension."

8 As Whitlam J rightly observed, the AAT addressed the factors set out in s 37(3)(a) to (g) in considering the reasonableness of the excuse referred to in s 37(7) of the Act.

9 The AAT determined the s 37(7) issue as a threshold one. If Mr Pascoe was found to have failed to undertake the program without reasonable excuse, the AAT would not review the two Australia Post decisions, as Mr Pascoe’s right to institute or continue any proceedings under the Act in relation to compensation would be suspended until the program is undertaken. Having determined the threshold question favourably to Mr Pascoe, the AAT then proceeded to review the other two decisions and set them aside.

10 An issue arose before Whitlam J concerning whether the AAT was empowered to decide whether Mr Pascoe has a reasonable excuse for failing to undertake the rehabilitation program. His Honour considered that the decision made by Australia Post under s 37(7) was not reviewable by the AAT.

11 The primary judge did not end his consideration of the matter there, saying at [14] that:

"In any event, the decision of the Tribunal must be set aside."

12 His Honour was of the view that the decision should be set aside, effectively because the AAT asked itself the wrong question in considering the issues raised by s 37(7). At [20] his Honour said:

"The approach of the Tribunal to the issue of "reasonable excuse" under s 37(7) of the Act was fundamentally flawed. It was not concerned with whether a determination should be made under s 37(1). The Tribunal used the provisions of s 37(3), particularly pars (e) and (f), as a checklist for a purpose for which they were not intended . Its gaze should have been fixed firmly on the object of s 37(7), which had effect only where a determination was in force and a program provided."

13 Subsequent to the judgment under appeal, the Full Court in Australian Postal Corporation v Forgie [2003] FCAFC 223; (2003) 202 ALR 63 held that a determination under s 37(7) was reviewable by the AAT. The parties in this appeal did not suggest that Forgie was incorrectly decided. It is a recent judgment of the Full Court which we would ordinarily follow: see Transurban City Link Ltd v Allan [1999] FCA 1723; (1999) 95 FCR 553 at 560 and [1999] FCA 1723; (1999) 168 ALR 687 at 693. In any event, there is no reason for present purposes to question the reasoning of Forgie given that, like the primary judge, we consider that the AAT asked the wrong question when it addressed s37(7).

14 In our view the reference to "a rehabilitation program provided for the employee" in s37(7) is one in respect of which a determination under s37(1) has been made, and for which a program has been provided by an approved program provider. The appropriate way to challenge a particular program is to seek its reconsideration under s 38(2). This could involve an assessment of whether the factors set out in s 37(3) have been addressed. Unless the employee has sought a reconsideration, when considering whether an employee has a reasonable excuse for failing to undertake a rehabilitation program, the program in question is to be taken to be appropriate for the employee. It is no part of the s 37(7) exercise to gainsay the program made by an approved program provider following a s 37(1) determination. Consequently the factors set out in s 37(3) of the Act are relevant only to a decision made under s 37(1), as suggested by the opening words of s 37(3). As noted by the primary judge, although the s 37(3) factors are not necessarily irrelevant to a decision to be made under s 37(7), they do not inform that decision.

15 Despite ultimately phrasing its finding in terms of "reasonable excuse", the AAT did not actually pose for itself the question whether Mr Pascoe had an excuse for his failure to undertake the rehabilitation program, the subject of the determination by Australia Post on 25 May 1999, or whether that excuse was reasonable. Rather, it considered whether the program was an appropriate one for Mr Pascoe.

16 At [35] of its reasons for decision the AAT said:

"The materials indicate a number of reasons that might help explain Mr Pascoe’s failure or refusal to engage in the return to work program the subject of the s37(1) direction on 25 May 1999.

•	He had requested placement in a position suited to his physical restrictions and his training background (ex TD2/T31). This, from other evidence, would have been, in Mr Pascoe’s view, an information technology position.
•	He told the CRS that he preferred working outdoors.
•	Dr Hollo considered that Mr Pascoe could not cope with the idea of working indoors.
•	He had tried letter sorting at an earlier time and had been unsuccessful at that work."

17 Those issues or reasons identified by the AAT are reasons why the program may not be suitable for Mr Pascoe, but they do not bear on the question of whether he had a reasonable excuse for failing to attend to undertake the program. The reasons of the AAT do not disclose any findings of fact which deal with whether Mr Pascoe had a reasonable excuse for failing to undertake the particular program, which he was required to undertake. As the primary judge said at [19]:

"Mr Pascoe’s medical condition after 25 May 1999 may provide a reasonable excuse for his refusal to undertake the rehabilitation program determined on that day, but that is not a matter on which the Tribunal has made a finding."

18 The legal error made by the AAT is analogous to the error identified in Telstra Corporation v Administrative Appeals Tribunal [2003] FCA 102, (2003) 37 AAR 40 by Kiefel J concerning a decision taken under s 57(2) of the Act (being a similar provision to s37(7)). At [11] in Telstra her Honour said:

"The question the Tribunal was required to address was whether the circumstances referred to in s 57 were present. In doing so, it must consider whether Mr Rodriguez has a reasonable excuse for not complying with the notice. It is obvious that the Tribunal took a different view as to whether an examination was necessary to permit Dr Reddan to present further evidence. It is understandable that the Tribunal wished to advance the proceedings and perhaps regrettable, at this point, that yet another examination was to be undertaken. These proceedings have been on foot for some years, have received the attention of a number of doctors and resulted in lengthy hearings before the Tribunal. In that process Mr Rodriguez has been examined by a number of doctors, including Dr Reddan. However, the question addressed by the Tribunal was not, in my view, that posed by the subsection. The Tribunal considered whether the expert witness for Telstra could reasonably be said to need the further examination. It reasoned that an examination was not required. The conclusion it reached was, in reality, that Mr Rodriguez ought to be excused, rather than that he himself had an excuse for non-attendance. Generally speaking, the subsection requires a reason personal to the employee. The excuse cannot be provided by an opinion formed by the Tribunal as to the need for the examination. That is a question for the Authority. It may be in some cases that oppressive conduct on the part of an Authority, and its effect upon an employee, could be relied upon as furnishing a reasonable excuse. Such a contention is not advanced here."

19 Similarly, in the present case the AAT reached the conclusion, in effect, that Mr Pascoe ought to be excused from undertaking the rehabilitation program, rather than whether Mr Pascoe himself had a reasonable excuse for non-attendance. Section 37(7) also requires an excuse "personal to the employee" and not an opinion by the AAT as to the appropriateness of the particular program.

20 As was said in Forgie at [40], the s 37(7) process:

"...requires that the person at least consider the circumstances surrounding the employee’s failure or refusal to undertake a rehabilitation program and to evaluate what is reasonable in the circumstances."

21 In our view, the AAT, standing in the shoes of Australia Post, did not evaluate the reasonableness of any excuse presented to explain Mr Pascoe’s failure to undertake the program devised for him, rather it focused on the reasonableness of the program itself. It was not its role to do so. The AAT should have taken the program as having been provided to the employee without challenge following a determination, and assessed the reasonableness of Mr Pascoe’s excuse, if he had one, for failing to undertake that particular program.

22 Accordingly we would dismiss the appeal.

23 Counsel for Mr Pascoe submitted that, should the appeal be dismissed, the matter should be remitted to the same AAT member who made the original decisions, for that member to deal with further evidence on the issues raised by s 37(7). We do not think that is a desirable course. We see no reason to inhibit the AAT, in the manner in which it considers it to be appropriate, to properly review the decisions of Australia Post which were the subject of the AAT decision of 30 August 2002. Any order, other than one upholding the primary judge’s remittal of the decisions subject to appeal in this Court, may be productive of confusion and perhaps further litigation. That result should be avoided.

24 A question arose at the hearing of the appeal concerning whether Mr Pascoe should be entitled to a costs certificate under the Federal Proceedings (Costs) Act 1981 (Cth) ("the Costs Act"). Written submissions on those issues were received by the Court subsequent to the hearing. Those submissions also addressed the question whether a costs order should be made against Mr Pascoe in the appeal, should the appeal be dismissed. Having considered these submissions we are of the view that there are no special or exceptional circumstances in this matter which would prevent costs following the event, both on the appeal and before Whitlam J: see Hewlett Packard Pty Ltd v GE Capital Finance Pty Ltd [2003] FCAFC 278 at [8]; Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 per Toohey J at 48,136; Ruddock v Vadarlis [2001] FCA 1865; 115 FCR 229 per Black CJ and French J at [9]-[25].

25 Section 6(1) of the Costs Act provides that:

"Subject to this Act, where a Federal appeal succeeds on a question of law, the Court that heard the appeal may, on the application of a respondent to the appeal, grant to the respondent a costs certificate in respect of the appeal."

That subsection has no relevance to this appeal, but Mr Pascoe may consider applying under it to the primary judge in respect of the costs at first instance, in what was "an appeal" from the AAT.

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Hill, Marshall and Finkelstein.

Associate:

Dated: 6 February 2004

Counsel for the Applicant:	L T Grey
Solicitor for the Applicant:	Carroll & O’Dea
Counsel for the Respondent:	A Robertson and GT Johnson
Solicitor for the Respondent:	Forners
Date of Hearing:	26 November 2003
Date of Judgment:	6 February 2004