Irwin v Military Rehabilitation & Compensation Commission [2009] FCAFC 33 (20 March 2009)

Last Updated: 23 March 2009

FEDERAL COURT OF AUSTRALIA

Irwin v Military Rehabilitation & Compensation Commission [2009] FCAFC 33

ADMINISTRATIVE LAW – consideration of whether the Administrative Appeals Tribunal in reviewing a decision of the Military Rehabilitation Compensation Commission may determine a claim for compensation once satisfied the Commission is liable for a "service injury", even though the Commission has found no liability and not assessed compensation

ADMINISTRATIVE LAW – consideration of the competency of an appeal – consideration of s 39B of the Judiciary Act 1903 (Cth) – consideration of s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) – consideration of whether the present appeal lies from the effective determination of the application for review – consideration of whether the Tribunal proceeding is capable of being divided into separate parts giving rise to several independent "decisions" – consideration of the scope of s 319 of the Military Rehabilitation and Compensation Act 2004 (Cth)

PRACTICE AND PROCEDURE – consideration of an exercise of judicial power in setting aside an exercise of executive power – limitations on the power to set aside by consent – consideration of the need for the Court to address a contended error of law for itself

Military Rehabilitation and Compensation Act 2004 (Cth), ss 23, 68, 319, 333, 349, 353
Judiciary Act 1903 (Cth), s 39B
Administrative Appeals Tribunal Act 1975 (Cth), s 44
Administrative Decisions (Judicial Review) Act 1977 (Cth), s 5

Director-General of Social Services v Chaney [1980] FCA 87; (1980) 31 ALR 571 - cited
Australian Securities and Investments Commission v PTLZ [2008] FCAFC 164 - cited
Repatriation Commission v Stafford (1995) 56 FCR 132 - cited
Kovalev v Minister for Immigration and Multicultural Affairs (1999) 100 FCR 323; [1999] FCA 557 – cited and quoted
Sanchez v Minister for Immigration and Multicultural Affairs [1999] FCA 265 - cited
Xiao v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 129; [2001] FCA 459 - cited
Minister for Immigration and Multicultural Affairs v Villa (2001) 115 FCR 16; [2001] FCA 1175 - cited
Yulianti v Minister for Immigration and Multicultural Affairs [2001] FCA 142 – cited
Minister for Immigration and Ethnic Affairs v Gungor [1982] FCA 99; (1982) 42 ALR 209 - cited
Minister for Immigration and Multicultural Affairs v Thiyagarajah [2000] HCA 9; (2000) 199 CLR 343 – cited and quoted
Re Paul Fuad and Telstra Corporation Limited [2004] AATA 1182; (2004) 39 AAR 496 – cited
Lees v Comcare [1999] FCA 753; (1999) 56 ALD 84 – cited and distinguished



CAMPBELL IRWIN v MILITARY REHABILITATION & COMPENSATION COMMISSION
QUD 241 of 2009




DOWNES, GREENWOOD & TRACEY JJ
20 MARCH 2009
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 241 of 2009

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

CAMPBELL IRWIN Applicant

AND:	MILITARY REHABILITATION & COMPENSATION COMMISSION Respondent

JUDGES:	DOWNES, GREENWOOD & TRACEY JJ
DATE OF ORDER:	20 MARCH 2009
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1. The appeal be allowed with costs.

2. The proceeding remitted to the Administrative Appeals Tribunal for further hearing according to law.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 241 of 2009

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

CAMPBELL IRWIN Applicant

AND:	MILITARY REHABILITATION & COMPENSATION COMMISSION Respondent

JUDGES:	DOWNES, GREENWOOD & TRACEY JJ
DATE:	20 MARCH 2009
PLACE:	BRISBANE

REASONS FOR JUDGMENT

CONCLUSION

1 Both parties are agreed that the decision of the Administrative Appeals Tribunal ("the Tribunal") which is before us should be set aside. They agree on the reasons. We are prepared to set aside the decision. We propose, however, to give our own reasons. This is because a question arises as to the competency of the appeal, because the orders proposed require the exercise of judicial power and because the determination of the question of law raised will have important practical consequences.

2 The effect of our decision is that, when the Tribunal is reviewing a decision of the Military Rehabilitation and Compensation Commission ("the Commission"), it may determine a claim for compensation, provided it has decided that the Commission is liable, even though the Commission found that there was no liability and has not itself addressed the compensation issue.

BACKGROUND

3 Campbell Irwin was a soldier until his discharge in 2007. After his discharge Mr Irwin made a claim for injury compensation under s 319 of the Military Rehabilitation and Compensation Act 2004 (Cth) ("the Military Compensation Act"). He claimed "permanent impairment compensation" for a back injury sustained while unloading trucks in the course of his duty. The letter of claim, sent by his solicitors, asked the Commission to "accept liability" for the back injury and "assess our client’s entitlement to permanent impairment compensation".

4 The Commission rejected the liability claim on the basis that there was no "service injury" as required by s 23. Mr Irwin sought reconsideration, pursuant to s 353 of the Military Compensation Act, of his claim and again asked both that liability be accepted and compensation assessed. The original determination was confirmed. Mr Irwin then sought review of the reconsideration determination by the Tribunal.

ISSUES

5 With the agreement of the parties, the Tribunal considered, as a preliminary question, whether it would be competent to assess compensation if it decided that the Commission should accept liability. The Tribunal decided that it would not.

6 Mr Irwin has brought an appeal to this Court, from that decision, pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). In addition he has sought relief under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") and s 39B of the Judiciary Act 1903 (Cth).

COMPETENCY OF THE APPEAL

7 The first question is whether these applications are competent. It cannot be doubted that the application under s 39B is competent. The Court could, however, decline to grant any relief as a matter of discretion. There must be a real question of whether the appeal under s 44 is competent. To be competent it must be an appeal from "the effective decision or determination of the application for review" unless, relevantly, "the proceedings before the Tribunal can properly be divided into two or more separate parts in respect of which independent ‘decisions’ may properly be given". (Director-General of Social Services v Chaney [1980] FCA 87; (1980) 31 ALR 571 at 593 per Deane and Fisher JJ). Deane J had earlier anticipated the qualification in the following way (591):

"It is possible that one proceeding before the Tribunal could involve the review of a number of connected decisions by the original decision maker, with the consequence that the proceeding before the Tribunal called for a number of ultimate decisions each of which effectively disposed of a separate part of the proceedings."

8 The determination of the matter before us will not dispose of the proceedings or any separate part of the proceedings. It will merely be a determination of what jurisdiction the Tribunal has and how it must go about determining the matter before it. We do not think that the appeal under s 44 is competent.

9 In Australian Securities and Investments Commission v PTLZ [2008] FCAFC 164 a Full Court of the Federal Court, when in doubt as to whether it had jurisdiction under s 44 of the AAT Act and s 5 of the ADJR Act, turned to s 39B of the Judiciary Act. We think it is appropriate to take the same course here.

10 The Tribunal unquestionably had jurisdiction to determine the question of liability. The matter of doubt was whether it could assess compensation. That question could only arise if the Tribunal set aside the Commission’s decision and determined that the Commission should accept liability. If the Tribunal determined that there was no liability the matter before us would not arise. In these circumstances it seems to us that the better preliminary matter to have been determined by the Tribunal was whether the Commission was liable and only to consider the question of jurisdiction to hear the second matter if it was. The matter determined would not then potentially have been academic. As it is now, there may be a decision of the Tribunal and of this Full Court on a question which never arises in the proceedings.

11 Nevertheless, since the matter has been considered by the Tribunal and now argued before us, the practical course is for us to determine it. The Court accordingly proposes to consider the application under s 39B of the Judiciary Act.

THE EXERCISE OF JUDICIAL POWER

12 It is clear that in determining an appeal under s 44 of the AAT Act or granting relief under s 39B of the Judiciary Act this court must exercise judicial power. (Repatriation Commission v Stafford (1995) 56 FCR 132 per Jenkinson, Ryan and Lee JJ; Kovalev v Minister for Immigration and Multicultural Affairs (1999) 100 FCR 323; [1999] FCA 557 per French J; Sanchez v Minister for Immigration and Multicultural Affairs [1999] FCA 265 per Sackville J; Xiao v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 129; [2001] FCA 459 per Nicholson J; Minister for Immigration and Multicultural Affairs v Villa (2001) 115 FCR 16; [2001] FCA 1175; and Yulianti v Minister for Immigration and Multicultural Affairs [2001] FCA 142 per Stone J).

13 What is before the court is a challenge to a decision of the Tribunal which is an administrative decision. It represents an exercise of the executive power of the Commonwealth. It is not simply an order resolving a dispute between litigants. An exercise of judicial power to set aside an exercise of executive power cannot depend upon consent where, as with applications to the Tribunal, the Parliament has conferred executive power relating to the decision, including the power to remake it, on the Tribunal. In Kovalev (at 324) French J said this:

"It is important therefore that the Court itself addresses and is satisfied of the basis upon which its order is to be made and in particular where the order sets aside the decision of an official decision-maker or a tribunal."

In Minister for Immigration and Ethnic Affairs v Gungor [1982] FCA 99; (1982) 42 ALR 209 at 221 Sheppard J, in a passage subsequently approved by the High Court in Minister for Immigration and Multicultural Affairs v Thiyagarajah [2000] HCA 9; (2000) 199 CLR 343 at 356, 357, identified the task involved in the exercise of judicial power on appeal from the Tribunal as follows:

"The error of law alleged has to be isolated out, a decision made on this question of law, and such order made and directions given as are appropriate only to the decision of this question of law... ."

14 To use the words of French J in Kovalev (at 326) there will be "a purported, but not an actual exercise of judicial power" if a court acts upon an asserted error of law or even a prima facie error of law, even where the parties are agreed, without satisfying the requirements set out by French and Sheppard JJ.

15 It is accordingly necessary for this court, where the question whether the Tribunal has erred in law is before it, to address the matter for itself. That is not to say that the court may not deal with the matter more briefly in its reasons than it otherwise would, or that it may not specifically state that there has been no real contradictor, so that courts subsequently considering the decision may take that into account.

16 The matter before us is important. It will affect every application to the Tribunal for review of a decision by the Commission to decline liability. We accordingly propose to give reasons.

TRIBUNAL JURISDICTION

17 Section 68 of the Military Compensation Act provides that the Commonwealth is liable to pay compensation to a person under the Act "if... the Commission has accepted liability for one or more service injuries or diseases...", the Commission is satisfied, among other things, that the person has "suffered an impairment" and "a claim for compensation in respect of the person has been made under section 319".

18 Section 319 permits a claim "for one or more of" a listed number of matters. The first and last are "acceptance of liability by the Commissioner for a service injury..." and "compensation". Section 320 identifies who may make a claim and includes "the person who sustained the injury...".

19 The argument which was urged upon Deputy President Hack by the Commission in the Tribunal and which he upheld, proceeds on the basis that there are two steps in a claim under the Military Compensation Act. The first is the establishment, by acceptance, of liability. The second, in a case in which liability has been accepted, is the assessment of compensation. The argument proceeds on the basis not only that there is no entitlement to compensation unless the facts support acceptance of liability; not only that compensation must not be assessed unless liability is first accepted; but that no claim for compensation can even be made until liability is accepted.

20 The consequences, on an application for review by the Tribunal, are that, if the Commission has not both accepted liability and dealt with compensation, the question of compensation cannot be dealt with in the review. While such a position may have some virtues they do not seem to include the expeditious determination of claims.

21 We do not see either in the words of the legislation read literally, or in those words read purposively in their context, a requirement for the regime found by the Tribunal to be mandated. Indeed, we find two markers in the legislation pointing the other way:

1. Section 319 authorises the making of claims for both acceptances of liability and for compensation at the same time.

2. Section 68 lists cumulative conditions precedent to the payment of compensation but does not suggest that determination of acceptance of liability is a necessary precondition to the making of a valid application for compensation. It does not suggest that compensation could not be considered immediately after an application for acceptance of liability had been favourably determined.

22 The appeal to the Tribunal (ss 354 and 345 of the Military Compensation Act) is an appeal, not from the original determination of the Commission, but from a reconsideration decision (s 349 of the Military Compensation Act). Where the matter before the Commission for reconsideration is a claim seeking determination of both liability and compensation the Commission, on reconsideration, will have both matters before it and may determine compensation if it decides to accept liability. The refusal of a joint claim is as much a refusal to assess compensation as it is a refusal to accept liability (see Re Paul Fuad and Telstra Corporation Limited [2004] AATA 1182; (2004) 39 AAR 496 at 498; [2004] AATA 1182 at [4]).

23 The sequential determination of liability and damages or compensation is a well known process in the law. The general rule is that both aspects are heard together even though no entitlement to damages will arise if liability is not established. In appropriate cases the two are separated. Nevertheless the tribunal remains seized of jurisdiction to determine both matters. In our opinion that is the case under the Military Compensation Act.

24 We have given consideration to the question of whether the construction which we have determined should be placed on the Military Compensation Act might be inconsistent with the decision of the Full Court (Wilcox, Branson and Tamberlin JJ) in Lees v Comcare [1999] FCA 753; (1999) 56 ALD 84. We have concluded that the decision in Lees is distinguishable. It is therefore not necessary for us to consider whether we agree with it. In Lees the Full Court dealt with two appeals. One of them was a decision of the Tribunal which related to a claim made by Mr Terence O’Donohue. Mr O’Donohue had claimed employees’ compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the SR & C Act"). His claim was rejected by Comcare on the basis that his claimed condition of depression resulted from reasonable disciplinary action. He unsuccessfully sought reconsideration of his claim by Comcare. He then applied to the Tribunal for review of the decision. The Tribunal (Mathews J, President and Senior Member Handley) were called on to rule on a similar preliminary question to the question presently under consideration. It found that the Tribunal had jurisdiction. This decision was reversed on appeal.

25 The Full Court considered that no decision could be made on Mr O’Donohue’s entitlement to compensation until a preceding decision had been made under s 14 of the SR & C Act that a liability to pay compensation had arisen: see at [34]. Mr O’Donohue had made his claim on a form approved by Comcare under s 54(2)(a). Although the form was entitled "Claim for Rehabilitation and Compensation", the contents of the form were not disclosed in the judgment. The Court did, however, record (at [30]) that the form did not enquire after a good deal of information which would have been necessary for Comcare to have in order to make a range of determinations (including rate of compensation) in addition to a determination of liability. The Full Court understood the decision which Comcare made as being a decision, under s 14, that it was not liable because Mr O’Donohue had not suffered any "injury" within the meaning of the Act.

26 In the present case s 319 of the Military Compensation Act clearly contemplates that a claim can be made simultaneously for an acceptance of liability and a payment of compensation. Mr Irwin made such a joint claim. The Commission was obliged, under s 333, to determine that joint claim. The Commission did so. It rejected it on the ground that Mr Irwin had suffered no "service injury". That finding made it unnecessary for it to deal with the compensation aspect of the claim. This did not mean that the compensation determination could not have been made contemporaneously had the Commission made a positive finding on the liability issue. Indeed, in such circumstances, it would have been required, by s 333, to do so. It can, therefore, be said that the rejection determination involved both an explicit rejection of the liability claim and an implicit rejection of the compensation claim. This conjoint determination was reviewable.

27 In Lees there was no implicit rejection of a compensation claim. Such a claim had not been made (or, at least, had not been supported with essential information) and Comcare would not have been aware, when it determined that it had no liability, of all of the information it needed in order to deal with the additional aspects of the compensation determination which would have arisen had liability been accepted. It would have been necessary for a further application to have been made by Mr O’Donohue and for more information to be supplied by him. The only reviewable determination made by Comcare, thus related to liability: see at [52].

28 The difference in outcome in this appeal and in Lees is explicable by reference to the different regimes prescribed by the Military Compensation Act on the one hand and the SR & C Act on the other.

29 The appeal will be allowed with costs and the matter remitted to the Tribunal for hearing in accordance with law. It is a matter for the Tribunal to determine how the Tribunal should be constituted.

I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Downes, Greenwood & Tracey.

Associate:

Dated: 20 March 2009

Counsel for the Applicant:	Mr J Glissan QC with Mr A Anforth
Solicitor for the Applicant:	Slater & Gordon Lawyers
Counsel for the Respondent:	Mr T Howe QC with Mr P Bickford
Solicitor for the Respondent:	Australian Government Solicitor

Date of Hearing:	9 February 2009
Date of Judgment:	20 March 2009