Delaney and Comcare [2002] AATA 110 (21 February 2002)

Last Updated: 25 February 2002

DECISION AND REASONS FOR DECISION [2002] AATA 110

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/91

GENERAL ADMINISTRATIVE DIVISION )

Re GARY DELANEY

Applicant

And COMCARE

Respondent

DECISION

Tribunal Mr. D.W. Muller, Senior Member

Date 21 February 2002

Place Brisbane

Decision The Tribunal affirms the decision that Gary Delaney is not a "former employee" within the meaning of that term in section 123 of the Safety, Rehabilitation and Compensation Act 1988.

............(Signed)..................................

D.W. MULLER

SENIOR MEMBER

CATCHWORDS

WORKERS COMPENSATION - meaning of the term "former employee" - whether person was receiving weekly payments of compensation under 1971 Act - estoppel - discretion

Safety, Rehabilitation and Compensation Act 1988: s 2, 5, 19,123 and 132

Commission for Safety, Rehabilitation and Compensation of Commonwealth Employees v Neil 114 ALR 461

Formosa and another v Secretary, Department of Social Security [(1988) 9 AAR 260

Roberts v Repatriation Commission [(1992) 39 FCR 420]

REASONS FOR DECISION

Mr. D.W. Muller, Senior Member

1. This is an application by Gary Delaney to review a decision made on 27 October 2000, that he is not a "former employee" within the meaning of that term in section 123 of the Safety, Rehabilitation and Compensation Act 1988 (the 1988 Act).

2. Mr. Delaney has been receiving compensation since November 1991, for an injury he received in 1961. For approximately ten years it had been assumed that the appropriate rate of payment made to him was the rate set out in section 132 of the 1988 Act. That rate applies to "former employees" as defined in section 123 of the 1988 Act.

3. In Mr. Delaney's case, the application of section 132 to his circumstances meant a payment of 70% of his military salary until age 65, and then approximately half that amount for the rest of his life.

4. If Mr. Delaney was not a "former employee" when he received his payments in 1991 and thereafter, the appropriate rate of payment to him was that set out in section 19 of the 1988 Act. If the provisions of section 19 had been applied to Mr. Delaney's circumstances, he would have been paid at the rate of 75% of his military salary but only until the age of 65, and nothing thereafter.

5. The effect of the decision that Mr. Delaney is not a "former employee" is that he will receive backpay to allow for the difference between 75% and 70% of his military salary for approximately ten years, plus an increase in his payments until age 65, but nothing thereafter.

6. The term "former employee" is defined in section123 of the 1988 Act:

""former employee" means a person who, immediately before the commencing day, was receiving weekly payments of compensation under the 1971 Act in respect of an injury resulting in an incapacity and had ceased to be an employee within the meaning of that Act before that day;"

The "commencing day" is covered in section 2 of the Act.

"SECTION 2 COMMENCEMENT

2(1) [Assent] Sections 1 and 2 commence on the day on which this Act receives the Royal Assent.

2(2) [Proclamation] The remaining provisions of this Act commence on a day or days to be fixed by Proclamation."

It is not disputed that the Commonwealth Employees' Rehabilitation Act 1988 (as it was then called) was assented to on 24 June 1988, section 4(1) and Pt VII (except section 98) were proclaimed to commence on 1 July 1988 and the remainder of the Act was proclaimed to commence on 1 December 1988.

7. It is the Respondent's case that Mr. Delaney was not receiving weekly payments of compensation under the 1971 Act before the commencing day of the 1988 Act. He did not receive anything until November 1991. Consequently, he is not a "former employee" within the meaning of that term in section 123 of the 1988 Act. Therefore, the conditions of his payments are not to be assessed under section 132 of the 1988 Act.

8. It was submitted for the Applicant that he should be assessed as a "former employee" for the following reasons:

(i) He was injured in 1961;

(ii) The Office of Commonwealth Employees Compensation (OCEC) accepted liability for the Applicant's injury on 9 July 1987;

(iii) Through no fault of the Applicant, he did not get any payments until 1991;

(iv) In the context of the facts in the Applicant's case, the term "was receiving weekly payments" in section 123 of the 1988 Act should be read as "should have been receiving" or "was entitled to receive".

(v) The Applicant has arranged his financial affairs on the basis that he would continue to receive compensation payments after he turns 65. He will be severely financially disadvantaged if this is not so. The justice of the situation requires that his payments continue on the same basis as they have since 1991.

BACKGROUND FACTS

9. At the hearing, there was no oral evidence adduced before the Tribunal. However, the background facts were placed before the Tribunal in various documents and there is no dispute about them. The Tribunal finds as follows:

(i) Mr. Delaney was born on 13 January 1939.

(ii) He was a member of the RAAF from 2 April 1958 until 20 April 1964.

(iii) In March 1961 he injured his cervical spine whilst playing football for a RAAF rugby league team.

(iv) He was admitted to the RGH Greenslopes on 19 March 1961. An X-ray report by Dr. Crisp dated 20 March 1961 noted:

"No evidence of bone injury and no malalignment. Slight spondylosis; lumbar spine. No evidence of bone injury."

The discharge sheet from the RGH Greenslopes dated 24 March 1961 stated that the final diagnosis was "trauma to cervical spine".

Dr. Fitzgerald in a clinical report commented five weeks after the accident:

"Still has paraesthesia right at the tip of the thumb. Neck movement: slight pain right side on full rotation left."

(v) From 1964 to 1972, he worked as a classifier with the Australian Wheat Board.

(vi) From 1972 to 1978 he worked for the Millaquin Sugar Company at Bundaberg.

(vii) From 1978 to mid 1980 he worked for the Wongarra Shire Council, Bundaberg.

(viii) From mid 1980 to the end of 1981, he worked for Massey Ferguson, Bundaberg.

(ix) He then did tomato picking and other field work until July 1984 when he gave up work due to the onset of neck problems.

(x) On or about 10 December 1984, Dr. Cloes provided a report to Dr. Cameron. The report noted:

"The C5-6 and C6-7 discs are narrowed. Large anteria osteophytes are shown at 6-7 level. Posteriorly osteophytes also project into the intravertebral foramen which appear narrowed at several levels. Alignment is normal. The bones of the base of the skull are unusually dense and some features are suggestive of Paget's disease. Odontoid peg is essentially normal although again dense and no cervical rib formation shown. The cervicothoracic junction is thought to be normal."

(xi) In 1985, Mr. Delaney underwent an operation at the Mater Private Hospital.

(xii) Mr. Delaney made an application for benefits under the Compensation (Commonwealth Government Employees) Act 1971 on 11 October 1985. He received an acknowledgment of his application on 25 October 1985.

(xiii) Upon hearing nothing from the Department of Defence in the following months, Mr. Delaney sought help from his Local Member of Parliament.

(xiv) On 9 April 1986, Mr. Delaney received a letter from the Department of Defence to inform him that his claim for compensation had been referred to the Office of the Commission for Employees' Compensation for consideration.

(xv) On 11 March 1987, Dr. Cameron, neurologist, provided a report to OCEC. Dr. Cameron expressed the opinion that an EMG demonstrated predominant denervation at C5, 6, 7 root levels in the right arm. Dr. Cameron recommended the Applicant undergo a myelogram and referred him to Dr. Cooke, orthopaedic surgeon.

(xvi) On 9 July 1987, a Delegate of the Commissioner for Employees' Compensation wrote the following letter to Mr. Delaney.

"Dear Mr. Delaney,

Your claim for compensation in respect of injury to cervical spine has been considered under the Compensation (Commonwealth Government Employees) Act 1971 and it has been determined that there is liability to pay compensation in respect of trauma to cervical spine.

It has also been determined that you are entitled to payment of compensation as set out in the attached determination. The Department of Defence has been requested to arrange early payment of the compensation awarded.

In compliance with the requirements of the Act a copy of a formal determination is enclosed together with a notice regarding certain rights given to you under the Act."

(xvii) Mr. Delaney did not hear from OCEC in the weeks following the letter of 9 July 1987. In early September, 1987, he telephoned the Brisbane office of OCEC. He was told that he was not entitled to any compensation. As a result of that telephone conversation he instructed his solicitors to attempt to clarify the matter.

(xviii) Mr. Delaney's solicitors wrote letters to The Compensation Officer, Department of Defence in the latter part of 1987 and throughout 1988 but received no reply until a telephone call on 2 September 1988, which advised that the Department was waiting for a report from Dr. Cooke. The Department also wrote to Dr. Cooke on 2 September 1988 to request a report.

(xix) On 17 June 1988, Dr. Frielingsdorf provided a report to the Department of Defence. He confirmed he had first examined the Applicant on 18 April 1984. He considered X-rays of the Applicant's cervical spine in October 1984 revealed narrow disc spaces at C4 downwards with encroachment on the intravertebral foramina most severely involving the C5-6 and C6-7 levels on both sides.

(xx) On 17 November 1989, Mr. Delaney was admitted to hospital with an "incomplete tetraplegia" taking the form of a cerebral spinal cord syndrome.

(xxi) It appears from the documentation that before the precise amount of compensation could be calculated, a large number of enquiries had to be made of medical practitioners, hospitals, the Department of Social Security and of the Applicant's solicitors.

(xxii) At any event, the rate of compensation was not calculated until about 24 September 1991 when the Department of Defence wrote to Mr. Delaney's solicitors. Included in that letter (among other things) was the statement:

"Mr. Delaney is entitled to receive $361.58 per week with effect 7 June 1990. Mr. Delaney's first payment will be made on 7 November 1991."

(xxiii) In fact the first payments which were made in November 1991 included back payments from 5 July 1984 to 30 November 1988 plus backpayments from 1 December 1988 to 23 October 1991 based on 70% of the pay level for LAC P/L4. The determination was said to have been made under s.132 of the 1988 Act.

10. The matter would probably have gone unnoticed had Mr. Delaney not made an enquiry on 2 October 2000, about his entitlements after he turns 65. His file was reviewed and the apparent mistake came to light.

11. The question of the way in which the term "was receiving", in s.123, should be read, was dealt with by the Federal Court in Commission for Safety, Rehabilitation and Compensation of Commonwealth Employees v Neil 114 ALR 461. Although the facts of Mr. Neil's case were slightly different from those of Mr. Delaney, the point which fell for consideration was the same. Neaves J held that s.123 should be read in accordance with the "natural and grammatical meaning" of the words. (At 471,472):

"In my opinion, no sufficient reason has been advanced to justify reading the definition of "former employee" in s 123 otherwise than in accordance with its natural and grammatical meaning. In particular, it would not be appropriate, in my view, to conclude that the definition contained a gap and, in effect, to fill that gap by inserting the words "or was entitled to receive" before the reference to weekly payments of compensation under the 1971 Act.

The circumstance that the weekly payments of compensation in respect of the period prior to 1 December 1988 were made to the respondent under the 1988 Act, albeit by reference to the provisions of the 1971 Act (see s 124(1) and (1A) of the 1988 Act), provides, in my opinion, a sufficient answer to the alternative submission advanced on behalf of the applicant. It cannot truly be said of the respondent that he received weekly payments of compensation "under the 1971 Act"."

12. I find that Gary Delaney was not receiving weekly payments of compensation under the 1971 Act, in respect of his injury, immediately before 1 December 1988. Therefore, he is not a "former employee" within the meaning of that term in sections 123 and 132 of the 1988 Act.

13. It was also submitted on behalf of the Applicant that the Tribunal should provide a remedy to offset the following causes and effects:

(i) The Commonwealth agencies which have dealt with Mr. Delaney's matter have done so in a very dilatory manner. The delay in assessing Mr. Delaney's rate of payment caused him to not be paid before 1 December 1988.

(ii) If there was a mistake made in the assessment of the rate of payment and the other conditions relating to the payment of compensation, those mistakes were made by a Commonwealth agency. As a result of those mistakes, Mr. Delaney has arranged his affairs in a manner which he otherwise would not have done and to his disadvantage.

14. Although it is regrettable that there was a lengthy delay in the assessment process before compensation payments were eventually made to Mr. Delaney in November 1991, the Tribunal is not persuaded that the delay was due entirely to the Commonwealth agency.

15. It is also regrettable that Mr. Delaney was paid pursuant to the wrong rate and conditions for ten years. That mistake was made by the Commonwealth agency but it has now been corrected.

16. Nevertheless, whoever was at fault and whatever mistakes were made, Commonwealth employees are bound to apply the provisions of a statute when there is no power of discretion to depart from those provisions. The question of the limits of the doctrine of estoppel as applied to the actions of Commonwealth employees and the limits on discretion to be exercised by Commonwealth employees, was dealt with in detail by the Full Federal Court in Formosa and another v Secretary, Department of Social Security [(1988) 9 AAR 260], which was followed by a differently constituted Full Federal Court in Roberts v Repatriation Commission [(1992) 39 FCR 420].

17. It is the view of the Tribunal that it is not open to an officer of Comcare, nor to the Tribunal in this case, to do anything other than to apply the provisions of the 1988 Act.

18. The decision under review is affirmed.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. D.W. Muller, Senior Member

Signed: .....................................................................................

B. Hitchcock, Personal Assistant

Date/s of Hearing 30 October 2001

Date of Decision 21 February 2002

Counsel for the Applicant Mr. R. Dickson

Solicitor for the Applicant Payne Butler Lang

Counsel for the Respondent Mr. P. Bickford

Solicitor for the Respondent Phillips Fox