Sycz and Comcare [2002] AATA 319 (3 May 2002)

Last Updated: 8 May 2002

DECISION AND REASONS FOR DECISION [2002] AATA 319

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/763

GENERAL ADMINISTRATIVE DIVISION )

Re MARK SYCZ

Applicant

And COMCARE

Respondent

DECISION

Tribunal Mr B J McCabe

Date 3 May 2002

Place Brisbane

Decision The Tribunal sets aside the decision under review.

.................(Sgnd).................

Mr B J McCabe

Member

CATCHWORDS

COMPENSATION - rehabilitation program - whether HECS fees are payable as part of the rehabilitation program

Safety, Rehabilitation and Compensation Act 1988

Higher Education Funding Act 1988

Re Hazelwood and Comcare [2000] AATA 820

Re Hull and Comcare [1999] AATA 766

Re Hardin and Comcare Australia (AATA 9201, 22 December 1993)

Hardin v Comcare (1995) 21 AAR 392

REASONS FOR DECISION

3 May 2002 Mr B J McCabe

Introduction

1. The applicant, Mark Sycz, has sought review of a decision not to reimburse him for the cost of HECS (Higher Education Contribution Scheme) fees payable for a course that he undertook as part of a rehabilitation program. The applicant says that s 37 of the Safety, Rehabilitation and Compensation Act 1988 obliges the respondent to pay the costs of his rehabilitation program. He argues that HECS fees were a cost of the rehabilitation program although he had expressly agreed in correspondence with the respondent before enrolment that it would not be obliged to make any payment in respect of HECS incurred at some future point. Comcare denies it is required to pay for the HECS fees. The respondent adds there is no statutory basis for it to make a payment.

The Facts

2. There was no real dispute about the facts. Mark Sycz was a soldier in the regular Army. He enlisted on 17 April 1990. During his service he sustained injuries to his knees. He was discharged from the Army on 15 December 1996 on the basis that he was medically unfit.

3. The respondent accepted liability for Mr Sycz's injuries. He became entitled to compensation. As part of the separation process, CRS Australia (CRS) devised a vocational training and rehabilitation program in consultation with the applicant. The medical advice indicated that Mr Sycz should take up a more sedentary occupation. The applicant sought a place in the Bachelor of Education (Special Needs) program at Griffith University. CRS recommended to the Department of Defence that the applicant be permitted to undertake the course of study at Griffith University as part of his rehabilitation program.

4. The Department of Defence accepted the recommendation in a letter to the applicant dated 28 February 2000. The letter from the department explained that it was expected that Mr Sycz would be able to obtain employment following completion of his studies. The department anticipated that compensation payments would cease at that point.

5. The letter containing the department's acceptance of the rehabilitation program included an exhortation to the applicant to be diligent in his studies and inform CRS (which oversaw the program) of certain information. The letter went on:

"The Department has agreed to pay an amount of $500 per annum towards the costs of texts. As well the Department will pay the costs of any compulsory subject, or administration fees that you are obliged to pay as part of your rehabilitation program. You should keep receipts of all payments you make in relation to your studies, and submit them to your rehabilitation provider for reimbursement action...

Whilst it has been agreed to pay the costs associated with the completion of your course, please note that Defence will not pay any Higher Education Contribution (HECS) payments which may become payable at some stage in the future after completion of your studies. My understanding is that this course does not come under the aegis of HECS."

6. The applicant discussed the HECS decision with an officer of CRS, Mr Alan Phillips. The applicant says Mr Phillips told him the decision not to pay HECS was the product of a policy that was likely to change as a result of claims that were before the Tribunal in another case. Mr Phillips was not called to give evidence, and I have no reason to doubt the applicant's account of the discussion. The applicant acknowledges that he read and understood the portions of the letter relating to HECS, but discounted them because he was led to believe the decision would not stand.

7. The applicant enrolled in the course and commenced his studies. When the University informed the applicant of his HECS liability, he elected not to make the contribution up front. The Higher Education Funding Act 1988 says the amount of the HECS liability becomes a debt due to the Commonwealth that could be repaid through the taxation system when the applicant reached the required level of income.

8. The question became more urgent for the applicant when he realised his level of income under the compensation arrangement meant that he was liable to commence repayments of his HECS debt through the taxation system before he completed his studies. He also says he became aware of two decisions of the Tribunal where an applicant succeeded in requiring Comcare to reimburse the cost of HECS. The two cases were Re Hazelwood and Comcare [2000] AATA 820 and Re Hull and Comcare [1999] AATA 766.

9. The applicant wrote to the Military Compensation and Rehabilitation Service (MCRS) seeking review of the decision not to reimburse him in respect of HECS fees. He was informed in a letter dated 18 June 2001 from MCRS that the department's decision contained in the letter of 28 February 2000 would not be changed. The letter from MCRS quoted Comcare's view that "there is no legislative provision for payment of this tax and the recent AAT cases have not impacted on our policy". A review confirmed that decision on 1 August 2001. The applicant now appeals that decision to the Tribunal.

The Issues in this Application

10. The applicant says the Commonwealth must reimburse him for the cost of his HECS contribution. He relies on the words of s 37(4), which provides:

"The cost of any rehabilitation program provided for an employee under this section shall be paid by the relevant authority in relation to that employee."

11. The applicant says that HECS contributions are a cost within the meaning of the Act, and should therefore be met by the Commonwealth. I note the Tribunal has previously found in Re Hull and Comcare [1999] AATA 766 that HECS charges may be considered to be costs within the meaning of s 37 of the Act. In Hull, Deputy President Chappell said (at par 43) it was appropriate:

"...to give a narrow meaning to the term 'cost', as the price charged by the university for providing the course of study, and an amount which is required to be paid by the student at some time subsequent to the commencement of that study."

12. The Deputy President contrasted the situation in Hull with the circumstances in Re Hardin and Comcare Australia (AATA 9201, 22 December 1993) where there was greater uncertainty over the amount of the HECS liability. The uncertainty referred to in Hardin is not present in this case. The amount of the contribution required of each student can be calculated in accordance with s 39 of the Higher Education Funding Act 1988. The University makes the calculation each semester. In those circumstances, I accept the HECS debt the applicant is repaying through the tax system is a cost within the meaning of s 37.

13. That approach appears consistent with the obiter remarks of Einfeld J in Hardin v Comcare (1995) 21 AAR 392. His Honour said (at 397) that a broader interpretation of the word 'costs' than the one adopted by the Tribunal at first instance "is certainly arguable and may well be appropriate".

14. The respondent says it has negated its obligation to meet the costs by reason of the express reservation with respect to HECS charges contained in the letter from the Department of Defence of 28 February 2001. The differing approaches of the parties to the interpretation of s 37 suggest there is an issue over whether such reservations are possible. The applicant's argument says they are not: when a rehabilitation program is approved (and the cost of the program is one of the factors that might properly be considered under s 37(3) when deciding whether or not to give approval), the Commonwealth becomes liable for all of the costs within the meaning of the Act by reason of s 37(4).

15. There is an alternative approach to the interpretation of s 37 that might permit the Commonwealth to refuse to take responsibility for a cost of a program. It may be that s 37(4) is merely intended as a rule for determining which departmental budget will bear the cost of whatever program is devised, and whatever costs are approved. That approach would permit the decision-maker to impose any qualification with respect to costs of the program that he or she felt was appropriate in the circumstances. Once a determination was made, the relevant department or authority was required to meet all of the costs in accordance with the terms of the approval. That approach to the section would afford the Commonwealth considerably greater scope to tailor its involvement in, and responsibility for, rehabilitation programs under the Act.

16. That is a question for another day, however. I am satisfied that the terms of the approval of the applicant's rehabilitation program contained in the letter of 28 February 2001 encompass liability for his HECS contribution. The letter says relevantly:

"...Defence will not pay any Higher Education Contribution (HECS) payments which may become payable at some stage in the future after completion of your studies." [emphasis added]

17. The HECS payments became payable during the course of the applicant's studies because of the level of his income. They were not "unascertained liabilities...in future periods": Re Hardin and Comcare Australia (AATA 9201, 22 December 1993). Comcare knew how much the applicant was earning and it could have determined that the applicant would become liable to make HECS contributions during the course of his studies, although the letter of 28 February suggests some confusion on the part of Comcare as to whether the course of study was subject to the HECS scheme. It is unclear how that confusion arose or why Comcare would believe that the applicant's program would not attract HECS. In any event, there is no evidence suggesting the applicant was responsible for the confusion.

Conclusion

18. The Commonwealth must meet the cost of the applicant's HECS contributions as a cost of the rehabilitation program within the meaning s 37(4). The wording of the express reservation in respect of HECS contained in the letter of 28 February 2001 does not relieve the Commonwealth of liability in the circumstances. It is therefore unnecessary to identify an alternative statutory basis for a payment.

I certify that the eighteen (18) preceding paragraphs are a true copy of the reasons for the decision herein of Mr B J McCabe, Member

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

Associate

Date/s of Hearing 28 February 2002

Date of Decision 3 May 2002

Counsel for the Applicant Mrs S Cool

Solicitor for the Applicant Stockley Furlong

Counsel for the Respondent Mr C Clark

Solicitor for the Respondent Australian Government Solicitor