Webley and Telstra Corporation Limited [2003] AATA 539 (11 June 2003)

Last Updated: 13 June 2003

DECISION AND REASONS FOR DECISION [2003] AATA 539

ADMINISTRATIVE APPEALS TRIBUNAL Nº V2002/508

GENERAL ADMINISTRATIVE DIVISION

Re: KAREN WEBLEY

Applicant

And: TELSTRA CORPORATION LIMITED

Respondent

DECISION

Tribunal: M.J. Carstairs, Member

Date: 11 June 2003

Place: Melbourne

Decision: The Tribunal sets aside the decision under review and remits the matter to the respondent with a direction to recalculate the amount of compensation under the formula in s21(3) of the Safety, Rehabilitation and Compensation Act 1988.

(sgd) M.J. Carstairs

Member

COMPENSATION - Commonwealth employees' compensation - calculation of weekly payment - adjustment of compensation for lump sum benefit under a superannuation scheme

Safety, Rehabilitation and Compensation Act 1988 ss19, 21, 114, 114B

Archer v Comcare (2000) 101 FCR 30

Telstra Super Pty Ltd v Flegeltaub (2000) 2 VR 276

Yew Bon Tew alias Yong Boom Tiew v Kenderaan Bas Maria [1982] 3 All ER 833

Metropolitan Film Studios Ltd v Twickenham Film Studios Ltd [1962] 3 All ER 508

Re Archer and Comcare (1999) 61 ALD 521

Reitano v Commonwealth of Australia (1985) 9 ALN N201

Re Hammerton and Comcare (1995) 21 AAR 204

Rose v Secretary, Department of Social Security (1990) 21 FCR 241

Re Secretary, Department of Social Security and Jessop (1989) 17 ALD 62

REASONS FOR DECISION

11 June 2003 M.J. Carstairs, Member

1. This is an application by Karen Webley (the applicant) for review of a reviewable decision made by a delegate of Comcare (the respondent) on 22 March 2002, which recalculated weekly payments of compensation payable to the applicant from 16 November 1999 onwards. The reviewable decision affirmed a decision made on 14 January 2002.

2. At the hearing Mr P. Bingham of counsel, instructed by Maurice Blackburn Cashman, solicitors, represented the applicant. Mr J. Lenczner of counsel, instructed by Sparke Helmore, solicitors, represented the respondent.

3. The Tribunal had before it the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 as well as exhibits marked A1-A3. The parties lodged Statements of Facts and Contentions before the hearing. After the hearing further submissions were lodged by the applicant and the respondent on 4 December 2002 and on 17 and 18 December 2002 respectively.

BACKGROUND

4. The applicant was born on 1 January 1947. Telstra employed her as a tele-marketing consultant until 15 November 1999, when she retired on health grounds. In February 2000 she lodged a claim for total and permanent incapacity with her superannuation fund, TelstraSuper. After her retirement the applicant was paid compensation payments under s19 of the Safety, Rehabilitation and Compensation Act 1988 (the Act). On 2 November 2001 the trustee of TelstraSuper granted her claim under the scheme. According to the documentary evidence, the employer-financed portion of the superannuation benefit, as at the date of the applicant's retirement in November 1999, was $80,989.45 (T3). It appears that the applicant has rolled over at least part of the sum arising out of her claim for impairment.

5. In the determination dated 14 January 2002, the respondent recalculated the rate of the applicant's weekly compensation. Taking into account her entitlement to invalidity payment under the superannuation scheme, her compensation payments previously paid under s19 of the Act, were reduced on the basis that the applicant should have been paid the following weekly payments, calculated under s21 of the Act:

(a) 16 November 1999 to 22 December 1999 $320.39

(b) 23 December 1999 to 20 December 2000 $329.92

(c) 21 December 2000 to 19 December 2001 $349.35

(d) 20 December 2001 and onwards $359.45

6. As a result of these recalculations, it was further stated that the applicant, having been entitled to a lesser amount of compensation than that which she was paid throughout the period, had incurred an overpayment. A letter dated 12 February 2002 (T9) notified the applicant that the overpayment from 1999 to 2001 was $15,560.21, net of tax. The applicant sought review of the decision. On 22 March 2002 a senior claims officer affirmed the decision to recalculate the rates of payment in the terms set out above.

7. On 14 May 2002 the applicant sought review with this Tribunal.

EVIDENCE

8. The documents before the Tribunal included a letter dated 20 December 2001 from Mr B. Stafford, specialist benefits administrator at TelstraSuper, to the respondent advising that the applicant's claim for invalidity benefit had been approved by the Trustee on 2 November 2001. The letter stated that the employer-financed component of the benefit at the time the applicant retired was $80,989.45. In a letter dated 1 March 2002 (exhibit A2) Mr Stafford wrote to the applicant stating that the superannuation benefit amount was $103,078.58, of which $11,578.58 had been rolled into the TelstraSuper Rollover Plus account. He attached a cheque for the balance of $91,500.

9. The Telstra Trust Deed (the Trust Deed) (exhibit A1) provides for the continuing scheme known as the Telstra Superannuation Scheme and makes provision for benefits to be paid and determined by the Trustee. The Trust Deed also makes provision to pay total permanent invalidity benefits (clause 2.3.3). Total and permanent invalidity is defined in Division 2 of part 2.1 of the Trust Deed.

CONSIDERATION OF THE ISSUES

10. The issue before the Tribunal was the meaning and effect of the word receives when used in s21 of the Act. Section 21 deals with the situation where a superannuation invalidity benefit is paid by way of lump sum and is then included in the income test for compensation purposes.

21(1) This section applies to an employee who, being incapacitated for work as a result of an injury retires voluntarily, or is compulsorily retired, from his or her employment at any time after the commencement of this section and, as a result of the retirement, receives a lump sum benefit under a superannuation scheme.

(2) Comcare is liable to pay compensation to the employee, in respect of the injury, in accordance with this section for each week after the date of the retirement during which the employee is incapacitated.

(3) The amount of compensation is an amount calculated under the formula:

where:

AC is the amount of compensation that would have been payable to the employee for a week if:

(a) section 19, other than subsection 19 (6), had applied to the employee; and

(b) in the case of an employee who was not a member of the Defence Force immediately before retirement-the week were a week referred to in subsection 19 (3);

SA is the superannuation amount; and

SC is the amount of superannuation contributions that would have been required to be paid by the employee in that week if he or she were still contributing to the superannuation scheme.

11. The term superannuation amount used in the formula in s21(3) is defined in s4 of the Act in the following terms:

"superannuation amount", in relation to a pension received by an employee in respect of a week, or a lump sum benefit received by an employee, being a pension or benefit under a superannuation scheme, means an amount equal to:

(a) if the scheme identifies a part of the pension or lump sum as attributable to the contributions made under the scheme by the Commonwealth, Commonwealth authority or licensed corporation-the amount of that part; or

(b) in any other case-the amount assessed by the relevant authority to be the part of the pension or lump sum that is so attributable or, if such an assessment cannot be made, the amount of the pension received by the employee in respect of that week or the amount of the lump sum, as the case requires;

12. In her Statement of Facts and Contentions dated 26 September 2002, the applicant stated that the issue was whether she had received the relevant lump sum on 15 November 1999 so that it could be used to recalculate the rate from that time. She submitted that in Archer v Comcare (2000) 101 FCR 30 the Full Court of the Federal Court held that the meaning of receives must take into account the context in which the word is used. Where the statutory scheme distinguishes between a benefit that is payable and one that is received, a benefit will not be received merely because the benefit is later found to have been payable to the applicant with reference to an earlier point in time. The applicant submitted further that under the Trust Deed the invalidity benefit was not payable until a determination was made in regard to it (Telstra Super v Flegeltaub (2000) 2 VR 276). No such determination was made until 2 November 2001 at the earliest, and the applicant was advised of it on 15 November 2001.

13. In further submissions lodged on 4 December 2002 the applicant submitted that the calculations in s21(3) of the Act are not to be made until s21(1) is first applied to a compensation recipient. Until the Trustee under the Trust Deed made the decision that the applicant could access invalidity benefits, s21 did not apply to her; only s19 did. She submitted that the reference to for each week after the date of the retirement in s21(3) serves only to make clear that compensation under s21 cannot be paid prior to retirement.

14. The applicant submitted that this was a plain reading of the Act, which was supported by the principles of legislative interpretation, including that this legislation should be given a beneficial reading and should have prospective operation only. She submitted that on the day after her retirement it could not be said that s21 of the Act applied to her. To read the section as the respondent submitted would be to give it retrospective operation (Yew Bon Tew alias Yong Boom Tiew v Kenderaan Bas Maria [1982] 3 All ER 833; Metropolitan Film Studios Ltd v Twickenham Film Studios Ltd [1962] 3 All ER 508). She submitted that the imposition of a liability under s21 where none existed, after she had been properly paid under s19 of the Act, was harsh and unfair. The applicant submitted that the respondent's reliance on the terms of the Trust Deed to interpret the Act was impermissible.

15. The applicant submitted that the definition of AC in s21(3), as it uses the words would have been payable, confirmed that the provision was meant to apply prospectively only, after the lump sum was received as referred to in s21(1).

16. The respondent submitted that the Trust Deed contemplates a lapse of time between ceasing employment and the grant of a payment for invalidity. The respondent relied upon the Federal Court decision in Archer, and the Tribunal decision in that matter (Re Archer and Comcare (1999) 61 ALD 521), to support the submission that a recalculation for past periods is possible under s21 of the Act. The respondent submitted that no issue of retrospectivity arose, because s21 was neither new nor amending legislation that might impact on accrued rights. Further, under the Act a reconsideration of liability having retrospective effect is permissible (Reitano v Commonwealth of Australia (1985) 9 ALN N201).

17. The respondent submitted that s21(2) and s21(3) must be read together, to provide that a determination of compensation liability had to be made for each week after the date of retirement. Thus, the formula in s21(3) requires that payments be adjusted from the date of retirement once an invalidity payment was made. The respondent submitted that the definition of AC in s21(3) referring to the amount of compensation that would have been payable...if section 19...applied was capable of referring retrospectively to the amount of compensation that had been paid.. The applicant submitted that, to the contrary, the definition of AC, as it uses the words would have been payable, confirmed that the provision was meant to apply prospectively only, after the lump sum was received as referred to in s21(1).

18. The respondent submitted that requiring the applicant to repay was not unfair to her as it was her choice to claim an invalidity payment under the Scheme, and the lump sum was money from which she could repay an overpayment. The respondent submitted that greater unfairness would arise if the applicant's interpretation prevailed, as a compensation recipient could delay claiming invalidity payments in order to avoid the operation of the Act. The respondent submitted that there was no need to rely on principles of construction for remedial or beneficial legislation, or those pertaining to legislation impacting on vested rights. The words were plain and required that the liability to pay was for each week after the date of retirement.

19. Both parties referred in submissions to the interaction between the recovery provisions and s21 of the Act. Section 114B of the Act provides for certain recovery measures where a person has claimed a lump sum of superannuation as follows:

114B(1) If:

(a) an employee retires from his or her employment; and

(b) the retired employee is or may be entitled to a pension or a lump sum, or both a pension and a lump sum, under a superannuation scheme; and

(c) Comcare or a licensed authority is of the opinion that it may pay, or may have paid, to the retired employee an amount or amounts of compensation under this Act in excess of the amount or amounts that he or she was entitled to receive because of section 20, 21 or 21A;

the following provisions of this section apply...

20. While the respondent submitted that the liability for overpayment in this case arose under s114(1)(c) of the Act, the respondent nevertheless relied upon s114B of the Act as supporting its interpretation of s21. The respondent said that s114B contemplates that a retired person has an entitlement to a pension or lump sum and that Comcare may have paid an amount of compensation in excess of that which would have otherwise been calculated under s20, s21 or s21A.

21. The respondent submitted that the reference in s114B(1)(c) to may have paid...an amount or amounts makes it clear that Parliament intended to enable readjustments to occur, so that past payments are recoverable. The respondent submitted that the provision made in s114B(5) and s114B(7) confirmed that s21 must be construed as allowing more than merely prospective adjustment of the rate of compensation, once a lump sum is received.

22. The applicant submitted that the absence of any specific legislative provision in the Act to recover an overpayment directly from the applicant, when specific provision was made to recover from the Administrator under s114B meant that the respondent's attempt to recover here from the applicant was misconceived. In support of this submission the Tribunal was referred to s114(1A). The applicant submitted that the principle of construction expression unius est exclusio alterius (to express one thing is to exclude another) should be applied. It was submitted that where specific provision is made in s114B to recover from the administrator, and since s114(1A) sets out that s114(1)(b) (referring to compensation paid to a person under this Act that should not have been paid) is not applicable if the respondent is entitled to recover under s114B, s21 should not provide an alternative basis of recovery.

23. The Tribunal reached its decision taking into account the submissions of the parties and the authorities to which the parties referred. There was no dispute that the applicant is an employee as referred to in s21(1) and defined in s5 of the Act, or that she retired because she was incapacitated for work. The Tribunal is satisfied also that the TelstraSuper Trust Deed is a superannuation scheme within the meaning of s4(1) of the Act. The decision in Re Hammerton and Comcare (1995) 21 AAR 204 established that no more than a temporal link is required between the incapacity for work and the person's retirement. The temporal connection is present in this case.

24. The cases interpreting the meaning of receive conclude that the word should be given its ordinary and natural meaning within the context in which it is used. In Rose v Secretary, Department of Social Security (1990) 21 FCR 241 the Full Court of the Federal Court said that in the phrase earned derived or received in the Social Security Act 1947, received had the meaning of realised. In Re Secretary, Department of Social Security and Jessop (1989) 17 ALD 62, the Tribunal said (at 65):

...

(13) The applicant's argument was that the words "is not receiving" in s 73 have a plain meaning and that there was no need to go beyond that. I find myself in agreement with this approach. In the Shorter Oxford English Dictionary, the relevant meanings of "receive" are "to take in one's hand, or into one's possession...to take delivery of a thing from another, either for oneself or for a third party...to accept something offered or presented". The ordinary and natural meaning of the word "receive" has reference to the physical act of taking something into one's possession. "Receiving" and "is not receiving" have corresponding meanings. There is nothing difficult or obscure in understanding the meaning of these words, either in the abstract or in the context in which they are found. ...

25. In Archer the Full Court of the Federal Court said that the term received must be interpreted taking into account its context. The Court said also that the Act made provision in certain sections for superannuation being payable. In other places the reference was to receipt. A lump sum is received, the Court said, when a benefit that is payable to an employee has been paid to the employee at his or her direction.

26. The parties do not dispute that the applicant received a superannuation benefit, in the sense referred to by the Federal Court in Archer and by the Tribunal in Re Hammerton. There was no dispute that as a result of the applicant's claim for invalidity benefits a decision was made in or about November 2001 that she was eligible, nor was it disputed that the invalidity payment had the character of a lump sum. An amount was either paid to her or became subject to the applicant's direction, as was discussed in Archer. The exact date on which this occurred was not clear on the material before the Tribunal. Applying Archer, the earliest date that receipt occurred was the date that the applicant either directed that part of the sum be rolled over, or when the money came into her hands. There was no dispute that the invalidity payment was calculated with reference to the whole period from her retirement in 1999. The dispute was, in fact, less about the meaning of receives than about the effect of receipt.

27. Division 3 of the Act provides for payments in respect of incapacity for work. Sections 19, 20, 21 and 21A provide formulae for establishing rates of payment of compensation. As the Tribunal said in Re Hammerton, s19 applies to an employee who is incapacitated for work as a result of injury, but not if other provisions, including s21, apply (s19(1)). Sections 20, 21 and 21A deal with the situations where a person, incapacitated for work, retires and receives superannuation, whether as a pension (s20), as a lump sum (s21) or as a combination of both (s21A).

28. The terms of the Trust Deed (clause 1.22.4) provide that entitlement to invalidity benefit requires that a claim be made within a year of retirement. There is a further requirement that the person be continually absent from active work for at least six months. That is, it will be usual that there are delays due to time limits, and also delays occurring between the date of lodgement of a claim and the date of a decision regarding that claim.

29. Section 21(1) of the Act comes into operation when a person receives a lump sum benefit. Subsection 21(2) then provides liability under the Act to pay the employee for each week after the date of retirement using the formula in s21(3). The Tribunal accepts the submission of the respondent that the words in accordance with this section for each week after the date of the retirement, as used in s21(2), are sufficient to allow the adjustment to be made for payments of compensation made prior to the date the person receives the lump sum. The Tribunal concludes that the definition of AC in s21(3) referring to the amount of compensation that would have been payable (if section 19 applied), includes amounts which have been paid under s19. Therefore, the use of the expression does not exclude amounts that were paid under s19. A recalculation has to occur as soon as a compensation payer knows that a lump sum has been received. The Tribunal does not accept that because s21(1) refers to the point in time when a person receives the lump sum, the section has no operation for a period prior to that point in time. If that were so, there would be no need for the words in accordance with this section for each week after the date of the retirement in s21(2) .

30. Therefore, the Tribunal rejects the submission of the applicant that the identification of a date of receipt in s21(1) creates two discrete periods of time and that the payment of compensation in the period prior to receiving the lump sum cannot be revisited. This would have the effect of allowing double dipping in the period that predated the receipt of the lump sum.

31. The decision under review, being one made under s21, is reviewable by this Tribunal because of the specific reference in s62 of the Act. However, the decision (T9) about an overpayment, said by the respondent to be one raised under s114(1)(c), is not a decision that is reviewable by the Tribunal. The Tribunal has power to review overpayments under s114B, but has no general power to review overpayments under the Act.

32. Subsection 114(1) and (1A) of the Act provide that:

114.(1) Subject to subsection (1A), if:

(a) an amount of compensation under this Act has been paid to a person in consequence of a false or misleading statement or representation or in consequence of a failure or omission to comply with a provision of this Act;

(b) an amount of compensation that has been paid to a person under this Act should not have been paid; or

(c) a person is liable to pay an amount to a relevant authority under this Act;

the amount concerned is recoverable by the relevant authority from the person in a court of competent jurisdiction as a debt due to the relevant authority.

(1A) Paragraph (1) (b) does not apply to an amount of compensation that the relevant authority is entitled to recover under section 114B.

33. The applicant submitted that it is difficult to reconcile the specific provision made for recovery in s114B of the Act with the general power which the respondent said was used as the basis of recovery against the applicant, namely s114(1)(c) of the Act. The Explanatory Memorandum to the legislation introducing s114B into the Act (Industrial Relations and Other Legislation Amendment Act 1993) states that s114B was introduced to provide a mechanism of recovery directly from the superannuation fund, but only if the benefit had not been paid to the employee. The Explanatory Memorandum also states that under the existing provisions in the Act, recovery of overpayments directly from the employee was administratively difficult and could cause hardship. It is clear from the Explanatory Memorandum that s114B was introduced to extend the avenues of recovery, beyond those already available directly from the applicant, to recovery from the superannuation scheme, but only if the applicant had not already received the payment, whether lump sum pension or both.

34. It appears that any recovery of an overpayment directly from the applicant occurs under s114(1)(b) of the Act, not under s114(1)(c) as submitted by the respondent. On a construction of the Act that takes into account the purpose of introducing s114B, recovery from the applicant is not excluded under s114(1)(b) by the operation of s114(1A), where an applicant has received a lump sum. Given the nature of the interaction of the recovery provisions, referring to separate sources of recovery before and after receipt of a lump sum, the maxim of statutory interpretation, expressio unius, relied upon by the applicant has no role to play in interpreting the operation of s114 and s114B of the Act nor, by extension, the interpretation of s21 of the Act.

35. For these reasons, the Tribunal in substance affirms the construction of the Act on which the decision under review (set out at paragraph 5 above) relies, allowing for recalculation under s21 of the rates of compensation payable to the applicant on and from 16 November 1999. It appeared from the submissions that there may be necessity to recheck the figures used in the recalculation. The respondent suggested that the Tribunal could undertake that task. However, the preferable course is to set aside the decision under review to allow the respondent to recheck all figures used in the calculation.

DECISION

36. The Tribunal sets aside the decision under review and remits the matter to the respondent with a direction to recalculate the amount of compensation under the formula in s21(3) of the Safety, Rehabilitation and Compensation Act 1988.

I certify that the thirty-six [36] preceding paragraphs are a true copy of the reasons for the decision of:

M.J. Carstairs, Member

(sgd) Catherine Thomas

Clerk

Date of hearing: 20 November 2002

Date of decision: 11 June 2003

Counsel for applicant: Mr P. Bingham

Solicitor for applicant: Maurice Blackburn Cashman

Counsel for respondent: Mr J. Lenczner

Solicitor for respondent: Sparke Helmore