CATCHWORDS ADMINISTRATIVE LAW - Appeal from Administrative Appeals Tribunal - Compensation (Commonwealth Government Employees) - Refusal to redeem liability to pay compensation by payment of a lump sum - Refusal upheld by A.A.T. - Error of law. WORKERS' COMPENSATION - Application to have liability to pay compensation redeemed by payment of a lump sum - evidence that Applicant may no longer be incapacitated - foreshadowed application by employer for reconsideration of entitlement to compensation - both applications remitted back to the Commissioner for Employees' Compensation. Administrative Appeals Tribunal Act, 1975, ss. 43(1), 44, 45 Compensation (Commonwealth Government Employees') Act, 1971, ss. 20(4), 46(2), 49. FREDERICK VICTOR REITANO v. THE COMMONWEALTH OF AUSTRALIA Qld G97 of 1982 FITZGERALD J. BRISBANE 27 OCTOBER 1982 11 NOV 1982 FEDERAL CCURT OF AUSTRALIA PRINCIPAR, IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) No. G97 of 1982 GENERAL DIVISION ) BETWEEN: FREDERICK VICTOR REITANO Applicant AND: THE COMMONWEALTH OF AUSTRALIA Respondent ORDER JUDGE MAKING ORDER: FITZGERALD J. DATE OF ORDER: 27 OCTOBER 1982 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The appeal be allowed; 2. the Respondent pay the Appellant's taxed costs of and incidental to these proceedings; 3. the decision of the Administrative Appeals Tribunal to affirm the decision of the Commissioner for Employees' Compensation, that the Applicant's request made under s.49 of the Compensation (Commonwealth Government Employees') Act 1971 to have payments of 2. compensation in respect of his partial incapacity redeemed by payment to the applicant of a lump sum be refused, be set aside; 4. the decision of the Commissioner for Employees' Compensation to refuse the Applicant's request made under s.49 of the Compensation (Commonwealth Government Employees') Act 1971 to have payments of compensation in respect of his partial incapacity redeemed by payment to the applicant of a lump sum be set aside; 5. the matter be remitted to the Commissioner for Employees' Compensation to reconsider the applicant's request made under s.49 of the Compensation (Commonwealth Government Employees') Act 1971 to have payment of compensation in respect of his partial incapacity redeemed by payment to him of a lump sum, and the determination of 3 April 1981 of a delegate of the Commissioner that the applicant is entitled to compensation from 1 September 1980 until a date to be determined by the Commissioner or his Delegate of payment of $105.00 per week in respect of compensation for partial incapacity. IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) No. G97 of 1982 GENERAL DIVISION ) BETWEEN: FREDERICK VICTOR REITANO Applicant AND: THE COMMONWEALTH OF AUSTRALIA Respondent APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL EX TEMPORE REASONS FOR JUDGMENT FITZGERALD J. 27 OCTOBER 1982 -- On 7 March 1980, the Commissioner for Employees' Compensation determined under the Compensation (Commonwealth Government Employees) Act 1971 the Attorney-General's Department was not liable to pay compensation in respect of Mr Reitano's incapacity for work since 4 February 1980. On 17 February 1981, the Commonwealth Employees Compensation Tribunal set aside that determination and remitted the matter to the Commissioner for Employees' Compensation with the direction that after 4 February 1980 Mr Reitano has been partially incapacitated and entitled to an amount for the time being prescribed by the relevant provisions of the Act. Sub-section 49(1) of the Act provides as follows: "Subject to this section, where payments of compensation in respect of an injury have been made to an employee under section 46 for a continuous period of not less than six months, the employee may request the Commissioner in writing that the liability of the Commonwealth to make further payments to the employee under that section be redeemed by the payment to the employee of a lump sum." On 30 April 1981, the applicant's then solicitors made a request in writing to the Commissioner on behalf of Mr Reitano that the liability of the Commonwealth to make further payments of compensation for partial incapacity for work to Mr Reitano under s.46 be redeemed by the payment to Mr Reitano of a lump sum. Although it was submitted for the Commonwealth that sub-s. 49(5) of the Act, which I set out below, assumes permanent partial incapacity, I did not understand it to be submitted that no order for lump sum redemption could be made in respect of the compensation payments payable under the determination of 3 April 1981. The Commissioner for Employees' Compensation arranged for Mr Reitano to be medically examined by Dr Miles Murphy, a specialist physician in Brisbane, and received a report dated 22 July 1981. Purporting to rely on Dr Murphy's report, the Commissioner rejected Mr Reitano's 5. The Tribunal referred in this connection to s.43 of the Administrative Appeals Tribunal Act 1975 and Drake v. Minister for Immigration and Ethnic Affairs (1979) 24 A.L.R. 577. It noted that sub-s. 49(3) of the Act required a determination of whether the liability of the Commonwealth was to be redeemed by the payment to Mr Reitano of a lump sum and, if so, the amount of the lump sum, and set out sub-s. 49(5) of the Act which provides: "The Commissioner shall not make a determination that the liability of the Commonwealth to make further payments to an employee under section 46 is to be redeemed unless he is satisfied that - {a) the injury is not likely to result in the employee becoming totally incapacitated for work; (b) the employee intends to use the lump sum in a manner -- that is particularly advantageous to the employee; _and (c) in all the circumstances it 1s desirable in the interests of the employee that the liability of the Commonwealth be redeemed. The amount of any lump sum is required to be calculated in accordance with sub-s. 49(4) of the Act. The learned Senior Member of the Administrative Appeals Tribunal said that he was satisfied that each of the matters referred to in sub-s. 49(5) of the act Further, the Administrative Appeals Tribunal said that: ",.. the relevant considerations must include the question whether or not the condition giving rise to the applicant's entitlement to partial incapacity payments has so stabilised as would be likely to continue and be capable of quantification having regard to the matters required to be taken into account in subsection 49(4) of the Act in determining the amount of any lump sum or redemption [Hatton v. Victoria Railways Commissioners (1935) V.L.R. 33]." In my opinion there is no need to comment on the correctness of these views in this case. The Administrative Appeals Tribunal had before it not only Dr Murphy's report but also evidence * which he had given before the Tribunal, which might support an attempt by the Commonwealth to establish that Mr Reitano is no longer entitled to payment of compensation for partial incapacity for work. The Tribunal was informed that the Commonwealth felt encouraged by Dr Murphy's evidence to request a re-consideration of Mr Reitano's entitlement subject to the outcome of Mr Reitano's present application for lump sum redemption. In this regard the Tribunal noted that the determination of 3 April 1980 was expressed to apply only "to a date to be determined by the Commissioner or his Delegate" amd that there was nothing in the decision of the Commonwealth Employees' Compensation Tribunal leading to that 9. in my view, be premature to make a determination for redemption at this stage. The applicant's entitlement to weekly payments will, of course, continue in accordance with the terms of the determination dated 3 April 1981." Mr Reitano has appealed to this Court. seeks orders that his request under s.49 of the Act to have payments of compensation in respect to the partial incapacity redeemed by payment to him of a lump sum be granted and that the Court determine the lump sum to be paid to him in accordance with his entitlement at law. The grounds of his appeal are that: "The Tribunal erred in respect to the -- following questions of law:- (a) (b) the Tribunal failed to base the exercise of its discretion upon the evidence presented to it and the findings of fact made by it; the Tribunal based the exercise of its discretion and its consequent finding upon irrelevant factors and/or propositions not proved in evidence and/or contrary to evidence and/or propositions not accepted as findings of fact by the Tribunal, namely:- (2) That very difficult questions arise in determining the extent to which a person's employment may be a contributing factor to the long term aggravation of his hypertension; 11. to assume Mr Reitano's partial incapacity, and his evidence touched only incidentally upon whether or not Mr Reitano continued to be partially incapacitated for work, a matter upon which there was no other acceptable evidence. That issue was at least faintly raised but never joined by the parties before either the Administrative Appeals Tribunal or the Commissioner for Employees' Compensation. The power of the Administrative Appeals Tribunal is a power of review and thus it may well be that it could not have reconsidered the determination of 3 April 1981 in the present proceedings: cf. Roidoulis v. Australian Postal Commission, unreported judgment of Keely J., 16 April 1981, and Commonwealth of Australia v. Hawkins, unreported judgment of Keely J., 22 April 1981. It, of course, does not follow that an application for lump sum redemption could not or ought not be dismissed if it appeared either from the evidence before either the Commissioner or the Administrative Appeals Tribunal that an applicant for redemption no longer had a work- caused partial incapacity. Whether or not the considerations in sub-s. 49(5) of the Act should otherwise be considered exhaustive of the matters relevant to the exercise of the discretion to grant or refuse redemption, there is, to my mind, much to be said for the proposition that, at least in a case such as this, having regard to the determination of 3 April 1981, it would justify refusal 13. concluded in such circumstances that he no longer continues to be entitled to compensation because he is no longer partially incapacitated. The question which falls for decision therefore is, what should have been done by the Administrative Appeals Tribunal in such circumstances. While there is something to be said for the view that there was no reason to refuse the application for redemption in view of the Commonwealth's failure to establish that Mr Reitano was no longer partially incapacitated for work, I am not prepared to say that the Administrative Appeals Tribunal was incorrect in not taking that course in view of the doubt which it seems to have felt as to that question as a result .of Dr Murphy's evidence. Regrettably, however, I do not think that the course which the Administrative Appeals Tribunal followed was satisfactory. The affirmation by the Administrative Appeals Tribunal of the decision which it was called upon to review left standing the refusal of Mr Reitano's application for lump sum redemption without any full consideration of the merits, and, indeed, with Mr Reitano having succeeded on every question in fact litigated. It 1s no answer that the effect of the Administrative Appeals Tribunal 15. "20(4) Where a determination has been made under this Act - (a) the Commissioner may, of his own motion, whether or not the proceeding has been instituted or pleaded under Part V in respect of the determination, reconsider a determination and may, if he thinks fit, make a determination varying or revoking the first mentioned determination. It was in my opinion plainly within the power of the Administrative Appeals Tribunal to remit the matter to the Commissioner for Employees' Compensation and direct him to reconsider it under para 20(4) (a) of the Compensation (Commonwealth Government Employees) Act. The order of the Court is that the appeal be allowed and that the respondent pay the appellant's taxed costs of and incidental to these proceedings. Pursuant to s.44 of the Administrative Appeals Tribunal Act, the Court orders that the decision of the Administrative Appeals Tribunal to affirm the decision of the Commissioner for Employees' Compensation, that the applicant's request made under s.49 of the Compensation (Commonwealth Government Employees) Act 1971 to have payments of compensation in respect of his partial incapacity redeemed by payment to the applicant of a lump sum also be set aside.