CATCHNORDS Administrative Law - Social Services Act - the test to decide whether a person is permanently incapacitated for work pursuant to ss.23 ind 2¢ - 5.1351! - the meaning of "reahebilitation" in the context of s.i35M - the factors the Director-General of Social Security should take into account before refusing or cancelling a pension - the relationship of s.135iH to s.23. Social Services Act 1347 - ss.23, 24, 134, 125, 135M. J. DRAGOSLOVIC ve THE DITRECTOR~GENERAL Or SOCTAL SECURITY VG No. 155 of 1983 6 February 1964 Smithers J. Melbourne. IN THE FEDEPAL COURT OF AUSTRALIA VICTORIA DISTRICT PEGISTRY VG NO. 155 OF 1983 GENERAL DIVISION Between: gd. DRAGOJLOVIC (Applicant) And: THE DIRECTOR GENERAL OF SOCIAL SECURITY (Respondent) dJudee Making Order: Smithers J. Date of Order: 6 February 1984 Where Made: Melbourne. ORDER THE COURT ORDERS THAT: — (1) the appeal be allowed; (2) the matter be remitted to the Administrative Appeals Tribunal for further consideration in accordance with the principles enunciated in the reasons for judament delivered this day; and (3) the respondent pay the costs of and incidental to this appeal. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG NO. 155 OF 1983 GENERAL DIVISTON J. DRAGOTLOVIC bast [o) ct PH xe Dv 1D ee] (Applicant ) And: THE DIRECTOR GENERAL OF SOCIAL SECURITY (Respondent) Coram: Smithers J. 6__February 1984 REASONS FOR JUDGMENT This is an appeal against a decision by the Administrative Appeals Tribunal (the Tribunal) confirming an order by the respondent cancelling an invalid pension formerly granted to the applicant. The @ecision of the Tribunal proceeded on a finding that the decision of the respondent should be confirmed because the Tribunal found as a fact that the applicant had refused, unreasonably, to undergo 4 surciceél operation, namely a lumbar laminectomy (laminectomy) for the purpose of relieving his condition cf incapacity to work. The appeal is brovght on a question of law expressed in the notice of appeal in a form which the respondent conceded should be treated as embracing the question whether the Tribunal or the respondent had authority to cancel the pension unless the applicant underwent the operation or whether the Tribunal misdirected itself in holding that, in view of the finding that the refusal af the applicant to undergo a laminectomy was unreasonable, the respondent's decision to cancel his pension should be confirmed. Deputy President Todd said in Korovesis ov. Director General of Social Security (unreported) 11 November 1983 Administrative Appeals Tribunal No. N82/30 that a claimant for & pension under Section 23 et seq of the Social Services Act 1947 (the Act) "cannot be compelled to have an operation". He was speaking of an operation of a major kind such as a laminectomy. To my mind this observation provides the key to the solution of the problem before me in this appeal. From the terms of the Act and Part III in particular, I infer that it is a& purpose of the Act that, "subject to the Act", persons who are in fact permanently incapacitated for work shall be qualified to receive an invalid pension: see s.24 of the Act. Following the observation of Deputy President Todd it may be noted that a person who is ina state of incapacity for work which would be relieved by a particular operation but who cannot have that operation, because of genuine fear of the operation which he cannot overcome, remains incapacitated as long as that fear persists. He remains so thether his fear is reasonable or unreasonable. So long as that fear persists, and it may he permanently, there is in the community a person who is incapacitated for work. It is not compatible with the purpose of the Act that a person who is auncapacitated as a result of his physical and menzval condition should not qualify for a pension. Yet that situation has been accepted in some cases in the Tribunal in respect of persons whose rerusal to undergo operative treatment is regarded, objectively, as unreasonable. This has occurred because it was considered that the principles. applicable in workers compensation claims and ain relation to claims in tort for damages for personal injuries are applicable to claims under s.23 and, in this case, in relation to the operation of s.135M of the Act. It was regarded as established that in workers ccmpansation clains and claims in tort, compensation or damages are not awarded in respect of consequences of injuries which can be eliminated by medical or surgical measures which it would be unreasonable, objectively regarded, for the injured person to fail to take. Thus a refusal unreasonable, objectively regarded, to undergo an operation which would reduce the consequences of an injury would reduce compensation or damages payable. Thus, in WTilknaz v. Director General of Social Services (1981) 4 ALN 44, it was found that an applicant was not permanently incapacitated for work on the ground that he had wilfully and unreasonably refused medical treatment which in all probability would have reduced the incapacity to less than eighty five per cent. The same principle was applied by the Tribunal in this case. However, in Korovesis' Case (supra) Deputy President Todd said at pp.10 and 11:- "Tt was held that in both areas the common law doctrine of mitigation of damage was a rational basis for the rules about unreasonable refusal of treatment. But the situation under the Social Security Act appears to me to be quite different. There as not, I consider, a question of a straight translation into the invalid pension context of the rules applicable in workers compensation or of the common law rules relating to mitigation of damage. The extent to which the law will provide for the recovery of damage for torticus loss involves questions of public policy relatino to the bearing of loss by tortteasor and injured persons respectively. See the Giscussion of the problem in Calter Oil ov. "Tiillomstead" (1976) 11 ALR 227.32 In a situation invelving 5. employer and employee, where the employer may be liable both at common law and under workers compensation legislation, questions of mitigation of damage take on their own particular flavour. But there is no element of compensation or redress of damage involved in the provisions of the Act in question. Those provisions relate to the objective provision of a minimum level of support, to determining whether a "safety net" should be placed under a person in crisis. In the case of invalid pension such support is to be given where he or she is, for the foreseeable future, incapacitated for work." It appears to me that those observations are well founded. In workers compensation and personal injuries claims one person is claiming against another in respect of a liability created by law to compensate the injured person to the extent of his loss. The notion is that the injured party, having been given a right at law to be compensated by the other for disability suffered, should not be compensated for disability which can be avoided or cured if reasonable medical treatment is undertaken. In both cases the extent of the liability is and ought reasonably to be measured by the extent of the disability suffered. The notion of there beinga reciprocal duty on the claimant accords with the justice of the situation and' is compatible with the class of legal liability involved. No doubt the case of a person who for psychological reasons simply cannot undergo treatment objectively ceasonable would require special consideration in the light of the existence of a duty to mitigate. It vas said in the unanimous judgment of the High Court in Fazlic v. Milingimbi Community Inc. (1981) 38 ALR 424 at 427 that:- "No doubt it will be but rarely that an employer does not succeed in establishing that worker's refusal is unreasonable when the worker has allowed baseless fear to decide his choice, outweighing his knowledge of cogent factors favouring his undergoing an operation." But the possibility of such rare cases appears to be recognized. Under the Act the rationale depends not, in any relevant sense, on the measurement of any particular injury, or upon the existence of any duty in the claimant, but upon the existence of a defined disability. It dépends on the existence of a single state of fact, namely whether or not within the meaning of the words used in the statute, the applicant is permanently incapacitated for work. It 1s for social purposes that it is done that way. The Act is concerned with the fact, and not with the performance by the claimant of some notional duty to mitigate the severity of the disability causing his incapacity. Whether the fect, namely permanent incapacity for 7. work, 18 established is to be decided by reference, inter alia, to the availability of remedial treatment. A disability which can be relieved by treatment which is reasonably available is not permanent. But where the claimant is a person who actually cannot, for fear, or religious beliefs, for example, or for some other reason of a genuinely compulsive nature, accept that treatment, the question is whether his disability is one which can, in fact, be relieved. In this case the applicant is permanently incapacitated for work, at least unless he undergoes a laminectomy and, possibly, he may remain so even if he does. He has a fear of undergoing the treatment which he has not overcome, even when faced with the prospect of cancellation of his pension. Whether this fear be reasonable or unreasonable or even baseless, in the light of the applicant's knowledge of the cogent factors favouring his undergoing of the operation, the applicant will remain incapacitated so long as 1t lasts. If the fear actually is compelling and permanent then the incapacity is permanent. In that case the fact upon which entitlement under the Act depends 15 established. Of course, it has been felt to be unsatisfactory that a person whe refuses to undergo treatment which would probably cure his incapacity and which it would be 8. reasonable, objectively regarded, for him to undergo, should qualify for a pension. Common sense suggests that 1t would be unfair that the community should pay a pension to such a person. As a result, 1t has been thought proper to import, by analogy, the notion that incapacity which is curable by the adoption of measures which it is objectively reasonable to take, is not permanent incapacity. There is however, in my opinion, no warrant for Jv this. Under the Act qualification for a pension depends upon a state of fact. The Act does not lay dotwm as a condition of the qualification that there be a reasonable cause for its existence. At the same time, to treat an incapacity as permanent, simply because a claimant will not take steps to be cured would be unacceptable from any point of view. A person with diabetes who refused to take insulin could hardly be thought, without more, to be permanently incapacitated. But if further facts be added such as the person refused insulin on genuine and compelling religious grounds, or because of a baseless but genuine fear of death or unjury therefrom, then the situation is different. Unless violence is done to the belief or to the fear, notionally or in reality, the person concerned remains incapacitated. To my mind the Act is intended to provide financial support foc persons permanently 9. incapacitated for work in this way. However, it is one thing to approach the problem having in mind persons tho genuinely, because, for instance, of religion or fear cannot adopt remedial medical treatment and whose situation has nothing to do with entitlement to a pension and another to approach the problem having in mind persons who are incapacitated for want of medical treatment, if that want is but the result of a tactical exercise designed to obtain a pension which lacks bona fides. It 1s not to be thought that Parliament intended that a person incapacitated in such a way is a person permanently incapacitated for the purposes of qualifying for the statutory pension. In any case ain wvwhach treatment is refused the question for the respondent or the Tribunal is not whether the refusal is reasonable or otherwise, "but whether, on the probabilities, the refusal is genuinely based on grounds which, in fact, compel the person concerned, acting honestly, so to refuse. Questions involving the reality of alleged reasons for action and involving their bona fides are commonly _encountered ~ in the course of the judicial process. When they are encountered, in the context of a refusal to undergo treatment for a Gisability, the reasonableness of the treatment in contemplation is, of course, a factor of importance. it is & question, when deciding if, an fact, a person is permanently incapacitated for work. The question ovght 10. to be resolved on the basis that a person is so permanently incapacitated when his incapacity is such that it can only be relieved by treatment of sucha nature that in the opinion of the fact finding Tribunal he cannot undergo it. A person who is genuinely constrained by religion or fear which he cannot overcome is no doubt such a person. But there may well be cases in which on other genuine grounds it would not be reasonable to expect a claimant for a pension or a pensioner to undergo particular treatment of a remedial nature. Dealing with the plain question of fact, with respect toa man who can be cured only by treatment objectively reasonable, but, actually not available to him because of fear or other genuine reason, a Tribunal would, 1n my opinion, find that that man was permanently incapacitated for work within the meaning of s.23 of the Act. In the decis1on under appeal it was argued by the respondent that the applicant was permanently incapacitated for work because of his refusal to undergo what was admittedly a serious operation. The Tribunal found that the applicant had unreasonably refused to underge that surgery. However, he did not approach the problem befcre him by way of s.232 of the Act, but appears to nave treated the applicant's condition as satisfying the criterion of permanent incapacity for ll. work as provided in that section. He said: "Accordingly, the decision in the matter cancelling the applicant's invalid pension will be affirmed. This will, hovever, be pursuant to s.135N of the Social Security Act 1947 and not section 23". Accordingly the construction of s.135M requires consideration. "135M. (1) The Director-General may, having regard to the age and to the mental and physical capacity of a person who is a claimant for a pension or 18 &@ pensioner, and to the facilities available to that person for suitable treatment for physical rehabilitation and suitable training for a vocation, reruse to grant a pension to that person or cancel or suspend that person's pension, unless that person receives such treatment or training. — (2) For the purpose of Part III, a claimant for a pension, or a pensioner, who is receiving such treatment or training may be deemed, during the period of that treatment or training, to be permanently incapacitated for work." There are points to be noted with respect to s.135M. Firstly, s.135M deals with pensions in toto whereas s.23 relates solely to invalid pensions. If one tales an historical overview s.135M did originally relate to only invalid pensions but that is no longer so. v Secondly, s.135M relates to claimants for a ta 12. pension, or a pensioner. The word "claimant" is defined an s.134, in relation to a pension, as a person who has lodged aclaim for, and is qualified to receive that pension. Therefore, in the contest of this case s.135M applies to persons who are qualified to receive invalid pensions by virtue of ss.23 and 24 as well as to persons already receiving pensions. It is to be noted that s.135M deals at first sight with the same subject matter as 5.134 in the Social Services Consolidation Act 1947 (the 1947 Act). "134.-(1.) The Director-General may, having regard to the age and to the mental and physical capacity of a claimant for an invalid pension or cf an invalid pensioner, -and to the facilities available for suitable training for a vocation or suitable treatment for physical rehabilitation, direct that an invalid pension shall not be granted, or that an invalid pension shall not be continued, unless the claimant or pensioner undertakes such training or treatment. (2.) Where the claimant or pensioner undertakes such training or treatment, or where the pensioner is already undergoing such training or treatment, the claimant or pensioner may be deemed, during the period of training or treatment, to be permanently incapacitated for vork for the purposes of Part TII. of this Act." However, it would appear that training contemplated in s,134 of the 1947 Act was training suitabie for a vocation, but that the treatment contemplated therein vas quite general, namely suitable treatment for rehabilitation. hlso, the reference to rehabilitation is such that the provision appeared to provide for training for a vocation, or for rehabilitation for restoration of the health in general of the person concerned. But in $.135M the reference to what 138 contemplated is directed to facilities available for suitable treatment for physical rehabilitation and for suitable training for a vocation. The introduction of "and" in place, of "or", has significance. It indicates that there is unity in the object for which the facilities are to be available. To my mind that unity is to be found in the notion that the object of both the rehabilatarion and the training is a vocation. In other words, the provision is that the Director-General is to take into account facilities available for suitable rehabilitation for a vocation and suitable training for a vocation. The construction gives a meaning to the section more practical and more in accordance with the general purpose of the Act than that of the rehabilitation provision in s.134 of the 1947 Act. Mere general rehabilitation of a person is noc an object of the Act. Rehabilitation in gross, soa to speak, is not something 'which is af concern to the Act. But rehabilitation directed to fitting a4 ferson for a vocation would be. This approach gives point also 14. to the expresston "suitable" in relation to cehabilitation. Tf rehabilitation were just rehabilitation in general the adjective suitable really has no point. The question would be suitable for what? The answer would be "suitable for a degree of rehabilitation the Director-General considers good for the person. This is not an acceptable concept. The undergoing of suitable rehabilitation for a vocation is something which is in harmony with the Act and might reasonably be made a condition of the continuance or even the grant of a pension. But rehabilitation for its own sake to some unspecified degree for no purpose but an improvement in health could not rationally be made such a condition. Accordingly I am satisfied that in the application of s.135M in relation to the matter of rehabilitation the respondent and the Tribunal must have regard toa vocation, reasonably specifically in contemplation. The appearance of the word "or" in the last words of s.135M "unless that person receives such treatment or training" rather than "and" is not of significance. Once it appears that facilities are available to a pensioner or claimant for a pension for suitable treatment for his rehabilitation and training for a i5. vocation the failure of the person concerned to receive such treatment or such training would be a logical and reasonable cause for refusing or cancelling a pension. If the matter be approached by way of s.135M the question' is not whether the refusal of the applicant to undergo the operation is reasonable or unreasonable. The question is whether, having regard to the age and mental and physical capacity of the apolicant and to the facilities available to him for suitable treatment for physical rehabilitation and suitable training for a vocation and the failure of the applicant to receive such treatment or training, the pension awarded to the applicant should be cancelled. Clearly the question which arises under s.135M aiffers from that arising under s.23. There is a discretion to be exercised under s5.135M. Var1ous questions arise? Pirst, does the section contemplate that before exercising his discretion to refuse or cancel a pension the respondent shall indicate to the applicant the treatment or training facilities which he considers to be available and of which he considers the person concerned should avail himself? I do not doubt that it does. The second question is what kind of treatment is 16. contemplated in the expression "suitable treatment for physical rehabilitation"? It is clear that reference to the age and mental and physical capacity of the person concerned may limit the type of treatment which would be considered to be applicable. But a difficult question arises as to whether treatment which the respondent might regard as suitable for a person of the age and physical and mental capacity of the berson concerned and in respect of which a fa1lure to undergo would justify refusal or cance] lation of a pension, extends to the undergoing of a major operation such as a laminectomy. There is a sense in which the undergoing of such an operation might be considered to be suitable treatment for physical rehabilitation. Rehabilitation is defined in the Oxford Dictionary 1982 supplement as including:- "to restore a disabled person, a criminal, etcetera, to some degree of normal life by appropriate training." In Websters Dictionary (1935) it embraces, "To put on a prover basis or into previous good state, to regain, to restere to re-establish, specifically to rastore a person such as a disabled soldier toa status of independent earning power toa course of instruction under state supervision, especially along vocational lines." 17. In the Macquarie Dictionary the first meaning given is "to restore to a good condition, especially in a medical sense, of persons." It may be put that suitable treatment for rehabilitation referred to in 8.135M comprehends the kind of rehabilitation treatment ceferred to in s.135(2) of the Act and accordingly that surgery may not be included therein. According to s.135(2) the treatment rovide or and training for which the respondent may arrange for pensioners and claimants for pensions and others may anclude medical, dental, psychiatric and hospital treatment (whether as an in-patient or out-patient} physical training and exercise, physiotherapy, occupational therapy or pre-vocational training and other treatment under medical supervision. The designated items of permissible treatment set out in §$.135(2) may create the impression that major surgery is not contemplated. It may be said that having regard to accepted notions of what is comprehended by the term "rehabilitation" the omission ~ of any reference in s.135(2) to surgical treatment is significant. But the expression "medical treatment" is, in its natural meaning, wide enough to include surgical or operative treatment. Thus the Shorter Ovford Dictionary includes in its m@anings "medical or surgical application or service". There is no real reason to exclude surgery 18. which of course can be major or minor. Accordingly, s.135(2) in so far as it is of assistance supports the view that 'treatment" may include surgery. One feels "that the normal use of the éxpression "treatment for rehabilitation" connotes treatment of a conservative kind, rest, fresh air, exercises, a tonic. But I am unable to exclude from its natural meaning any treatment designed to restore a person, as far as it can be, to bis former health. In "any treatment" I include major surgery. Of course in the exercise of his discretion the resnondent will take into account that treatment of a major character might not in the circumstances be suitable. But I see no limit to the kind of tceatment which would qualify for consideration as such, other than that it 1s treatment which, on the balance of probabilities is likely to achieve or at least materially contribute to the restoration of the condition of the person concerned to a capacity to work in a contemplated vocation: cf. Re Pansgqopoulos and Director-General of Social Security (1980-82) 4 ALN 316. The third question is whether in respect of treatment which a pensioner or claimant for a pension ry simply cannot undergo because c genuine fear of the risks involved, os because cr genuine compelling religious reesons, facilities therefor, no matter how 19. good, appropriate and proximate to carry out the treatment, can be said to be "available to that person" within the meaning of s.135M@. The primary qualification for a pension is that the claimant for a pension be permanently incapacitated for work. I have accepted the view that a person incapacitated for work for want of remedial treatment, which ius refused on genuine grounds of fear or religion, for the purposes of s.23, is relevantly permanently incapacitated. The Act does not purport to compel persons to undergo treatment. It does, however, intend that persons genuinely permanently incapacitated for work shall qualify for a pension. The Act is named the Social Services Act. Its purpose is a social purpose. Tt ais to be interpreted accordingly. It takes people as they are, and asks, in respect of a claimant "is this person in fact permanently incapacitated for work?" In my opinion the answer is "yes", in the case of a person who 1s incapacitated for work by reason of some curable disability in respect of which he would seek the necessary medical treatment, but for a genuine inability to do so based, for instance, on personal fear or religious conviction. On this basis it would be surprising if by the operation of s.1356§ a person who notiithstanding a refusal to undergo remedial medical treatment is qualified under s.23 to receive a pension should lose 20. that qualification because the respondent may not be concerned with the inability of a person to undergo the treatment in question because of something like his fear or his religion. Yet that would be the conseauence if under 5.135M simple failure to undergo treatment for rehabilitation was a ground for refusing or cancelling a pension. There is good reason therefcre, to interpret the reference to treatment for which "facilities are available to that person for suitable treatment" as limited to facilities and treatment which that person can make use of in the circumstances in which he is Placed. Those circumstances would include constraints upon him of genuine fears for his safety, even if unfounded, or his genuine religious beliefs. If these beliefs or those fears exclude use of those facilities for particular treatment so far as he is concerned, the failure to undergo that treatment would not support the exercise of the respondent's discretion to refuse or cancel a pension. The next question which 'arises is whether the treatment in question is suitable treatment for rehabilitation for a vocation. In this respect an identifiable vocation or an aidentifisble range of vocations 1s no doubt in contemplation of the provisions, the rehabilitation being designed to facilitate the person concerned to sork therein. 21. In a case inwtwhich the respondent is of the opinion that treatment would rehabilitate the person concerned so that he might rejoin the work force in some particular vocation, the exercise of the discretion adversely to that person would depend on the respondent's view of the situation, taking into account all relevant considerations. The Tribunal too, exercising the powers of the respondent must form its view taking into account all such considerations. In the reasons for the decision under appeal the Tribunait dealt with the problem by applying to it the provisions of 5.135M. It acted on the basis thata refusal, which it treated as a failure to undergo operative treatment designed- to remedy the physical aifficulties of the applicant on grounds regarded by the Tribunal as baseless in the light of the applicant's knowledge of the cogent factors favouring his undergoing of the operation, called for the exercise of the discretion under s.135M against~- the applicant so that the Tribunal's decision was to cancel his pension. However, considerations to be taken into account in relation to the the exercise of the discretion under s.1354 were not taken into account. The decision proceeded merely an the finding of the Tribunal that in rts view, judged in the light of the medical advice 22. given to the applicant at the time and ali the circumstances known to him and affecting him, the applicant's refusal to undergo the operation was unreasonable. Having regard to the foregoing it required consideration not only of whether the applicant's refusal of treatment was unreasonable but whether the reasons for the refusal were genuine réasons. it required consideration of the availability to the applicant of facilities for suitable treatment for his rehabilitiation the suitability of the proposed operative treatment in the light of the applicant's age and mental and physical capacity, possible trauma to the applicant of undergoing the treatment, the degree of probability that the treatment would bring about the desired rehabilitation, and any other factors which having regard to the purpose of the Act would go to the proper exercise of the discretion according to law. The cancellation of the pension could not be justified merely on the ground that looking objectively at the reasons for the applicant's refusal to undergo treatment the Tribunal was of the view that that refusal was unreasonable. This in substance was the course which the Tribunal adopted in confirming the decision of the respondent to cancel the applicant's pension. 23. Accordingly, the Tribunal erred in law in a critical "ay. The appeal should be allowed and the matter remitted to the Tribunal for further consideration in accérdance with the' principles enunciated in these reasons for judgment. > I certify that this and the 22 preceding pages ave a trve copy of the Reasons for Judgment herein of bis Lonour Hr. Justice Snvnwvtin Associate Dated: 6/:/e, } a Aa MERE TE naan tt