FEDERAL COURT OF AUSTRALIA Cooper v Comcare [2001] FCA 1085 WORKERS COMPENSATION – Commonwealth employees – weekly payments – incapacity and retirement preceding 1988 Act – entitlement derived from two separate injuries sustained prior to 1988 – discontinuance of entitlement in respect of one injury but continuance of weekly payments based on entitlement in respect of other injury – whether subject to age based reduction of payments upon turning 65 - whether worker a "former employee" to whom age based reductions applicable – whether worker in receipt of weekly payments in respect of injury at commencement of Safety, Rehabilitation and Compensation Act 1988 (Cth) - Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 123 and 134 ADMINISTRATIVE LAW – Administrative Appeals Tribunal applications for review – frivolous and vexatious – summary dismissal of application – whether any advantage in summary disposition – facts undisputed – question of law – substantive determination productive of greater finality – jurisdiction of Court to entertain appeal against summary disposition WORDS AND PHRASES - "former employee", "receiving weekly payments of compensation" Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 123, 132, 132A, 134 Administrative Appeals Tribunal Act 1975 (Cth) s 42B Re Williams and Australian Electoral Commission (1995) 21 AAR 467 cited Australian Postal Corporation v Matusko (unrep, Fed Court, Olney J 14 May 1996) cited Board of Examiners under the Mines Safety and Inspection Act 1994 (WA) v Lawrence (2000) 100 FCR 255 cited Comcare v Neil (1993) 41 FCR 517 distinguished JAMES COOPER v COMCARE W199 OF 2001 FRENCH J 9 AUGUST 2001 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W199 OF 2001 BETWEEN: JAMES COOPER APPLICANT AND: COMCARE RESPONDENT JUDGE: FRENCH J DATE OF ORDER: 9 AUGUST 2001 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The application is dismissed. 2. The applicant is to pay the respondent's costs of the application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W199 OF 2001 BETWEEN: JAMES COOPER APPLICANT AND: COMCARE RESPONDENT JUDGE: FRENCH J DATE: 9 AUGUST 2001 PLACE: PERTH REASONS FOR JUDGMENT Introduction 1 James Cooper has been paid workers compensation under the Compensation (Commonwealth Employees) Act 1971(Cth) and its successor, Safety, Rehabilitation and Compensation Act 1988 (Cth)since 1987. In that year, as a Commonwealth employee, he suffered injuries to his ankle and back in separate accidents. His weekly payment entitlement in respect of his ankle injury ceased in December 1991 but his entitlement to receive weekly payments continued because of his back injury. Under transitional provisions of the 1988 Act that entitlement is said to have been reduced from the date he turned 65 on 6 December 2000. The reduction was determined by Comcare pursuant to s 134 of the 1988 Act on the basis that he was a "former employee" who was in receipt of weekly payments at the commencement of the 1988 Act on 1 December 1988. The Administrative Appeals Tribunal dismissed as frivolous and vexatious his application to review that determination. He has appealed to this Court against the Tribunal decision. The question reduces to one of construction of the Act on undisputed facts. Factual Background 2 James Cooper was born on 6 December 1935. On 29 January 1987 he commenced employment with the Department of Veterans Affairs as a Temporary Orderly, Grade 1 at the Repatriation General Hospital, Hollywood in Western Australia. On 19 February 1987, in the course of his employment, he slipped on a step and suffered a sprained left ankle. On 22 May 1987, again, in the course of his employment, he accidentally knocked over a panel which fell on to him causing him to fall to the floor on his back as a result of which he suffered pain in his lower back. 3 Following the first accident on 19 February 1987, Mr Cooper completed a Report of Accident form. Initially he elected not to lodge a claim for compensation, but subsequently did so on or about 8 June 1987. A delegate of the Commissioner for Employees Compensation made a determination accepting liability to pay compensation to him in respect of his left ankle injury. 4 On 8 July 1987, Mr Cooper lodged a claim for compensation for the injury to his back. On 2 October 1987, a delegate of the Commissioner for Employees Compensation made a determination accepting liability to pay compensation in respect of the back injury. On 10 April 1997, he lodged with Comcare a claim for compensation for "permanent injury" in relation to his back injury. This was an application for lump sum compensation. An officer of Comcare made a determination refusing that claim on 4 June 1998. However on 9 June 1998 Comcare made a determination accepting liability to pay weekly compensation for incapacity for the period from 1 July 1998 to 30 June 1999. A reconsideration of the determination of 4 June 1998 was requested on 29 June 1998, but on 31 August of that year a Review Officer of Comcare affirmed the determination. He also revoked the determination of 9 June 1998, instead deciding that Comcare's liability to pay compensation to Mr Cooper in respect of his left ankle ceased on and from 20 May 1998 and its liability to pay compensation in respect of his back condition ceased on and from 17 September 1998. 5 An application for review of the decision of the Review Officer was lodged with the Administrative Appeals Tribunal on 24 September 1998. On 8 October 1999, the Tribunal set aside the decision under review and remitted the matter to Comcare for reconsideration in accordance with directions as follows: 1. Comcare was liable under the Safety, Rehabilitation and Compensation Act 1988 ("the 1988 Act") to pay compensation to the applicant in respect of his left ankle injury until 22 December 1991, but such liability ceased on and from that date. 2. Comcare continues to be liable under the 1988 Act to pay compensation to Mr Cooper in respect of his lower back injury. 3. Comcare is not liable to pay lump sum compensation under ss 24 and 27 of the 1988 Act to Mr Cooper in respect of his lower back injury. 6 On 21 August 2000, Comcare wrote to Mr Cooper warning him that when he reached 65 years of age the formula for the calculation of his fortnightly incapacity entitlements would change. On his birthday his gross fortnightly incapacity payments would be reduced by 5% for each year (or part thereof) that the Act had been in force. As the Act commenced on 1 December 1988 the current reduction would be 60%. This was a once only reduction and future payments would be maintained at the new rate. He was sent the advice in advance so he could have the opportunity to make preparations for the change. By a follow up letter on 28 November 2000 he was formally advised, in respect of his claim for back injury sustained on 22 May 1987, that Comcare's liability to pay him compensation for incapacity would be reduced from his sixty fifth birthday. The decision was based on s 134 of the Act which provides that when a former employee reaches age 65 the weekly payment will be reduced and fixed as calculated under a formula set out in that section. His weekly entitlement prior to the reduction was $366.94. The entitlement after the reduction was $128.42. 7 Mr Cooper wrote to Comcare on 10 December 2000 requesting a reconsideration of the determination. On 29 January 2001, he was informed by Comcare that upon reconsideration of the determination of 28 November 2000 the decision was to affirm it. Another decision relating to a claim for permanent impairment in connection with an accident resulting in damage to Mr Cooper's teeth was also affirmed on the same date. An application for review of the decisions set out in the letter of 29 January 2001 was lodged with the Administrative Appeals Tribunal on 6 February 2001. The application was uninformative. It stated "I disagree with the decision". On 9 April 2001, Comcare lodged an application with the Tribunal seeking a direction under s 42B of the Administrative Appeals Tribunal Act 1975 (Cth) that Mr Cooper's Application for Review of Decision dated 29 January 2001 be dismissed. An order was also sought that he must not, without the leave of the Tribunal, make a subsequent application to the Tribunal in respect of any issues forming part of or incidental to his then current application. 8 After hearing argument on 9 May 2001, the Deputy President dismissed the application for review as frivolous pursuant to s 42B(1)(a). Two dismissal decisions were made albeit they emanated from one application, but related to the two different determinations which it was sought, by that application, to review. The Deputy President also made directions, relevant to each of the determinations, that Mr Cooper must not without leave of the Tribunal make a subsequent application to the Tribunal in respect of any issues forming part of, or incidental to, the application for review. 9 Mr Cooper lodged notices of appeal against each of the decisions of the Tribunal. The appeal relating to the permanent impairment arising out of the injury to his teeth was heard on the same day as that concerned with the reduction of his entitlement. It was resolved by mediation after the hearing. What remains for decision is the appeal relating to his weekly payment entitlement in respect of his back injury. Grounds of Appeal 10 The grounds of the appeal in relation to the Tribunal's decision dismissing the application for review of the determination reducing Mr Cooper's benefit are as follows: "4.1 It is submitted that the Tribunal committed the following errors of law: (a) It misconceived the evidence before it. (b) It failed itself to make the relevant findings of fact by simply adopting Respondent's unreasoned opinion. (c) The Tribunal failed to give adequate reasons for its decision. 4.2 Any one of those errors of law have (sic) the result that the Applicant has been deprived of an opportunity to have his review conducted on its merits. 4.3 The orders are sought to enable the applicant to have a hearing of the review on its merits." Statutory Framework 11 The Safety, Rehabilitation and Compensation Act 1988 is described in its long title as "An Act relating to the rehabilitation of employees of the Commonwealth and certain corporations and to workers' compensation for those employees and certain other persons, and for related purposes". It repealed the Compensation (Commonwealth Employees) Act 1971 under which Mr Cooper's entitlement to compensation in respect of his ankle and back injuries initially arose. The 1988 Act establishes a liability for compensation for Commonwealth employees. The term "employee" is defined in s 5 of the Act and includes "…a person who is employed by the Commonwealth or by a Commonwealth authority". Section 68 of the Act establishes a body called Comcare. Its functions include the making of determinations "accurately and quickly in relation to claims and requests made to Comcare under this Act" (s 69(a)). Part II of the Act sets up a scheme of compensation which covers injuries, property loss or damage and medical expenses. Section 14 of the Act provides, inter alia: "14(1) Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment." 12 Part X of the Act is entitled "Transitional Provisions, Consequential Amendments and Repeals". Division 2 of that Part applies the 1988 Act to pre-existing injuries and in s 124 provides, inter alia: "124(1) Subject to this Part, this Act applies in relation to an injury, loss or damage suffered by an employee, whether before or after the commencing day. (1A) Subject to this Part, a person is entitled to compensation under this Act in respect of an injury loss or damage suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury, loss or damage under the 1912 Act, the 1930 Act or the 1971 Act." Payments of compensation made under the 1971 Act are deemed to have been made by the relevant authority in respect of the corresponding liability of that relevant authority to make such a payment under the 1988 Act for that injury (s 125(1)). Any liability of the Commonwealth or a Commonwealth authority to pay compensation under the 1971 Act shall, to the extent that it was not discharged before the commencing day of the 1988 Act, be taken to have been incurred by that authority on the commencing day under the corresponding provision of the 1988 Act. 13 Division 3 contains special transitional provisions relating to former employees. Three classes of former employees are mentioned in ss 131, 132 and 132A. Section 132 applies to former employees under 65 who are not in receipt of superannuation benefits and are unable to engage in any work. The section specifies the amount of compensation payable per week to the former employee as a percentage of his or her normal weekly earnings as at the commencing day. It is not in dispute that s 132 applies to Mr Cooper. 14 Section 134 provides for the reduction of compensation upon a former employee reaching the age of 65. It is in the following terms: "134(1) When a former employee to whom section 131, 132 or 132A applies reaches 65, the amount of compensation payable per week to the former employee but for this section shall be reduced by an amount calculated under the formula: 5 x (65 – A) x C 100 where: A is the age of the former employee, expressed in completed years, as at the commencing day; and C is that amount of compensation payable per week to the former employee. (2) Neither section 8 nor section 13 applies to the amount of compensation payable to an employee from time to time in accordance with subsection (1)." 15 The term "former employee" is defined in s 123 of the Act as follows: ""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 in respect of Part X was 1 December 1988 – Gazette 1988 No S196. 16 Reference should also be made to s 42B of the Administrative Appeals Tribunal Act 1975 (Cth) which provides: "42B(1) Where an application is made to the Tribunal for the review of a decision, the Tribunal may, at any stage of the proceeding, if it is satisfied that the application is frivolous or vexatious: (a) dismiss the application; and (b) if the Tribunal considers it appropriate, on the application of a party to the proceedings, direct that the person who made the application must not, without leave of the Tribunal, make a subsequent application to the Tribunal of a kind or kinds specified in the direction. (2) A direction given by the Tribunal under paragraph (1)(b) has effect despite any other provision of this Act or a provision of any other Act. (3) The Tribunal may discharge or vary such a direction." The Evidence Before the Tribunal 17 It was not in dispute before the Tribunal that Mr Cooper turned 65 on 6 December 2000. It was also established that he was in receipt of compensation under the 1971 Act as at 1 December 1988 which was the commencing day of Part X of the 1988 Act and that he had ceased to be an employee before that day. A record of payments was produced to the Tribunal. That record showed payments were made covering, inter alia, the periods 1 July 1988 to 30 November 1988 and 1 December 1988 to 30 June 1989. The Tribunal's Reasons for Decision 18 The Tribunal gave its reasons orally on the hearing of the application to dismiss the application for review. As those reasons were briefly stated it is convenient to reproduce them from the transcript of the proceedings before the Tribunal. They were as follows: "In matter number 44, Mr Cooper's prospects of success in relation to this application depend on whether or not section 134 of the Safety Rehabilitation and Compensation Act is the applicable section in this matter. That in turn depends on whether either section or on two matters at least, that is to say, whether Mr Cooper is a former employee within the meaning of section 123 of the Act and also whether section 131, 132 or 132A applies to Mr Cooper. I find that Mr Cooper is a former employee within the meaning of section 123 of the Act in that immediately before the commencing day, being 1 December 1988, Mr Cooper was receiving weekly payments of compensation under the 1971 Act in respect of an injury, namely in relation to his left ankle, resulting in an incapacity and that he had ceased to be an employee within the meaning of the Act before that day, his employment having been terminated prior to 1 December 1988. Accordingly I find that the amount of compensation payable to Mr Cooper under the Act is to be calculated pursuant to the formula which is laid down in subsection (1) of section 134." The Tribunal then clarified with Mr Cooper that he was not disputing that, assuming the formula to be applicable, it was correctly applied. He did not dispute that. The Tribunal continued: "So my finding in relation to that matter is that on the facts presented to me which are not in dispute in relation to this matter, that that section 134, subsection (1) is clearly applicable to Mr Cooper and accordingly the compensation payable to him is to be calculated or reduced, rather, by an amount calculated under that particular formula. So Mr Cooper's application for review of the respondent's decision, reached pursuant to section 134, subsection (1) by the adoption of the formula mentioned in that subsection, again is plainly unsustainable and has no prospects of success, and for that reason I find that Mr Cooper's application for review of that reviewable decision is also frivolous. Similarly, I am prepared to make a direction in the form sought by the respondent in the letter dated 9 April 2001, or at least the application dated 9 April 2001 and that is a direction in terms that the applicant must not, without leave of the Tribunal, make a subsequent application to the Tribunal in respect of any issues forming part of or incidental to the present application. So they are my findings and rulings in relation to the matters that have been brought before me today." Mr Cooper's Contentions 19 Mr Cooper argued that the weekly payments he received immediately prior to 1 December 1988 related to his ankle injury. He said that he continued to receive payments for his ankle up to February 1992. Whether they ceased then or in December 1991 in accordance with the Tribunal's determination of October 1999, is immaterial for present purposes. He agreed that, in relation to payments made for the ankle injury, he fell within the definition of "former employee" under s 123. His argument was, however, that his ankle payments ceased on 22 December 1991 and the payments thereafter related to his back. The compensation he was receiving at the commencing date of Part X of the Act was for the ankle injury and not for his back. He accepted that the Comcare argument against him was that, if he were in receipt of weekly payments under the 1971 Act as at the commencing day, it did not matter whether it was in relation to his ankle or his back or whether the ankle payment had since been discontinued and taken over by payments relating to his back. Dismissal of Proceedings as Frivolous or Vexatious 20 The operation of s 42B was considered by the Tribunal comprising three Presidential Members who were also judges of this Court in Re Williams and Australian Electoral Commission (1995) 21 AAR 467. This unusual composition is mandated in the case of applications to the Tribunal to review certain decisions of the Australian Electoral Commission – Commonwealth Electoral Act 1918 (Cth) s 141(6). While the Tribunal so constituted was sitting as an administrative body and not as a Full Court of this Court, the considered views of their Honours, in that capacity, are to be regarded as highly authoritative even though not a binding precedent in this Court. 21 Their Honours applied the same general criteria for the dismissal of proceedings as frivolous or vexatious by the Tribunal as inform summary dispositions in the Court: "The power for peremptory dismissal of proceedings is to be exercised cautiously and sparingly…The mere fact that a proceeding is shown to have no foundation in fact is insufficient to justify a finding that it was commenced vexatiously or without reasonable cause. …" (473-474) Their Honours also said: "…an applicant who genuinely holds a mistaken belief as to a state of facts which, if correct, would support the claim which is made in the proceedings, is ordinarily entitled to "a day in court". In that event, it could operate very unfairly to an applicant to pre-judge the issues without affording him/her an opportunity to support his/her case with appropriate evidence. But where … the significant factual matters are agreed between the parties, and the only issues in dispute relate to the legal consequences which follow, the genuineness of the applicant's belief as to the legitimacy of his claim must bow before a finding that, as a matter of law, no legitimate purpose can be achieved by continuing with the proceeding." (475) The latter is the category into which the present case falls. It is, however, to be noted that where the facts are not in dispute and the case is resolvable by reference to the law alone, a substantive hearing may proceed which involves little more in terms of time and expense than determination of an application for summary disposition. In the present case it is questionable whether there was any great advantage in dealing with the matter under s 42B. The disadvantage is that the decision may lack finality. In the event that such an application is unsuccessful, there is a real question whether the Court has jurisdiction, under s 44 of the Administrative Appeals Tribunal Act, to entertain an appeal in relation to it – Australian Postal Corporation v Matusko (unrep, Fed Court, Olney J 14 May 1996). See also Board of Examiners under the Mines Safety and Inspection Act 1994 (WA) v Lawrence (2000) 100 FCR 255 at 280 (French J); cf at 299 (Carr J). On the other hand a final decision based upon a finding that proceedings are frivolous or vexatious will be reviewable. However, the Court in such a case must judge the correctness of the Tribunal's approach and decision against the principles governing summary disposition rather than simply deal with the matter on its merits. In this case, however, no difficulty or inconvenience arises by reason of the course taken by the Tribunal as appears below. The Merits of the Application 22 Mr Cooper's contentions are unsustainable. He was in receipt of weekly payments of compensation under the 1971 Act immediately prior to the commencing day. His entitlement to compensation derived from both his ankle and his back injuries. It is of no account that upon payment for the ankle injury ceasing in December 1991 his entitlement thereafter derived from the lower back injury. 23 Mr Cooper referred to the decision of Neaves J in Comcare v Neil (1993) 41 FCR 517. In that case it had been determined in February 1989 that an employee was entitled to weekly payments under the Act for a back condition which was first treated in 1978. He had retired from the employment of the Commonwealth in 1986. The question was whether he was a "former employee" within the meaning of s 123 so that his payments were liable to reduction pursuant to s 134. Neaves J held that the words "was receiving weekly payments" in s 123 did not extend to a person who had not actually received amounts of weekly compensation prior to the commencing day notwithstanding that such a person was later found to be entitled to receive those payments. 24 After a comprehensive discussion of the relevant provisions his Honour said, at 528: "In my opinion, no sufficient reason has been advanced to justify reading the definition of "former employee" in s 123 otherwise that 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. Further, even if it were correct to conclude that the Parliament intended to legislate for persons in the situation of the respondent, it does not necessarily follow that the Parliament would have applied to such persons the provisions of s 131 of the Act." 25 Mr Cooper, it would seem, regarded the entitlement to payment in respect of his back injury as an entitlement like that in Comcare v Neil, not manifested in actual weekly payments. But his entitlement derived from both injuries and the payments made to him up to 1 December 1988 satisfied that entitlement completely. For he was, at that date, the beneficiary of Comcare determinations in his favour in respect of both injuries. There is no suggestion that he was entitled to receive more than he actually did. The payments he was receiving could properly be described as payments in respect of the ankle injury and in respect of the back injury for the purposes of the definition of "former employee" in s 123. 26 The decision in Comcare v Neil is of no assistance to Mr Cooper. He was a person in receipt of weekly payments of compensation under the 1971 Act immediately before the commencing day and had ceased to be an employee within the meaning of that Act before that day. On the undisputed facts his application could not, as a matter of law, succeed. It was properly dismissed under s 42B(1)(a) of the Administrative Appeals Tribunal Act. In the result his application will be dismissed with costs. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. Associate: Dated: 9 August 2001 Mr J Cooper appeared in person Counsel for the Respondent: Mr S Pilkinton Solicitor for the Respondent: Dibbs Barker Gosling Date of Hearing: 24 July 2001 Date of Judgment: 9 August 2001