Comcare v Marinceski [2007] FCA 2088

FEDERAL COURT OF AUSTRALIA

Comcare v Marinceski [2007] FCA 2088 COMCARE v JOHN MARINCESKI AND ADMINISTRATIVE APPEALS TRIBUNAL NSD 644 OF 2007

FLICK J

28 DECEMBER 2007

SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 644 OF 2007

BETWEEN: COMCARE

Applicant

AND: JOHN MARINCESKI

First Respondent

ADMINISTRATIVE APPEALS TRIBUNAL

Second Respondent

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY SENIOR MEMBER ALLEN

JUDGE: FLICK J

DATE OF ORDER: 28 DECEMBER 2007

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The appeal be allowed. 2. The decision of the Administrative Appeals Tribunal dated 16 March 2007 be set aside and the matter be remitted to the Tribunal for further determination in accordance with these reasons. 3. The Amended Application for an order of review be dismissed. 4. The cross-appeal be dismissed. 5. Leave to amend the Notice of Cross-Appeal be refused. 6. The First Respondent to pay the costs of the Applicant.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 644 OF 2007

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY SENIOR MEMBER ALLEN BETWEEN: COMCARE

Applicant

AND: JOHN MARINCESKI

First Respondent

ADMINISTRATIVE APPEALS TRIBUNAL

Second Respondent

JUDGE: FLICK J

DATE: 28 DECEMBER 2007

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 On 16 March 2007 the Administrative Appeals Tribunal published its reasons for decision in respect to a claim for compensation made by Mr John Marinceski. 2 The facts raised by the Notice of Appeal are not disputed. The principal issue in dispute is the application of s 52(3) of the Compensation (Commonwealth Government Employees) Act 1971 (Cth) and also s 52(4)(g) of that Act. 3 The facts may be stated simply. On 2 April 1979 Mr Marinceski was retired from his position as a gardener with the Department of the Capital Territory — Parks and Gardens, on the ground of invalidity. From 24 May 1979 Mr Marinceski has been receiving an invalid pension payable under s 24 of the Social Security Act 1947 (Cth). 4 Prior to May 1979, namely on 9 March 1979, Mr Marinceski made a claim for compensation payable pursuant to the 1971 Act.That Act has been repealed by s 139 of the Safety, Rehabilitation and Compensation Act 1988 (Cth). The 1988 Act came into force on 1 December 1988. Section 124(1), however, provides that it is the 1988 Act that applies in relation to an injury loss or damage suffered by an employee, whether before or after the commencement of the 1988 Act. Section 124(2) further provides that an employee who suffered an injury before the commencement of the 1988 Act is not entitled to compensation unless he or she was previously entitled to compensation under the 1971 Act. 5 On 19 February 1985 Mr Marinceski's claim for compensation was ultimately accepted by the Commissioner for Employees Compensation. 6 A sum of $ 4,477.09, being the amount of tax payable on the lump sum payment, was deducted from the compensation paid to Mr Marinceski. The manner in which this sum was calculated was explained in a letter from the Department of Territories to the Commissioner of Taxation dated 11 July 1986. That letter was in evidence before the Tribunal and formed part of the statement provided pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth). That letter detailed what was described as "the gross amount" payable to Mr Marinceski for the period 1979 through to 1986, and the tax payable for the years there identified. 7 In determining the amount of compensation on appeal, the Administrative Appeals Tribunal concluded that s 52(3) conferred an "unfettered discretion" and empowered it to give consideration to the tax payable by reason of compensation having been paid. In resolving the dispute, the Tribunal decided in part as follows: [26] I therefore set aside the decision under review and remit this matter to the Respondent with the direction that the calculation of underpayment to the Applicant is to be increased by the sum of $ 4,477.09, being the amount of tax extracted from his lump sum payment of compensation. 8 It is common ground between the Applicant and Mr Marinceski that the Tribunal erred in concluding that s 52(3) conferred an "unfettered discretion". The Applicant contends that the taxation consequences of payments made is not within the ambit of the power conferred by s 52(3) and that that section confines consideration to the quantification of compensation payable; Mr Marinceski contends that s 52(3) does permit consideration to be given to the taxation consequences of a payment being made to a recipient of compensation. 9 A further matter dividing the parties is that Mr Marinceski wishes to contend on appeal to this Court that s 52(3) does not extend to any deduction being authorised for payments payable under the Social Security Act 1947 (Cth)or, alternatively, the payments in fact made in the present case. Mr Marinceski also contends that s 52(4)(g) "required the decision-maker to exclude payments in respect of dependent children". 10 The Tribunal has filed a submitting appearance.