FEDERAL COURT OF AUSTRALIA

Telstra Corporation Ltd v Hannaford [2006] FCAFC 87

WORKERS COMPENSATION – Safety, Rehabilitation and Compensation Act 1988 (Cth) – reviewable decisions of Telstra as employer – original ailment prognosis of Telstra subsequently reversed by Telstra – whether original prognosis underpinning initial Telstra decision enshrined or liable to be subjected to reconsideration in light of later medical evidence – where legislation allows for progressive and evolving decision-making

Administrative Appeals Tribunal Act 1975 (Cth)

Safety, Rehabilitation and Compensation Act 1988 (Cth)

Hannaford v Telstra Corporation Limited [2005] FCA 1298 reversed

Power v Comcare (1998) 89 FCR 514 applied

Comcare v Hill (1999) 56 ALD 487 applied

Lees v Comcare (1999) 56 ALD 84 considered

Australian Postal Commission v Oudyn (2003) 73 ALD 659 referred to

Rosillo v Telstra Corporation Limited (2003) 77 ALD 396 referred to

Re Liu and Comcare [2004] AATA 617 cited

Federal Commission of Taxation v Swift and Others (1989) 18 ALD 679 referred to

Drake J v Minister for Immigration and Ethnic Affairs 1979) 24 ALR 577 cited

Fletcher v Federal Commissioner of Taxation (1988)84 ALR 295 cited

Duong v Australian Postal Corporation [2005] FCA 991 referred to

Riddle v Telstra Corporation Limited [2006] FCA 58 discussed and applied

TELSTRA CORPORATION LIMITED v RONALD HANNAFORD

NSD 1891 OF 2005

HEEREY, DOWSETT & CONTI JJ

2 JUNE 2006

SYDNEY

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.         The appeal from the judgment and orders given and made by Moore J on 16 September 2005 be allowed and the judgment and orders be set aside.

2.         In lieu thereof be entered judgment in favour of the appellant Telstra Corporation Limited.

3.         The respondent Ronald Hannaford pay the costs of the appeal.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

HEEREY J:

1                     I have had the advantage of reading in draft form the judgement of Conti J.  His Honour sets out comprehensively the relevant provisions of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act), the chronology of the administrative decisions with which this case is concerned, the reasoning of the primary judge on the appeal from the Administrative Appeals Tribunal (AAT), the arguments on the appeal and the authorities to which the parties have referred.

2                     The respondent Mr Ronald Hannaford made a claim against his employer Telstra under s 14 of the SRC Act for compensation in respect of the disease Ross River fever.  On 8 May 2002 Telstra accepted the claim and paid medical expenses (s 16) and weekly payments for incapacity (s 19).

3                     Subsequently Telstra determined that on and from 31 October 2003 it was no longer liable to pay compensation for medical expenses or incapacity.  That decision was reconsidered by Telstra and affirmed under s 62.

4                     In the meantime Mr Hannaford made a claim for compensation for permanent impairment (s 24) and non-economic loss (s 27).  Telstra refused that claim and the refusal was also affirmed on a s 62 reconsideration.

5                     Mr Hannaford sought review by the AAT of both reconsideration decisions.  The AAT affirmed both decisions.  It did so on the basis of undisputed medical evidence that the positive IgM antibody, essential for a diagnosis of Ross River fever, was not present in Mr Hannaford’s serology.  It said:

“Whatever ailed the applicant in February/March 2002 [the time when he had claimed the infection] I am satisfied that on the basis of the blood tests performed it was not Ross River fever.”

6                     Mr Hannaford appealed to this Court on the ground that:

“The tribunal erred in law in determining that it had jurisdiction to consider liability pursuant to s 14 of the Act when it reviewed the decisions before it.”

7                     Moore J upheld the appeal: Hannaford v Telstra Corporation Limited [2005] FCA 1298.  His Honour held at [46] that it was not open to the AAT to review findings on the question whether Mr Hannaford had suffered Ross River fever and “thereby make findings contrary to those underpinning the earlier determination under s 14”.

8                     The text, structure and underlying policy of the SRC Act do not suggest that a determination under s 14 permanently enshrines every finding of fact on which the determination was based.  Mr Hannaford’s case concedes that a reconsideration under s 62 (and AAT review of the making or declining of such reconsideration) of a s 14 determination would be available.  This would necessarily include the reconsideration of any finding of fact.  Section 62 reconsideration is not subject to any time limit.  The argument then must be reduced to saying that Telstra (or the AAT on review) cannot do under, for example, a reconsideration of a s 16 determination exactly the same thing as it could under a s 14 determination.  Such a degree of formalism, reminiscent of the old common law forms of action, does not fit well with a modern, practical statutory scheme for the compensation of injured workers.

9                     One of the decisions the AAT, standing in the shoes of Telstra, was required to make was whether, within the meaning of s 24(1), Mr Hannaford had an injury which resulted in a permanent impairment.  The effect of s 4 was that “injury” included a disease that was contributed to in a material degree by his employment.  The disease in question was Ross River fever.  It was squarely within the AAT’s jurisdiction to make a finding as to whether or not Mr Hannaford had that disease at the time of the hearing.  It is difficult to see how the AAT, in making a finding that he did not suffer from the disease, must be excluded from relying on the (uncontradicted) expert evidence before the Tribunal that he had never had it. 

10                  As Conti J points out at [57], the SRC Act allows for progressive and evolving decision-making allowing for the changes in circumstances which are inevitably likely to happen.  This is in the interests as much of employees as employers. 

11                  A determination under s 14 is subject to the SRC Act, and in particular to Part II thereof, which provides for such benefits as medical expenses (s 16) and weekly payments (s 19).  If an employee obtained a s 14 determination for, say, disease X but later claimed increased medical expenses for disease Y, it would be a strange construction of beneficial legislation to conclude that the employee was “estopped” by the original determination from alleging that he really suffered from Y all along.

12                  For the reasons given by Conti J, I agree that the appeal should be allowed and that the orders his Honour proposes should be made.

Associate:

Dated:              2 June 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

DOWSETT J:

13                  I have read the reasons prepared by Heerey and Conti JJ.  I agree with the orders prepared by their Honours and with their reasons.

Associate:

Dated:              2 June 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

CONTI J

Context to the application for review by way of appeal to a single judge of this Court from the Administrative Appeals Tribunal and to the subsequent further appeal to this Full Court

14                  This appeal from the judgment of a single judge of this Court concerns the operation of Part II of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (‘the SRC Act’), which relates to determinations as to compensation for injured employees of the Commonwealth and certain Commonwealth corporations, and also of Part VI of the SRC Act which relates to the reconsideration and review of those determinations.  The particular issue arising concerns an illness and incapacity for work sustained by the respondent (‘Mr Hannaford’) in the course of his former employment by the appellant Telstra Corporation Limited (‘Telstra’) in mid-February 2002, for which he sought medical treatment on 18 March 2002 after ceasing work on that day.  From about January 2002, Mr Hannaford had been engaged in the laying of cables in a tidal swamp in the Yamba district of New South Wales, where mosquitoes were present. The diagnosis proffered to Mr Hannaford at the time of initial medical consultation was that of Ross River fever.  It is an appeal which raises matters of some complexity concerning the provisions of the SRC Act in relation to the scope of statutory reconsideration of the prior review of a determination as to liability to pay compensation under that legislation. 

15                  On 3 May 2002, Mr Hannaford made his original claim for compensation under the SRC Act in relation to that illness and incapacity.  Telstra was indemnified by GIO Insurance in relation to claims of that kind.  It was common ground that the original claim was made on the footing of ss 16 and 19 of the SRC Act which relate respectively to medical treatment and incapacity for work.  As a consequence, a determination was made on 8 May 2002 by Telstra as original statutory decision-maker in favour of Mr Hannaford in relation to medical expenses incurred up to and including 3 July 2002 (s 16), and for employment compensation for the period of time up to 2 May 2002 during which Mr Hannaford was incapacitated for work (s 19).  That determination was based upon asserted illness and incapacity occasioned by ‘specified conditions and parasitic diseases (Ross River fever) sustained on 18 March 2002’. Ongoing determinations to similar effect were made for periods of time covering the remainder of 2002 and the first half of 2003.  It was common ground that liability was accepted by Telstra for such compensation within and pursuant to s 14 of the SRC Act, and compensation payments were made by way of such weekly allowances and medical expenses on the basis of Telstra’s consequential liability for compensation referrable to Mr Hannaford’s affliction of Ross River fever. 

16                  Determinations in relation to compensation for personal injury are authorised by Part II of the SRC Act concerning the following compensable subjects:

(i)                  injury resulting in death, incapacity for work or impairment (s 14);

(ii)                medical expenses (s 16);

(iii)               injuries resulting in incapacity for work (s 19);

(iv)              injuries resulting in permanent impairment (s 24); and

(v)                non-economic loss (s 27).

Sections 14 and 16 appear in Division 1 of Part II, that Division being headed ‘Injuries, property loss or damage, medical expenses’.  Section 19 appears in Division 3 of Part II headed ‘Compensation for injuries resulting in incapacity’.  Sections 24 and 27 appear in Division 4 of Part II headed ‘Injuries resulting in impairment’. 

17                  Those sections 14, 16, 19, 24 and 27 of the SRC Act read respectively as follows, so far as is presently material (references to Comcare in the Act may be taken as references to Telstra), Telstra being a Commonwealth authority within s 4 of the SRC Act at all material times:

‘14       Compensation for injuries

(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.

…

16        Compensation in respect of medical expenses etc.

(1)       Where an employee suffers an injury, Comcare is liable to pay, in respect of the cost of medical treatment obtained in relation to the injury (being treatment that it was reasonable for the employee to obtain in the circumstances), compensation of such amount as Comcare determines is appropriate to that medical treatment.

…

19        Compensation for injuries resulting in incapacity

(1)       This section applies to an employee who is incapacitated for work as a result of an injury, other than an employee to whom section 20, 21, 21A or 22 applies.

…

24        Compensation for injuries resulting in permanent impairment

(1)       Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.

…

27        Compensation for non-economic loss

(1)       Where an injury to an employee results in a permanent impairment and compensation is payable in respect of the injury under section 24, Comcare is liable to pay additional compensation in accordance with this section to the employee in respect of that injury for any non-economic loss suffered by the employee as a result of that injury or impairment.

… .’

18                  Section 62 of the SRC Act is headed ‘Reconsideration of determinations’, and appears within Part VI headed ‘Reconsideration and review of determinations’; it provides as follows, so far as is material:

‘(1)      A determining authority may, on its own motion:

            (a)        reconsider a determination made by it; or

            (b)        cause such a determination to be reconsidered by a person to whom its power under this section is delegated, being a person other than the person who made, or was involved in the making of the determination;

            whether or not a proceeding has been instituted or completed under this Part in respect of a reviewable decision made in relation to that determination.

(2)       A request to a determining authority to reconsider a determination made by it may be made by:

            (a)        the claimant; or

            (b)        if the determination affects the Commonwealth – the Commonwealth; or

            (c)        if the determination affects a Commonwealth authority – that Commonwealth authority.

…

(5)       Where a person reconsiders a determination, the person may make a decision affirming or revoking the determination or varying the determination in such manner as the person thinks fit.’

Telstra is a ‘determining authority’ within s 62 of the SRC Act.  A ‘determination’ is defined by s 60(1) of the SRC Act to include ‘a determination, decision or requirement made under section(s)… 14,… 16,… 19,… 24,… 27…’.  That definition is stipulated to operate ‘[i]n this Part’, that is of course Part II, as the opening words to the preceding s 60(1) interpretation provisions make clear. 

19                  As has been observed in reported cases relating to compensation claims made by injured or diseased Commonwealth employees sustained in or arising out of or in the course of employment, the reasons for decision below being no exception, the SRC Act provides for a ‘three-tiered’ procedure for the resolution of disputes involving: firstly, the determinationof claims for compensation by the determining authority by reference to the various sections of the Act therein identified (including ss 14, 16, 19, 24 and 27); secondly, the reconsideration or review of determinations by the determining authority, if sought pursuant to s 62 (so-called reviewable decisions); and thirdly, the further review of reviewable decisions by the Administrative Appeals Tribunal (‘AAT’), if sought pursuant to s 64 of the SRC Act. 

20                  Subsection 43(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (‘AAT Act’) provides in that latter regard as follows:

‘(1)      For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing:

            (a)        affirming the decision under review;

            (b)        varying the decision under review; or

            (c)        setting aside the decision under review and:

                       (i)         making a decision in substitution for the decision so set aside; or

                       (ii)        remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal.

            … .’

21                  The findings the subject of the initial Telstra determination of 8 May 2002 (ante) were communicated to Mr Hannaford as follows (as recorded at [6] of Moore J’s decision at first instance):

‘Having regard to the evidence presented and the provisions of the [Act], I have decided to allow your claim in accordance with s 14 of this Act.  In reaching my decision I considered evidence including your claim application, employer statements and associated medical evidence.  My findings are:

Medical Relationship

There is sufficient evidence available to establish that your specified infectious and parasitic diseases (Ross River fever) occurred as claimed.  The evidence available satisfies that the cause of your specified infectious & parasitic diseases (Ross River fever) is reasonable.

Employment Relationship

There is sufficient evidence to establish that your specified infectious & parasitic diseases (Ross River fever) is work related.

Whether there is an employment contribution under Section 7 – specified infectious & parasitic diseases (Ross River fever)

You satisfy the requirements of section 7 relating to whether there is an employment contribution to your medical condition:

-           The contribution to your specified infectious & parasitic diseases (Ross River fever) is employment related.

-           The employment contribution influenced the contraction or aggravation of your specified infectious & parasitic diseases (Ross River fever).  It should be noted that while it is accepted that your employment contributed to you contracting this condition, NDC is not “at fault” as such, as a result of you being bitten by a mosquito.

In light of the employment contribution, I therefore determine that Network Design & Construction is liable to pay compensation under the Safety, Rehabilitation and Compensation Act 1988. …’

Medical treatment claims resulting from this injury will be accepted up to and including 3 July 2002.  Time off work claims resulting from this injury will be accepted up to and including 2 May 2002.  If you wish to claim compensation for medical treatment or time off work, beyond these dates, it will be necessary for you to provide further supporting medical evidence from your treating doctor or specialist as outlined in the attached ‘Additional Advice to Claimants’ and ‘Medical Review Certificate’.

22                  On or about 29 July 2003, Mr Hannaford made claim upon Telstra for permanent impairment and non-economic loss pursuant to ss 24 and 27 of the SRC Act, and it was that claim which provided the immediate context to the present controversy.  On 31 October 2003, the decision was made by Telstra that Telstra ‘is no longer liable to pay [Mr Hannaford] compensation in respect of “specified infectious and parasitic diseases (ross river fever)”’, because ‘[b]ased upon the evidence on file I am satisfied that liability in respect of [Mr Hannaford] can now cease’.  It was apparently common ground, and the primary judge so recorded, that Telstra’s decision involved determinations made in respect of relief sought on the footing of ss 16 and 19 of the SRC Act, relating as Mr Hannaford’s claim did for medical expenses and for monetary compensation concerning permanent impairment. 

23                  On 7 November 2003, Mr Hannaford requested the reconsideration by Telstra of that subsequent Telstra determination of 31 October 2003 pursuant to s 62 of the SRC Act.  On 10 December 2003, that Telstra redetermination was reconsidered and affirmed by Telstra (that is by GIO Insurance on its behalf), on the following basis:

‘Like the primary delegate I consider there is currently no evidence to show that the claimant continues to suffer the effects of Ross River fever to such an extent that he is incapacitated for employment or in need of medical treatment.

I have noted the opinions of Dr Potter and Dr Mathers, however I do not consider the information provided by Dr Mathers is supportive of the assertion the claimant continues to suffer the effects of Ross River fever.  I consider Dr Potter has provided a very well reasoned and detailed opinion as to the probable nature of any symptoms currently reported by the claimant, and I accept his view that these symptoms do not arise out of any physically based injury for which compensation would be payable.

It is noted that the claimant’s solicitors have not sought any medical evidence in support of the reconsideration request, electing to rely on the medical opinion already available.  On the basis of this medical evidence I find that I am in agreement with the primary delegate the claimant has recovered by effects (sic) of any work related injury, namely “specified infectious and parasitic diseases (Ross River fever)”, and that liability to pay compensation under [the Act] has ceased.’

24                  On 22 December 2003, Mr Hannaford applied for review by the AAT of that Telstra redetermination of 10 December 2003, which was ultimately confirmed by the AAT on 26 November 2004, subject to variation as follows:

‘In accordance with Senior Member Allen’s direction I have now completed my review of that decision.  I have decided that the reasons for the reviewable decision dated 10 December 2003 are correct.  However, in light of the Federal Court’s decision in Australian Postal Corporation v Oudyn and Rosillo v Telstra Corporation Limited, I have decided to vary the decision dated 10 December 2003 and the Determination dated 31 October 2003 to find:

1.                  As at 31 October 2003, the Claimant’s “specified infectious and parasitic diseases (Ross River fever)” has resolvedand has ceased to result in incapacity for work and/or the requirement for medical treatment or impairment.

2.                  As at 31 October 2003, the Claimant is not entitled to compensation for medical treatment, or incapacity for work pursuant to section 16 and Part II Division 3 of the SRC Act in respect of “specified infections and parasitic diseases (ross river fever)”.’

I will later refer to both of those decisions.  That ultimate confirmation by the AAT occurred following upon the AAT having first directed on 14 July 2004 that Telstra’s redetermination or affirmation decision of 10 December 2003 be reconsidered by Telstra pursuant to s 42D of the AAT Act.  In that regard, s 42D(1) of the AAT Act provides as follows:

‘(1)      At any stage of a proceeding for review of a decision, the Tribunal may remit the decision to the person who made it for reconsideration of the decision by the person.’

25                  The above AAT confirmation made on 26 November 2004 was based on its findings that ‘[t]he evidence is quite clear that to support or confirm a diagnosis of Ross River Fever, the Applicant’s serology must show that both positive lgG and positive lgM antibodies exist.  Both rheumatologists agree that there was no positive lgM antibody’, and ‘…both … expressed the opinion that whereas the Applicant’s serology results showed that he had had a past exposure to Ross River Virus they did not confirm a diagnosis of current Ross River Virus infection.’  The AAT’s conclusion therefore was that ‘[w]hatever ailed the Applicant in February/March 2002 I am satisfied that on the basis of the blood tests performed it was not Ross River Fever.  The decisions under review are therefore affirmed.’ (pars 34 and 38 of the AAT’s reasons). 

26                  Further determinations were made by Telstra on 17 February 2004 that Mr Hannaford was not entitled to compensation claimed for permanent impairment pursuant to ss 24 and 27 of the SRC Act, the same being framed in the following terms:

‘The Claimant is not entitled to compensation pursuant to sections 24 and 27 of the SRC in respect of “specified infections and parasitic diseases (Ross River Fever)” sustained on 18 March 2002.’

On 20 February 2004, Mr Hannaford requested reconsideration of those further Telstra determinations of 17 February 2004, and those further determinations were affirmed by Telstra on 9 March 2004.  I should say at once that the complex history of applications for reviews and appeals, and of the decisions made pursuant thereto involving Mr Hannaford are later reproduced and briefly summarised in chronological sequence. 

27                  I should further record for completeness that in the course of the reasons for decision of the AAT made on 26 November 2004, an explanation of the intervening events, following upon Mr Hannaford’s initial approach to the AAT on 22 December 2003, was expressed in the following terms:

‘7.        Prior determinations by [Telstra] had accepted liability pursuant to s 14 of the SRC Act for Ross River Fever and compensation had been paid. [Telstra] did not seek to have those determinations set aside and recover any monies paid to [Mr Hannaford] as a result of the said determinations.  It did, however, seek to maintain its determinations of 26 July 2004 refuting liability and of 9 March 2004 rejecting the claim for permanent impairment on the ground that [Mr Hannaford] had not suffered from Ross River Fever’.

Hence Telstra acknowledged on 26 November 2004 in effect the historical existence of its pre-26 July 2004 determinations, but reaffirmed its view as to the absence of viability, on and from that time, of the basis for those pre-26 July 2004 determinations.

28                  The concluding paragraphs of the AAT’s reasons for decision of 26 November 2004, following upon the passage at par 34 I have earlier cited, are set out below, the same purporting to explain the basis for what may be described as Telstra’s change of approach in relation to ongoing compensation for Mr Hannaford:

‘36.      At the outset of the hearing in this matter, I expressed the view that I would have been materially assisted by a report from a virologist.  I adhere to that view.  However, both medical practitioners called expressed the opinion that whereas the Applicant’s serology results showed that he had had a past exposure to Ross River Virus they did not confirm a diagnosis of current Ross River Virus infection.

37.       I understand that the Applicant’s general practitioner made a working diagnosis of Ross River Fever on clinical grounds but that has been challenged and the required blood tests refute the diagnosis.

38.       It may well be that the Applicant suffered from some other parasitic infection but no evidence was led as to what that might be and it is not the task of this Tribunal to seek for itself alternative diagnosis.  Whatever ailed the Applicant in February/March 2002, I am satisfied that on the basis of the blood tests performed, it was not Ross River Fever.  The decisions under review are therefore affirmed.’

29                  By amended notice of appeal bearing date 15 February 2005 from the decision of the AAT filed in the Federal Court, subsequently addressed of course by the primary  judge below, Mr Hannaford raised the following question of law:

‘Whether the tribunal erred in law in determining that it had jurisdiction to consider liability pursuant to section 14 of the [SRC] Act when it reviewed the decisions before it.’

It was explained on behalf of Mr Hannaford that the decision-making placed before the AAT concerned what was described as the degree of his incapacity pursuant to s 16 and Division 3 of Part II the SRC Act, and his permanent impairment and non-economic loss pursuant to ss 24 and 27 of the SRC Act.  I have earlier reproduced the material part of the texts of those sections of the SRC Act.  Part II of the SRC Act is headed ‘Compensation’ and Division 3 thereof is headed ‘Injuries resulting in incapacity for work’. 

30                  For the purpose of raising the question of law the subject of the amended notice of appeal, particulars consisting of the following nine paragraphs were summarised by counsel for Mr Hannaford.  Because of the extent of complexity of legal processes pursued and decision-making pursuant thereto, the text of those particulars is reproduced below in chronological sequence, despite repetitive references to the events I have already recorded, and so that the entire context of prior decisions concerning Mr Hannaford’s case may be more conveniently appreciated:

(i)         Mr Hannaford lodged a claim on 3 May 2002 for compensation under the SRC Act;

(ii)        on 8 May 2002 Telstra accepted liability of the claim pursuant to s 14 of the SRC Act, and allowed compensation for medical expenses related to the claim and compensation for incapacity;

(iii)       on about 29 July 2003 Mr Hannaford made a claim in respect of permanent impairment pursuant to ss 24 and 27 of the SRC Act (called ‘permanent impairment claim’);

(iv)       on 31 October 2003 Telstra determined that it was no longer liable to pay compensation in respect of medical expenses and incapacity in respect of the claim;

(v)        on 10 December 2003 Telstra affirmed the determination of 31 October 2003 in a review pursuant to s 62 of the SRC Act (called ‘Reviewable Decision of 31 October 2003’);

(vi)       on 17 February 2004 Telstra refused the permanent impairment claim; on 9 March 2004 Telstra affirmed that determination of 17 February 2004 in the context of a review pursuant to s 62 of the SRC Act (called ‘Permanent Impairment Reviewable Decision’);

(vii)      on 14 July 2004 pursuant to s 42D of the AAT Act, the AAT remitted the Reviewable Decision to Telstra for consideration; on that day Telstra determined that it was no longer liable to pay compensation in respect of medical expenses under s 16 of the SRC Act and in respect of incapacity under ss 19 to 23 of the SRC Act in respect of the claim (called ‘Reviewable Decision of 14 July 2004’);

(viii)      in its decision of 26 November 2004, the AAT affirmed the Reviewable Decision of 14 July 2004 and the Permanent Impairment of Reviewable Decision, on the basis that it was not estopped from considering liability in terms of s 14 of the SRC Act; and

(ix)       there was no jurisdiction in the AAT to consider liability in terms of s 14 of the SRC Act, as there had not been any review, pursuant to s 62 of the SRC Act, of the determination of 8 May 2002 that had accepted liability under s 14 of the SRC Act. 

31                  The reference made in (viii) above as to an asserted absence of an estoppel operating in derogation or denial of Telstra’s ultimate non-acceptance of liability in favour of Mr Hannaford may be observed, that being of course the case advanced by Mr Hannaford by reason of Telstra’s initial acceptance of liability referred to in (ii) above.

The reasons for the decision of the primary judge

32                  The primary judge described the central issue arising on Mr Hannaford’s application for review by way of appeal to the Federal Court at first instance more comprehensively as follows:

‘… whether, in reviewing determinations under ss 16, 19, 24 and 27 (but not a determination under s 14) it is open to the Tribunal to consider whether the facts underpinning a determination earlier made under s 14, ever existed and [to] affirm determinations under any of these four sections on the basis that a material fact (necessary to support the determination under s 14) did not exist.’

That description of the issue presented to the primary judge is in line with the question of law raised by Mr Hannaford’s amended notice of appeal which I have earlier extracted.  Telstra’s case in response was to the effect that it was open to the AAT to so consider those issues (as of course the AAT had earlier decided), whereas Mr Hannaford’s case was that a s 14 determination was immune from reconsideration by the AAT, including the facts underpinning it, unless the reviewable decision in issue before the AAT was itself a decision under s 62 of the SRC Act by way of reconsideration of the determination under s 14 (see in that regard the concluding sentence in [27] of the reasons for decision of the primary judge).  Telstra had not, in the context of the events I have recorded, purported to undertake any such reconsideration explicitly pursuant to s 14 of the SRC Act. 

33                  The primary judge acknowledged nevertheless that the reasons for judgment of Sackville J in Power v Comcare (1998) 89 FCR 514 provided ‘clear support for the position of [Telstra] here pursued’.  In that regard, Sackville J said at 526 as follows:

‘I think the better view is that the reconsideration decision-maker, for the purpose of determining whether Comcare had a continuing liability to compensate the applicant for his coronary condition, had power to consider whether that condition had ever been causally related to his work.’

That acknowledgment of the primary judge is not without significance to Telstra’s case on the present appeal, notwithstanding that the primary judge adopted a different view to that taken above in Power.  The context to that dictum of Sackville J, commencing at 525 of his Honour’s reasons for judgment included the following clarification of further significance by reference to the operation of s 62 of the SRC Act:

‘I should interpose that it was common ground that the decision of 22 March 1995 was not a reconsideration, pursuant to s 62(1) of the SRC Act, of either the 1990 or 1993 determinations.  In other words, both parties explicitly agree that Comcare had not purported to exercise the power, conferred by s 62(1) of the SRC Act, to reconsider the earlier determinations on its own motion.’

34                  Subsequently in Comcare v Hill (1999) 56 ALD 487, in the context of an application for review by way of appeal relating to quantum of compensation, Spender J determined at first instance that the AAT had erred in refusing Comcare the right to seek a review of the question whether there was a connection between an employee’s myocardial infarction and his employment, that context being a subsequent lump sum claim to permanent compensation, his Honour holding also that Comcare was not bound by an issue estoppel flowing from Comcare’s initial determination of liability.  In so doing, Spender J accepted that the circumstances in Hill were a ‘little different’ to those involved in Power, in that Comcare had initially determined that it was liable to pay compensation for medical expenses and incapacity pursuant to ss 16 and 19 respectively, and having later sought a lump sum payment for permanent impairment.  The primary judge also acknowledged that ‘the judgment in Hill … support[ed] the approach of the Tribunal in this matter’, Spender J having concluded that the AAT’s preceding ruling in the context of that Hill litigation was wrong for the following reason:

‘Similar questions were considered by Sackville J [in Power].  Although the circumstances [in Power] were a little different, his Honour reviewed the statutory scheme and relevant cases, and held that both Comcare, under s 62 of the [Act] and the AAT, pursuant to ss 62 and 43(1) of the Administrative Appeals Tribunal Act, could analyse all the necessary facts, including the question of whether the subject injury was work related, in order to resolve the question of liability.  His Honour’s conclusion was that no issue estoppel arose from the earlier determination or its affirmation by the AAT’.

The primary judge asserted the view however that Spender J ‘… was wrong in suggesting… that the reconsideration power (under s 62) can be exercised by the Tribunal in relation to a determination other than the determination which had been reconsidered and which had given rise to the reviewable decision…’.  I have encountered difficulty in accepting that restrictive view of the primary judge as to the scope of operation of s 62, at least in the light of the purported generality of the language used in the framework of s 62. 

35                  In thus expressing disagreement with the decision in Hill, the primary judge purportedly placed reliance upon the subsequent Full Federal Court reasoning in Lees v Comcare (1999) 56 ALD 84 (Wilcox, Branson and Tamberlin JJ) at [33]-[39], where it was concluded unanimously that the AAT had erred in deciding that it could consider claims for compensation for permanent impairment and non-economic loss in the context of its review of a reviewable decision concerning liability under s 14.  That passage of the reasoning of the Full Court included in particular the following references below to ‘the Act’ being of course to the SRC Act:

‘34.      … A determination under s 14 cannot amount to more than a determination that Comcare “is liable to pay compensation in accordance with this Act” in respect of a particular injury.  The amount of compensation which Comcare will be liable to pay, the person or persons to whom the compensation will be payable and the time or times at which Comcare’s liability will give rise to a present obligation to make payments are, as the above examination of the structure of the Act reveals, all matters to be determined under other provisions of the Act.’

I do not understand Telstra to have submitted to the contrary of those views as to the operation of s 14, at least so far as so framed.  Moreover the Full Court had earlier observed in Lees, in relation to the scope of operation relevantly of the SRC Act, as follows:

‘27.      As Finn J noted [in Comcare v Burton (1998) 157 ALR 522 at 525], s 14 is the central provision of the Act so far as the liability of Comcare to pay compensation is concerned.  Section 14 creates a liability in Comcare in respect of injuries suffered by employees which result in death, incapacity for work or impairment.  However, the liability in Comcare created by s 14 is qualified in two ways.  First, such liability is a liability “subject to” Part II of the Act.  That is, it is a liability limited in its extent by other provisions of Part II of the Act… Secondly, the liability is a liability to pay compensation “in accordance with” the Act.  That is, it is a liability to pay the compensation for which the statute provides, as required by the Act: see, for example, ss 17(3), (4), (5), 19, 20, 24 and 25.’

Those qualifications bear implicitly upon the present debate, in that they reflect the generality of the scope of s 14, generality in the sense that they foreshadow the crystallisation of the liability to compensate in the various circumstances of Part II (headed ‘Compensation’)thereafter to follow, being a generality reflected in particular by subsection (1) thereof. 

36                  The Full Court in Lees said further at [35] of its reasons that a determination under s 14 was not ‘without real significance’, in that it would ‘… involve findings on the following matters.  First, that an appropriate notice of injury has been given to the relevant authority as required by s 53 of the Act; secondly, that a claim for compensation has been made as required by s 54 of the Act; thirdly, that the person who made the claim or on whose behalf the claim was made was an “employee” at the time of the alleged injury (ss 4 and 5); fourthly, that the employee suffered an injury (s 4); and finally, that the injury has resulted in death, incapacity for work or impairment.’  Sections 53 and 54 appear in Part V of the SRC Act, headed ‘Claims for Compensation’. 

37                  After summarising the operation of s 62 of the SRC Act, which as I have foreshadowed appears within Part VI headed ‘Reconsideration and review of determinations’, the Full Court in Lees moved to a discussion of the AAT’s jurisdiction to review a reviewable decision pursuant to s 64 of the SRC Act; that discussion of the Full Court is reproduced in full below:

‘[39]   In considering the extent of the power of the AAT when reviewing decisions under the Act, it is to be noted, first that the AAT is authorised by s 64 of the Act to review only reviewable decisions – that is, for present purposes, second tier or reconsideration decisions made under s 62 of the Act.  Decisions under s 62 of the Act are the result of the reconsideration by Comcare or a licensed authority of a determination, as defined by s 60 of the Act, concerning which a claimant will have received a notice in writing setting out the terms of the determination and the reasons for the determination: s 61(1).  Secondly, it is to be noted that the powers of the AAT under s 43(1) of the AAT Act are powers “[f]or the purpose of reviewing” the reviewable decision, not powers that may be exercised at large.  Further, the powers and discretions that the AAT may exercise under s 43(1) are the powers and discretions conferred by the Act on the determining authority for the purposes of reconsidering a determination under s 62 of the Act. The AAT will not be authorised on review of a reviewable decision to exercise any powers and discretions which would not have been available to the determining authority at the second tier decision-making stage, albeit that such powers and discretions might have been available to the determining authority at the first tier decision-making stage’.

The AAT did not exemplify circumstances which would attract the operation of the last sentence of that discussion of the statutory review provisions, and it does not explicitly address the potential significance of a change in diagnosis as to the cause of an employment illness or disability.

38                  The primary judge next drew attention to two first instance decisions of the Federal Court that were made subsequently to Lees, and which concerned the operation mainly of s 64 of the SRC Act.  The first was Australian Postal Commission v Oudyn (2003) 73 ALD 659 (Cooper J), and the second Rosillo v Telstra Corporation Limited (2003) 77 ALD 396 (Madgwick J).  In relation to Oudyn, the primary judge extracted in full [29]-[33] from Cooper J’s reasons for judgment, where it was observed (inter alia) that ‘[t]he decision of the Full Court in Lees makes clear that a decision to accept liability under s 14 of the Act involves no more than acceptance of a liability to pay under s 14 compensation under the Act in accordance with the provisions of the Act in respect of a particular injury’, and further that ‘[t]he content, duration and means of satisfying the liability to pay compensation is to be found and worked out by determinations made under other sections of the Act including s 24… [which] do not require that the determination under s 14 of the Act to accept liability be reconsidered or revoked when the liability to pay is satisfied by payment in accordance with the requirements of one or more of the other sections of the Act [since] [t]he liability under s 14 of the Act to pay compensation stands until it is discharged in accordance with the Act’.  Thereafter Cooper J referred (in Oudyn) to the operation of s 62 of the SRC Act, and concluded that ‘[w]here APC is paying compensation under one or more sections of the Act and it determines that its liability to pay in accordance with that section has been satisfied, the relevant determination is that the payment cease because the circumstances entitling payment under that section no longer exist, or can no longer be made out by the claimant… [for the reason that the section] operates in respect of the claim then in existence for the payment of compensation under that section [and it].  It does not operate as a bar to future claims in respect of that injury if the circumstances under the section can be made out again in the future, or if it can be brought under another applicable section of the Act.’  Those observations of Cooper J made in Oudyn do not bear precisely upon the issue arising in the present proceedings, but on close analysis bear implicitly a measure of support for Telstra’s contentions as to the operation relevantly of the SRC Act. 

39                  The further decision of this Court in Rosillo, which resulted in the setting aside of the decision there below of the AAT, which had upheld a Telstra decision affirming a determination under s 14 of the SRC Act ‘… ceasing liability under the Act “on and from” the date of determination’, was described by the primary judge below as having dealt with ‘a similar situation’ as that addressed in Oudyn. 

40                  The primary judge observed that the circumstances involved in Lees were not directly parallel to those involved in Power and Hill, nor to those involved in the present litigation, but pointed to what he saw as significant that the Full Court in Lees placed ‘materially greater emphasis on the structure embodied in the [SRC] Act creating the three-tiered process of decision-making and review’ than what his Honour thought to be evident in the first instance judgments in Power and Hill.  It was in that context that the primary judge made the following observations at [41] of his reasons for decision:

‘The three-tiered structure involves determinations being made of the type… [the subject of ss 14,16,19, 24 and 27 of the SRC Act] continue to have legal effect until and unless they are reconsidered under s 62 and varied or revoked in the exercise of the powers conferred by s 62(5).  It may be thought that a determination under s 14 does not have any particular significance because its operation, in practical terms, is conditional upon another determination being made.  Its legal effect is, in a sense, inchoate.  However, the Act confers on a decision under that section the status of determination (having regard to the definition in s 60) and, as such, it is no less amenable to reconsideration than a determination made under another section with, potentially, an operative practical effect involving payment to a claimant.’

So much would once more appear to be uncontroversial, but the issue remains as to why the necessity for a formal process of reconsideration of the basis for an earlier decision when that basis is subsequently shown to be vitiated. 

41                  The primary judge next referred to the fourth and fifth findings said by him to be required by a s 14 determination, the fourth being ‘whether the employee suffered an injury’, and the fifth ‘whether the injury resulted in death, incapacity for work or impairment’, and said that a finding whether an employee suffered an injury would involve a consideration of whether the injury (or relevantly a disease) arose out of or in the course of employment, or in the case of a disease, was contributed to in a material degree by that employment.  The primary judge further said that ‘a necessary step in making a determination is making findings about those matters,’ and thus if the determination is to be in the employee’s favour, then it would ‘include a finding that the claimant has suffered from an injury or disease with the requisite connection to the employment’.  As a consequence, so his Honour’s reasoning continued, ‘[f]airly clearly, the power to make a determination under s 14 includes the power to make a finding about’the latter subject, as well as about the preceding four matters identified by his Honour.  To the extent that the injury must satisfy the s 4 definition, which contains three definitive alternatives, so much is beyond dispute.

42                  The primary judge thereafter postulated in [43] of his reasons that ‘[t]he Full Court [in Lees] indicated at [39] of its judgment… that the powers and discretions exercisable by the Tribunal in reviewing a reviewable decision are limited to the powers that could have been exercised by the person who had reconsidered the determination or determinations under s 62 of the Act and who made the reviewable decision’.  I have of course already extracted above the whole of that paragraph of the reasons in Lees.  The primary judge considered further that ‘it is not a large step to say, and it would be consistent with the approach taken by the Full Court [in Lees],that the power to make a finding about one of the five matters arising under s 14, inconsistent with findings earlier made in a determination under that section, exists only when the decision-maker is reconsidering that determination and not otherwise.’  I am unable to perceive why that should be so, either by reason of the text, and the context to s 14, and in any event by reason of the provision made by s 62 of the SRC Act as to reconsideration of determination.  I would respectfully disagree moreover with the ensuing observation of the primary judge (in [43] of his reasons) that ‘… the Tribunal only has power to make a finding that a claimant did, or did not, suffer from a disease or injury, and if so, [whether] the disease or injury had the requisite connection with the employment when the reviewable decision entailed a reconsideration of the determination under s 14’, and further that  ‘… this is the way the Act, (together with the AAT Act), was intended to operate having regard to the Full Court’s construction [in Lees] of various provisions of the Act’.

43                  The primary judge did not regard any such scheme of operation of the SRC Act to be ‘unworkable’, pointing out in [44] of his reasons that ‘[i]f a determination is made under s 14 in favour of a claimant and later medical opinions or other evidence raises doubts about whether it should have been made, then Comcare (or a body in a similar position such as [Telstra]) can act of its own motion and reconsider the determination under s 62’.  By that means, the primary judge asserted that ‘clear and unambiguous rights of review arise and the subject matter of the review will be clear as will the powers of the Tribunal when undertaking the review’.  The primary judge drew attention in that context to Telstra having raised in its submissions below ‘the spectre of the vocation of a s 14 determination resulting in a consequential liability on the part of the claimant to repay money paid under one or a number of determinations made under other sections’,but observed that the raising of that question had not been the subject of any detailed submissions, and accordingly the primary judge characterised his ensuing views below as provisional. 

44                  The primary judge addressed finally the operation of s 114(1) of the SRC Act, whereby Comcare or a licensed Commonwealth authority or corporation, such as of course Telstra, may recover an amount of compensation that has been paid to a person under the SRC Act if the amount should not have been paid, whether ‘… in consequence of a false or misleading statement or representation or in consequence of a failure or omission to comply with this Act’, or even if it be a ‘payment made on a mistaken view of the facts’.  In any event, the primary judge pointed out that ‘…in this matter, the revocation of earlier determinations is not a course [Telstra] has taken or has indicated it proposes to take’.

45                  In the result, the primary judge concluded that ‘[i]t was not open to the [AAT] to review findings on the question of whether [Mr Hannaford] had suffered [Ross River Fever], and thereby make findings contrary to those underpinning the earlier determinations under s 14’. The primary judge concluded his reasons with the observation that ‘[p]otentially [Mr Hannaford] will gain little from his success in these proceedings, as the determination under s 14 may be reconsidered and revoked under s 62 for the reasons which prompted the Tribunal to determine the matter as it did.’ In the result, the primary judge disallowed Telstra’s appeal from the AAT and set aside its decision below, and remitted ‘the matter’ to the AAT for consideration according to law.  Telstra was ordered to pay Mr Hannaford’s costs of the application, made of course by way of statutory appeal from the AAT to the Federal Court at first instance.  Accordingly as a consequence of the primary judge’s decision, the status quo antecedently to Telstra’s receipt of updated evidence in contradiction of the earlier diagnosis of Ross River fever remained in operation in relation to Telstra’s preceding outlays made to or for the benefit of Mr Hannaford, and would continue to do so in the absence of any effective s 62 revocation or variation (see in particular subsection (5) thereof). 

The issue arising on the appeal as framed by Telstra

46                  The issue arising in this appeal, as framed by Telstra, boils down to whether in reviewing on the merits a decision on Mr Hannaford’s claims based on Division 1 headed ‘Injuries, property loss or damage, medical expenses’, and on s 16 in particular relating to ‘medical expenses etc’, and further based on Division 3 relating generally to ‘injuries resulting in incapacity for work’,and yet further based on ss 24 and 27 of Division 4 relating to ‘Injuries resulting in impairment’, in each case being divisions of Part II of the SRC Act, the AAT had jurisdiction to make a finding of fact which was inconsistent with an earlier s 14 determination, in circumstances where the AAT did not have before it an application to review the earlier s 14 determination and did not purport to review the earlier determination.  Or as framed by Mr Hannaford, whether there is a fundamental difference between an acceptance of liability pursuant to s 14 of the SRC Act and any consequential consideration as to whether compensation should be made under or referrable to the various heads of compensation elsewhere provided by at least Part II the SRC Act headed ‘Compensation’, and in particular by ss 16, 19, 24 and 27 thereof. 

47                  It was in those circumstances that the primary judge held that it was not open to the AAT to review the findings of Telstra the subject of its earlier determination in favour of Mr Hannaford, made on the footing of s 14 of the SRC Act, as to whether he had suffered Ross River fever, and consequently for the AAT to make findings of fact contrary to those underpinning that earlier determination by Telstra so made under s 14.  As the respondent to the appeal, Mr Hannaford supported the decision and the reasons of the primary judge below which led to his Honour setting aside the AAT’s findings and the remission to the AAT of the matters therefore remaining in issue. 

48                  At the threshold of its submissions on the appeal, Telstra asserted that such approach of the primary judge ‘fails to distinguish between a necessary finding of fact, which may be common to more than one claim, and the claims themselves’.  Telstra emphasised that neither itself, nor the AAT, purported to revoke the Telstra determination of 8 May 2002 by which liability was initially accepted by Telstra, pursuant to s 14 of the SRC Act, in respect of Mr Hannaford’s claim.  Telstra’s case was that the subsequent determinations of Telstra by way of rejection of the diagnosis and thus as to the infliction of Ross River fever, which were subsequently affirmed by the AAT, operated only from 31 October 2003 (being the date of the ultimate Telstra decision on reconsideration) in respect of the claims for incapacity payments and medical treatment expenses, and not beforehand.  Hence Telstra’s position involved denial in principle of ongoing liability for compensation for permanent impairment benefits, inclusive of non-economic loss, under ss 24 and 27 of the SRC Act, being a denial not purporting to adversely affect the compensation payments earlier made to Mr Hannaford between 18 March 2002 and 31 October 2003.  Hence ultimately the factual finding (Telstra’s emphasis) in relation to Ross River fever, made and communicated to Mr Hannaford by or on behalf of Telstra on 8 May 2002, according to Telstra’s case, was ‘one which the AAT had the power to make in performing its duty to consider whether that condition was causally related to his work for the purpose of determining whether [Telstra] had a continuing liability to compensate [Mr Hannaford] for his condition of Ross River fever, or a liability to compensate him for any permanent impairment alleged to arise out of that condition’, Telstra citing Power at 526 in that regard (ante).

49                  Telstra submitted moreover that the authorities ‘make it clear’ that a determination of liability under s 14 of the SRC Act may only be revisited by way of a reconsideration of that determination pursuant to s 62 of the SRC Act, citing thereby the following dicta of the AAT appearing in Re Liu and Comcare [2004] AATA 617 (18 June 2004)  (Downes P, Handley DP and Allen SM) (which in turn cited Oudyn at 666-667):

‘But that is a reconsideration of whether the original determination was correct on its merits and cannot address any issue of cessation of correctly determined liability.  A changed determination upon such a reconsideration recommendation is a determination that there never was a compensable injury.’

Telstra pointed out nevertheless, in that context that ‘…neither [Telstra], nor the Tribunal below purported to revoke [Telstra’s] determination dated 8 May 2002, by which liability was initially accepted in respect of [Mr Hannaford’s] claim made pursuant to s 14’, and further that ‘[t]he determinations of the reconsideration decision-maker (of course Telstra), affirmed by the Tribunal, operated only from 31 October 2003 in respect to incapacity payments and medical treatment expenses’, and as above indicated involved denial of ‘liability for permanent impairment benefits under ss 24 and 27 of the SRC Act’.

50                  It followed, in Telstra’s further submission, that the factual finding made on 26 November 2004 by the AAT, to the effect that Mr Hannaford was not inflicted with Ross River fever, was ‘… one which the [AAT] had the power to make in performing its duty to consider whether that condition was causally related to his work for the purpose of determining whether [Telstra] had a continuing liability to compensate [Mr Hannaford] for his condition of Ross River Fever or a liability to compensate him for permanent impairment alleged to arise out of that condition’, Telstra repeating in that context reliance upon Power at 526.  The general law on the subject of AAT decision-making was submitted by Telstra to be at least partly reflected in terms of approach in principle of the following dictum ofFrench J in Federal Commission of Taxation v Swift and Others (1989) 18 ALD 679, where at 691, his Honour said that the AAT was:

‘…bound to consider the relevant facts proved on the evidence before it and to decide on the basis of those facts what was the correct or preferable decision …  In that process it was neither entitled nor required to place weight upon the fact that the Commissioner had exercised his discretion in a particular way …’

In relation to the operation of that principle of administrative law, his Honour additionally cited dicta from authorities inter alia of the Full Federal Court in Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589 (Bowen CJ and Deane J), and Fletcher v Federal Commissioner of Taxation (1988)84 ALR 295 at 306 (Lockhart, Wilcox and Burchett JJ).

51                  Moreover as to the primary judge’s purported reliance upon Lees, Telstrasubmitted that nothing was there said by the Full Court inconsistently with the approach taken by Sackville J in Power to which I have earlier referred.  I was referred in that regard to [50] of the Full Court’s reasons for decision in Lees, where the following appears:

‘The only issues under s 24 of the Act which required determination in Ms Lees’ case were the issues of whether she had a permanent impairment and, if she did, the amount of compensation payable under the section in respect of that impairment.  Neither of these issues had been determined at the first tier decision-making stage.  Necessarily in the circumstances, there had been no reconsideration under s 62 of the Act of a determination on these issues.  Consequently there was no reviewable decision touching on the issues to found an application to the AAT under s 64 of the Act.  The reviewable decision which founded Ms Lees’ application to the AAT was the determination … concerning Ms Lees’ entitlement under s 16 of the Act for compensation in respect of taxi fares incurred, or to be incurred, for the purpose of obtaining medical treatment.  It was that determination, and that determination only, that s 64 of the Act authorised the AAT to review.  The powers of the AAT under s 43 of the AAT Act were powers which it was authorised to exercise for the purpose of reviewing only that determination.’

Section 24 of the SRC Act, which I have earlier partly extracted, relates of course to compensation for injuries resulting in permanent impairment, and the preceding s 16, to which reference has also earlier been made, relates to ‘medical expenses etc’. 

52                  In the present case, Telstra further submitted, the AAT had placed before it two decisions for review, in that in addition to that of Telstra of 9 March 2004 affirming its earlier determination of 17 February 2004 to the effect that Mr Hannaford had suffered no permanent impairment, he had sought review of Telstra’s subsequent decision of 26 July 2004 that he had no liability in respect of either incapacity for work or medical treatment expenses as at 31 October 2003.  Thus Telstra contended that its reconsideration, and that subsequently of the AAT made on 26 November 2004, was required to analyse all the necessary information in order ‘to determine whether [Telstra] had a continuing liability, including the fresh information that the blood tests made on 18 March 2002 had not shown that [Mr Hannaford] tested positive for combined lgG/lgM antigens, as initially stated by his treating Rheumatologist… but positive for lgG only’.  Once those findings had been made, so Telstra thereafter submitted, its controversial conclusions ‘were inevitable’ that Mr Hannaford ‘no longer suffered incapacity for work or required medical treatment for Ross River Virus’, and further that ‘he suffered no permanent impairment as a result of the continuing effects of that condition’.  Accordingly Telstra further submitted that ‘the decisions that compensation was not payable under s 16 and Part II, Division 3 of the SRC Act [ie relating to incapacity and medical treatment expenses] or under ss 24 and 27 of that Act [ie relating to permanent impairment] were affirmed, but the liability previously accepted under s 14 was not revoked or disturbed’.

53                  Telstra asserted that the primary judge appeared ‘to have mistakenly thought that the issues before him involved the legal effect of the earlier s 14 determination, and accordingly he appears to have found support for the conclusion he reached in what might be termed the “on and from”line of cases, including Oudyn, Rosillo, and Duong v Australian Postal Corporation [2005] FCA 991 (Edmonds J).  Telstra submitted however that those cases were concerned with the issue whether once the employer found that liability had ceased in respect of a condition previously accepted under s 14 of the SRC Act, the employee had no further (Telstra’s emphasis) entitlement to claim compensation under any section of the SRC Act.  Thus in Duong, Edmonds Jpointed out at [44] that ‘[i]nsofar as the reviewable decision limited [APC’s] liability to pay compensation up to 26 March 1995, that was a limitation on its liability to pay pursuant to sub-s 16(1), not a limitation on its accepted liability under s 14.’  So much was pointed out by Telstra to be an issue not involved in the present proceedings, since Telstra had accepted that ‘a departure at that level of fact’ produced no effect upon its previously accepted liability, or indeed any prospective liability.  It was Telstra’s case in effect that leaving intact the existence of a prior s 14 determination contextually to evolving future changes in and to factual circumstances of Mr Hannaford was consistent with the operation of that line of authority.  Telstra emphasised in that context the opening words to s 14 ‘Subject to this Part…’, and further that the obligation to pay compensation must be ‘in accordance with this Act’.

54                  Telstra further submitted that there was no reason in principle why a decision-maker ought to be precluded, pursuant to the operation of the SRC Act, from binding a subsequent decision-maker to deny any future claims which might be made in respect of an accepted condition, but be in effect compelled to bind a future decision-maker to accept a finding of fact which might subsequently be found to have been erroneous on the basis of additional evidence, yet without revisiting the initial determination which, on the evidence available at the time, might have been properly made on the material then in evidence before the decision-maker.  Telstra additionally submitted that the decision of the AAT in the present circumstances, which of course Telstra relied upon, ‘leaves the s 14 determination unaffected as to the past and as to the future’, and also leaves ‘unaffected as to the future the effect of any fresh application relating  to [Mr Hannaford’s] medical condition for the purposes of s 16 and Part II Division 3 of the SRC Act (incapacity and medical treatment expenses) or under ss 24 and 27’

55                  Telstra concluded its submissions by drawing attention to the decision of this Court in Riddle v Telstra Corporation Limited [2006] FCA 58, which was handed down (inclusive of corrigendum) on 10 February 2006, and thus after the decision of the primary judge here the subject of appeal.  That case involved three applications which were heard together, and which were summarised by the presiding judge (Edmonds J) as follows:

(i)         an applicant’s seeking of review of an AAT decision of 6 January 2004, which had affirmed a determination made by Telstra on 28 October 2003 ceasing liability in respect of an aggravation of pre-existing spinal canal ‘stenosis at L4/5’ on and from 28 October 2003;

(ii)        the same applicant’s further seeking of review of an AAT decision of 19 August 2004, which had affirmed a determination made by Telstra on 4 August 2004 denying liability in respect of permanent impairment allegedly resulting from that condition;

(iii)       the same applicant’s further seeking of review of an AAT decision of 26 October 2004 which had affirmed a determination made by Telstra on 6 October 2004 that the applicant had not suffered any injury as a result of the nature and conditions of his employment with Telstra.

All three decisions had related to claims for compensation submitted by that applicant (Mr Riddle) following the alleged onset of symptoms affecting his lower back and right buttock on 19 February 2003 whilst he was walking from a railway station on his way home from work.

56                  The determination that had been earlier made by the AAT relating to Mr Riddle was to set aside the first of the above three decisions of Telstra but to affirm the second and third thereof, and thus to uphold the essence of Telstra’s case on the AAT’s review.  In relation to the second and third decisions, the relevant grounds of appeal of Mr Riddle to the Federal Court were that the AAT had made a decision to review the proceedings with regard to s 62(1) of the SRC Act ‘… when s 62(1) was not within the jurisdiction of the Tribunal’, and further that ‘… the [AAT] made a decision pursuant to s 14 of the SCR Act with regard to an injury… when an earlier s 14 SRC Act decision relating to the injury… had not been reconsidered or set aside.’  Hence there arose for resolution a similar issue as here involved in relation to the scope of operation of a s 14 decision, though in perhaps a more complex setting.  It is unnecessary for me to record in detail an analysis of the submissions of the respective parties advanced in Riddle and the findings of Edmonds J made in relation thereto.  It suffices to observe that the provisions of the SRC Act here also relevant were analysed by his Honour, along with some of the authorities which I have outlined, including those of Power, Oudyn, Lees and Hill.  His Honour expressed a preference for the view relevantly of Sackville J in Power (ante)to that of the primary judge in the present Hannaford proceedings (which by then had been decided), asserting at [40] that the approach of the primary judge ‘… has the potential, with respect, to render [the scheme of the SRA Act] cumbersome in determining claims for compensation under specific heads which are rejected… following upon a determination of liability under s 14, unless that determination is itself reconsidered (by the determining authority’s own motion under s 62(1) of the SRC Act…’, and further at [55] that the approach of the applicant for relief in Riddle ‘… fundamentally misconceives the decisions under review as being decisions made under s 14 of the SRC Act [when] they are not’.  Counsel for Mr Hannaford found it therefore necessary, in the context of the present appeal, to submit that the reasoning of Edmonds J in Riddle was wrong, and that of the primary judge in Hannaford (here of course below) should be preferred.

Conclusions

57                  In my opinion, it should be concluded, upon the correct construction of the SRC Act, and in particular of the provisions thereof upon which I have focused attention in these reasons, that the AAT is empowered to make subsequent findings of fact in relation to the circumstances the subject of decision-making under ss 16 and 19 of the SRC Act, and also under ss 21 and 27 of the SRC Act, where the determination of the first instance decision-maker (here of course Telstra) made under the auspices of s 14 of the SRC Act remains in operation in the sense that it has not been the subject of any inconsistent outcome in the context of a subsequent review by the AAT.  The statutory scheme allows for progressive and evolving decision-making giving effect to the provisions of ongoing review of relief or entitlements in the nature of course of workers compensation, being review which allows for adjustment or change in the light of events and circumstances which may subsequently happen.  The statutory scheme hence reflects a flexible scope for adjustment by way of decisions in the nature of awards to be made subsequently to the determination of s 14 liability, whether that determination be made in isolation, or in the context of decision-making concerning consequential relief that may be required in the light of evolving circumstances.  It is therefore a scheme which allows progressively for ongoing relief, and is thus not comparable of course with the process of curial resolution of the traditional common law entitlement of an injured employee for damages as a consequence of the negligent conduct of an employer.  The opening words of s 14(1) ‘[s]ubject to this Part…’ are consistent with the flexibility inherent in the ensuing codification of the various facets of compensation envisaged.

58                  The first instance decisions of this Court in Power, Hill and Riddle, which I have reviewed, each reflect in my opinion correctly the operation of the statutory scheme, and in particular its provision for ongoing adjustment designed to accommodate changing circumstances inclusive for instance (as here involved) of changing medical diagnosis.  The approach to statutory construction and operation evident in those first instance authorities is not at odds with the approach to statutory construction and operation adopted by the Full Court in Lees subsequently to Power and Hill and prior to Riddle. 

59                  I would therefore conclude, contrary to the decision of the primary judge, that the AAT below was duly empowered, upon the true construction of the SRA Act and in the events which happened:

(i)         to make findings of fact that effectively undercut the necessary findings of fact made in the initial or original decision of Telstra under s 14 of the SRC Act to accept liability in respect of Mr Hannaford’s claim for compensation; and

(ii)        to do so in circumstances where the AAT was undertaking its review of whether any compensation should be payable or further payable, for instance under ss 16 and 19 of the SRC Act, and/or under ss 21 and 27 of the SRC Act; and

(iii)       to do so in the circumstances further where Telstra’s s 14 decision remained in force to the extent that it had not been actually reversed, and had not been the subject of any adverse review per se by the AAT.

In short, it matters not, upon the true construction of the SRC Act, that there has never been any reconsideration of the determination of Telstra of 8 May 2002 whereby liability under s 14 thereof for Mr Hannaford’s claim originally made on 1 May 2002 had been accepted.

60                  In the result the appeal from the decision below to the primary judge should be upheld and set aside, with a consequential order as to costs in favour of Telstra. 

Associate:

Dated:              2 June 2006