CATCHWORDS
ADMINISTRATIVE LAW - appeal from the AAT - entitlement to payments for course of rehabilitation - failure of Comcare to comply with legislative scheme resulting in ineligibility - whether HECS payments are a cost of a rehabilitation course - consideration of ex gratia payment
Compensation (Commonwealth Government Employees) Act 1971
Social Security Act 1991
Safety Rehabilitation and Compensation Act 1988
Shaddock v Parramatta City Council [1983] 151 CLR 590
Formosa v Secretary, Department of Social Security [1988] 15 ALD 657
Howell v Falmouth Boat Construction Co Ltd [1951] AC 837
SAMUEL THOMAS HARDIN v COMCARE AUSTRALIA
No. QG8 of 1994
EINFELD J
SYDNEY (heard in Brisbane)
17 MAY 1995
IN THE FEDERAL COURT OF AUSTRALIA )
QUEENSLAND DISTRICT REGISTRY ) No. G 8 of 1994
GENERAL DIVISION )
Between: SAMUEL THOMAS HARDIN
Applicant
And: COMCARE AUSTRALIA
Respondent
MINUTE OF ORDERS
The Court orders that:
1. the application be dismissed.
2. there be no order as to costs.
Note: Settlement and entry of orders are dealt with in accordance with Order 36 of the Federal Court Rules.
EINFELD J
SYDNEY (heard in Brisbane)
17 MAY 1995
IN THE FEDERAL COURT OF AUSTRALIA )
QUEENSLAND DISTRICT REGISTRY ) No. G 8 of 1994
GENERAL DIVISION )
Between: SAMUEL THOMAS HARDIN
Applicant
And: COMCARE AUSTRALIA
Respondent
REASONS FOR JUDGMENT
EINFELD J SYDNEY 17 MAY 1995
(Heard in Brisbane)
This applicant appeals from a decision of the Administrative Appeals Tribunal (the Tribunal) of 22 December 1993 in which the Tribunal affirmed two decisions of the respondent (Comcare).
Background
In 1982, while employed by the Department of Defence as a clerk, the applicant suffered a disease for which he became entitled to compensation under the now repealed Compensation (Commonwealth Government Employees) Act 1971. He retired from the Commonwealth Public Service on the basis of his illness in June 1983 but continued to be paid compensation under the 1971 Act until 1 December 1988, when the Safety Rehabilitation and Compensation Act (the Act) came into force and the administration of his compensation payments was taken over by Comcare. The Department of Defence took no further part in his compensation or rehabilitation until 1992.
In December 1988 there was some communication between Mr Hardin and Comcare concerning the possibility of his rehabilitation, partly as a result of which the applicant enrolled in the Bachelor of Laws degree at the Queensland University of Technology (QUT) in 1989. On 2 March 1989 Comcare wrote to the applicant and specifically raised the possibility that his legal studies could form part of a rehabilitation program. The proposition was taken further when on 17 April 1989 the applicant received a letter from Comcare confirming that in respect of the first year's study, the view of the administering officer was positive (AB53):
I see the Law course as valuable in a rehabilitation sense to re-establish your skills in coping in the workforce rather than giving you specific "trade" skills in law, at this stage.
A rehabilitation case management plan was formulated and signed on 25 April 1989. Since 1989 the applicant has completed his law degree, being admitted as a barrister in Queensland in December 1992. Each year of the law course was progressively sanctioned by Comcare and expenses continued to be recovered.
The decisions under review
There were two decisions of Comcare under review in the Tribunal. The first was a denial of the applicant's claim that his liability under the Higher Education Contribution Scheme (HECS) incurred between 1989 and 1991 is payable without discretion by Comcare, as a legitimate cost of an approved rehabilitation program. The second was the decision of another officer of Comcare that payment of weekly benefits to Mr Hardin during the rehabilitation program be calculated under section 131 rather than section 37(5) of the Act. Section 131 is a transitional or savings provision dealing with injured persons entitled to benefits under the previous legislation.
The legislative scheme
Section 37 of the Act provides the basic scheme under which rehabilitation programs are provided and paid for by Comcare:
(1) A rehabilitation authority may make a determination that an employee who has suffered an injury resulting in an incapacity for work or an impairment should undertake a rehabilitation program and, where the authority so determines, it may make arrangements with an approved program provider for the provision of a rehabilitation program for the employee.
(2) A rehabilitation authority shall not make arrangements with an approved program provider who is not approved by Comcare under section 34.
(3) ...
(4) The cost of any rehabilitation program provided for an employee under this section shall be paid by the relevant authority in relation to that employee.
(5) Where an employee is undertaking a rehabilitation program under this section, compensation is not payable to the employee under section 19 or 31 but:
(a) if the employee is undertaking a full-time program -- compensation is payable to the person of an amount per week equal to the amount per week of the compensation that would, but for this subsection, have been payable under section 19 if the incapacity referred to in that section had continued throughout the period of the program; or
(b) ...
(6) An employee who is entitled to receive compensation under subsection (5) during a period is not entitled to receive rehabilitation allowance under the Social Security Act 1991 during that period.
In relation to the applicant, "the relevant authority" for the purposes of subsection (4) is Comcare (section 4).
Section 4 of the Act also defines "rehabilitation authority" in the following terms:
"rehabilitation authority", in relation to an employee, means:
(a) where the employee is employed by an exempt authority - Comcare; and
(b) where the employee is employed by a licensed authority - the principal officer of that authority; and
(ba) if the employee is employed by a licensed corporation - the principal officer of that corporation; and
(c) where the employee is employed by a Department or a Commonwealth authority, other than an exempt authority - the Secretary of the Department or the principal officer of the Commonwealth authority, as the case may be;
The definition of "employee" in section 5 is extensive, and includes the following:
(9) A reference to an employee in a provision of
this Act that applies to an employee at a time after Comcare, an administering
authority, a licensed authority or a licensed corporation has
incurred a liability in relation to the employee under this Act includes,
unless the contrary intention appears, a reference to a person who has ceased
to be an employee.
Section 34 is also relevant to this appeal. It states:
(1) Comcare may, by instrument in writing, approve, for the purposes of this Act, a person who provides rehabilitation programs.
(2) .......
(3) Comcare may approve a person either on its own motion or on request by the person.
(4) The matters to which Comcare shall have regard in deciding whether to approve a person include:
(a)the qualifications of the person and the person's employees; and
(b)the effectiveness, availability and cost of the rehabilitation programs provided by the person.
The issue
With respect to the HECS
payments, the Tribunal decided that they were not a "cost" under the
scheme (s. 37(4)), because they were unascertained future liabilities and not
necessary expenditure for the completion of the course. Because of the conclusions which I have
reached, it has not been necessary for me to determine the correctness of this view. Nor, as willappear, has it been necessary to consider the
reasoning of theTribunal
for its decision that sections 19 and 37(5) did not butsection 131 did apply
here. This is because I have concluded that section 37(5) does not
apply to the applicant on a different basis. As
it happens, this aspect of the case raises the serious difficulty for the
applicant that whereas section 37(5) provides for compensation throughout a
rehabilitation program in accordance with section 19, by section 124(6) the
applicant had no entitlement to compensation under section 19. Making the assumption that section 37 applied
to the applicant, this is what the Tribunal actually held. As, in either case, the applicant derives no
resulting legal entitlement to compensation other than through section 131, I
agree with the Tribunal's conclusion on this matter though for different
reasons.
Until this dispute arose, both parties seem to have accepted that Comcare had the power to make payments to the applicant for expenses incurred in his law course. Indeed for the years involved, Mr Hardin was regularly reimbursed for such expenses as travel, book purchases and student fees. It was impliedly presumed, therefore, that a determination under section 37(1) had been properly made, and that for that purpose Comcare was the relevant rehabilitation authority, and the applicant was an 'employee' under the Act.
This approach turns out to have been misconceived. Even assuming that the applicant is relevantly an 'employee', his rehabilitation authority was not Comcare, but the Secretary of the Department of Defence, and that department has never made a relevant section 37(1) determination. In fact there is no suggestion that the department was involved at all in the decisions concerned. Contrary to what seems to have occurred in this case, the only manner in which Comcare becomes legally involved in a section 37 determination is by section 38, which provides that on the written request of the applicant Comcare shall review the decision of the rehabilitation authority. There having been no such primary decision, and therefore no such review process having been followed in this case, Comcare gained no power to make a determination in the matter.
The applicant submitted, both before me and before the Tribunal, that somehow Comcare, as the Defence Department's agent or in some other way, was the rehabilitation authority. However, there was no evidence to support that contention and as a matter of law this argument was not available. Since section 37(4) makes clear that a program shall only be paid for if it is provided under section 37, there is regrettably a fundamental flaw in the applicant's case.
It is worth noting in this regard that when, in 1992, the applicant undertook the Barristers' Admission Board program, he did so following a written determination by the Department of Defence under section 37(1). Certain expenses in relation to the course were provided by Comcare. There is no dispute relating to this period, and the correct procedure would appear to have been followed.
The Tribunal did not make
a decision in relation to compliance with section 37(1), having decided to
refuse both applications
on other grounds. The Tribunal did,
however, make the following observation (p 6):
There is, in fact, little doubt that the programs as set up in those years did not accord of [sic] Part III of the Safety Rehabilitation and Compensation Act 1988. In particular, the rehabilitation authority as defined means the Secretary of the Department of Defence. The provision of the rehabilitation program should have been effected in the present circumstances by the Secretary of that department with an approved program provider approved by Comcare in accordance with section 34.
The legislative scheme makes clear that the Tribunal was correct in these regards, and that there was never any power under section 37 for payments to the applicant prior to 1992, despite both Comcare and the applicant apparently proceeding on the basis that section 37 did apply.
A further problem for Mr Hardin is the statutory requirement of written approval of the course as a rehabilitation program under section 34. Section 37(2) means that no arrangement can validly be made under section 37 unless with a program provider approved in writing by Comcare. There is no evidence in this case that any procedure of this kind was followed so as to constitute the law school at QUT an approved program provider.
The failure of this claim
on these grounds seems to me a most unjust result. With the obligation of administering the Act,
Comcare evidently failed to realise what was required when it took over the
administration of the applicant's case.
For over three years, it authorised him to incur expenditures and
reimbursed him for them, in circumstances in which it had no legislative
authority to do so. As the available
evidence at the time was otherwise presumably adequate to justify the payments,
it seems probable that had the proper procedure been followed in 1989, the
applicant would have become entitled to the assistance he received, and
potentially to the assistance he now claims.
This is not a case where there is some hitherto unnoticed or
misinterpreted feature of the legislation which disentitled him to the relevant
benefit. In such a case an applicant
receives a real windfall. Rather it is a
case where the applicant has been disentitled to an otherwise appropriate
benefit by the failure of Comcare to undertake the relatively simple
administrative procedure of authorising the course provider and procuring the
relevant determination from the Department of Defence. In the circumstances it is difficult to avoid the impression that
Comcare's officers in 1989 did not understand the terms of the new Act and the
correct procedure. If they had done so,
the applicant would presumably have been properly entitled to all the expenses
in connection with the course.
I have been unable to find
in the legislation or the authorities any basis for relaxing the requirement of
section 37(1) and relieving this manifest injustice to the applicant. Quite clearly Comcare has no power under
section 37(4) to make payments to a formally unapproved provider of a
rehabilitation program that has not been subject of a determination by, in this
case, the Secretary of the Department of Defence. No such determination was made. It is clear that in such circumstances
no estoppel can operate to extend the power of Comcare to make payments from
public revenue: Formosa v Secretary, Department of Social Security
[1988] 15 ALD 657 at 665 per Davies and Gummow JJ; Howell v Falmouth Boat
Construction Co Ltd [1951] AC 837.
For the same reason section 37(5) does not apply to the applicant, so he
must fail on the second application as well.
In Formosa, Justice Burchett observed at 669:
In these circumstances, if in fact the applicant ... should have received any payments of pension for the period 25 February 1986 to 13 November 1986, her loss might well be thought by the appropriate authority to be precisely the kind of thing s. 34A of the Audit Act 1901 was designed to remedy. A statement made on 5 August 1980 by the then Minister for Finance, which is reproduced in Dr Pearce's The Australian Administrative Law Service, pp 6049-50, lays down as the first guiding principle for the application of s. 34A that it covers a case "where a public servant or other person acting on behalf of the government, in the exercise of his duties, has given incorrect information (or taking some action) which had led the claimant to taking a course which was to his financial detriment".
While taking into account
the nature of the HECS liability and the conclusion of the Tribunal that such a
liability would not have been covered by section 37, any similar contemplation
in the
circumstances of this case would lead to serious consideration being given to an ex gratia
payment to the applicant. Otherwise, if the
Tribunal's conclusion in this respect shouldbe wrong, and a broader interpretation given to the
word "cost" in section
37(4), as is certainly arguable and may well beappropriate, Comcare's conduct of the matter may give
rise to
enforceable
rights at the hands of the applicant: Shaddock
v Parramatta City Council [1983] 151 CLR 590.
However that may be, the application must be dismissed but in the circumstances there will be no order as to costs.
Applicant appeared in person assisted by C. Mullins of the Welfare Rights Centre Inc.
For the respondent R. Derrington instructed by M. Belcher of the Australian Government Solicitor
Date of Hearing 9 August 1994
Date of Judgment 17 May 1995
