FEDERAL COURT OF AUSTRALIA

Telstra Corporation Limited v Mahon [2004] FCA 1404

ADMINISTRATIVE LAW – review of Administrative Appeals Tribunal decision – error of law – construction of Tribunal decision - whether Tribunal gave sufficient reasons

ESTOPPEL – where respondent filed a notice of contention - whether the Tribunal or the applicant is estopped from revoking a decision to pay the respondent worker’s compensation – where the applicant has by receiving compensation waived his common law rights to sue for non-economic loss – the Tribunal and applicant are not bound by an estoppel

Administrative Appeals Tribunal Act 1975 (Cth) s 43(1)

Safety, Rehabilitation and Compensation Act 1988 (Cth) s 62, s 62(1), s 62(5) s 62 s 24 s 27, s 45, s16(1)

Adelaide Stevedoring & Co Pty Ltd v Forst (1940) 64 CLR 538

Attorney-General (NSW) v Quin (1990) 179 CLR 1

Bramwell v Repatriation Commission (1998) 158 ALR 623

Brickworks Ltd v Council of the Shire of Warringah (1963) 108 CLR 568

Formosa v Secretary, Department of Social Security (1988) 46 FCR 117

Hu v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 63 Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259

Power v Comcare (1998) 89 FCR 514

Repatriation Commission v Crane [2004] FCAFC 86

TELSTRA CORPORATION LIMITED (ACN 051 775 556) v CHRISTOPHER JOHN MAHON

NSD556 OF 2004

BENNETT J

29 OCTOBER 2004

SYDNEY

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

THE COURT ORDERS THAT:

1.         The application be dismissed.

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

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

REASONS FOR JUDGMENT

1                     This is an appeal from the Administrative Appeals Tribunal (‘the Tribunal’).

The decision of the Tribunal

2                     It was agreed before the Tribunal and is agreed before me that the determination by a delegate of the applicant (‘Telstra’) of 23 May 2002 that was before the Tribunal consisted of two decisions, one valid and the other invalid.  The valid decision was a reconsideration by the delegate’s own motion under s 62(1) of the Safety, Rehabilitation and Compensation Act 1988 (Cth)(‘the SRC Act’) of a determination of 27 November 2001 (‘the November determination’) and substitution of a determination that Telstra was not liable to pay compensation in respect of ‘multiple soft tissue injuries to right knee, both forearms and lower back’.  The invalid step was to purport to revoke a reviewable decision of 10 April 2002.

3                     The Tribunal, it is agreed, correctly identified the matter before it as the valid review of the November determination.  That was the way that the matter proceeded before the Tribunal and before me.

4                     The November determination had approved ongoing weekly benefits to the respondent for the injury described as ‘multiple soft tissue injuries to right knee, both forearms and lower back’.  The reconsideration pursuant to s 62 of the SRC Act was in respect of the same subject matter.  The officer relevantly determined:

‘1.        That the determination dated 27 November 2001 and the reviewable decision dated 10 April 2002 are revoked pursuant to section 62(5) of the SRC Act;

2.                  I determine that the claimant no longer suffers from a right knee condition related to his previous employment with Telstra as a result of the incident on 21 January 1997.’

5                     The chronology is relevantly as follows:

·         The date of injury, the subject of the determination, was 21 January 1997 (‘the January injury’).

·         On 7 February 1997, a determination was made that Mr Mahon sustained a personal injury, namely multiple soft tissue injuries to his right knee, both forearms and low back  ‘for which Telstra… is liable to pay compensation’.

·         On 15 October 1998, there was a determination under s 24 and s 27 of the SRC Act as to whole body impairment. At this time, Mr Mahon was asked to make an election under s 45 of the SRC Act either to receive compensation for permanent impairment and non-economic loss or to institute an action or proceeding against the Commonwealth for any non-economic loss suffered as a result of the injury. Mr Mahon was asked to sign, and did sign, a form saying that he understood that this election was irrevocable.

·         On 27 November 2001, the November determination was made.

·         On 11 February 2002, a determination was made that, in accordance with the provisions of s 16(1) of the SRC Act, compensation was not payable to Mr Mahon in respect of total knee replacement.

·         On 5 March 2002, Mr Mahon requested a reconsideration of the determination of 11 February 2002.

·         On 10 April 2002, Telstra reconsidered the determination of 11 February 2002, pursuant to s 62(5) of the SRC Act, finding that Telstra was liable to pay compensation in respect of the total knee replacement.

·         On 23 May 2002, Telstra conducted a re-consideration pursuant to s 62 of the SRC Act.  The determination was that the November determination and the reviewable decision of 10 April 2002 were revoked pursuant to s 62(5) of the SRC Act.

6                     The question before the Tribunal was whether Mr Mahon was entitled to compensation under the SRC Act on the basis of continuing effects of ‘multiple soft tissue injuries to his right knee, both forearms and lower back’.  Mr Mahon’s claim was based upon the January injury when, in the course of his employment by Telstra, he was installing a co-axial cable on the roof of a two storey residence.  Mr Mahon was wearing a safety harness.  He lost his footing, fell backwards and slid down the roof, catching his right leg on a TV antenna.  Mr Mahon was suspended, in an awkward position, by his safety harness.  There was a dispute over the period during which Mr Mahon was suspended, with a number of medical practitioners taking histories of varying lengths of time from twenty minutes to one and half hours.  He did not fall to the ground.  He said that, in the process, he hurt his right leg and strained his arms while holding on to the safety harness.  He subsequently complained of pain in his right knee, both arms and his back.

7                     On the basis of medical reports, claims and representations submitted by Mr Mahon to Telstra, he was paid substantial compensation by way of weekly payments, rehabilitation payments, medical expenses and lump sum benefits for permanent impairment and non-economic loss.

8                     The Tribunal set out the facts surrounding the January injury and its findings in that regard.  The Tribunal then made a number of findings adverse to Mr Mahon, based in large part on the finding that Mr Mahon had not given to the examining medical practitioners a full and complete history of injuries previously suffered by him.  He was also found to have given a false history in respect of an alleged psychiatric disorder.  The Tribunal concluded that Mr Mahon had ‘deliberately set out to magnify’ the results of an earlier injury to his right knee while playing soccer.  The Tribunal was not convinced that Mr Mahon, as he subsequently claimed, injured his right knee at work in 1995 rather than while he was playing soccer.  The Tribunal did not accept his evidence in this regard.  In other words, the Tribunal did not accept that injuries to Mr Mahon’s right knee, prior to the January injury, were work-related.

9                     It cannot be said, as submitted by Telstra, that the Tribunal failed to consider the credibility of Mr Mahon.  It was because of its views on his credibility that the Tribunal rejected much of his evidence and claimed medical history.

10                  The Tribunal referred to the evidence of a number of medical practitioners, largely related to the claimed injury to the right knee.  In particular Dr Glase, who had treated and operated on Mr Mahon and whose evidence was accepted by the Tribunal, observed, as at 24 April 2001, that ‘the work related injury resulted in an exacerbation of the underlying degenerative change.  I feel that the bilateral carpal tunnel syndrome was the result of the work related injury.  Despite surgery he still has some ongoing mild symptoms…I would assess the permanent percentage impairment of his right lower limb at or above the knee due to the work-related injury at 10%’.

11                  The Tribunal also made specific reference to Dr Dalton’s evidence. Dr Dalton was a consultant in rehabilitation medicine to whom Mr Mahon was referred by Telstra.  Dr Dalton’s report of 22 July 2003 was in evidence.  Dr Dalton gave evidence, was ‘extensively cross-examined’ and remained unshaken.  As the Tribunal noted at [30], ‘He gave reasons why in his opinion the Applicant [Mr Mahon], as a result of the incident on 21 January 1997, suffered no more than an aggravation of the longstanding degenerative condition affecting his right knee’.  The Tribunal also set out Dr Dalton’s opinion regarding Mr Mahon’s back and contrary views expressed by other medical practitioners.

12                  As the conclusions of the Tribunal and the form of its reasons are a central issue in the appeal, it is appropriate to set them out:

‘34.      In assessing the contribution, if any, the work accident on 21 January 1997 made towards the Applicant’s current injuries, the remarks of Rich ACJ in Adelaide Stevedoring & Co Ltd v. Forst (1940) 64 CLR 538 at 564 are apposite namely that that there is a presumption that flows from the natural sequence of events.  Here, given the Applicant’s already damaged right knee, it is difficult, given the circumstances of the accident, not to accept that some additional damage was caused to that knee.  For that reason, I prefer the opinions of those medical practitioners who state that the events of 21 January 1997 did contribute to the current degenerative state of the Applicant's right knee.  Dr Glasse [sic], who had treated the Applicant and operated upon him, assessed the permanent percentage of impairment to the Applicant’s right knee due to the work accident at 10 per cent.  In other words, the work accident made a not insignificant contribution to his current condition: see Treloar v. Australian Telecommunications Commission 26 FCR (1990) 316 at 323, after stating “All that is required is that the relevant aspects of the employment add their measure to the creation of the condition, its aggravation or acceleration. They must in truth, be part of the cause. If they are not, then they do not ‘contribute’”.  The Court then went on to say,“the causal connection must be established on the probabilities and not left in the area of possibility or conjecture.  Once the link is established, however, it matters not that the contribution be large or small.”

35.       I am also convinced that the only explanation for the injury to the Applicant’s wrists and forearms is a result of the events of 21 January 1997, in particular, his being required to hold onto a safety rope.  Where opinions differ, I prefer the opinions of Dr Hagan and more particularly Neurologist Dr Heard, who in their reports to the Respondent clearly regarded the work accident as the cause of the Applicant's injury.

36.       On the other hand, given the explanation of the mechanism of injury by Dr Dalton, I accept his opinion that the actual fall experienced by the Applicant on 21 January 1997 was insufficient to explain his current symptoms.  In particular, I note that the Applicant was able to return to work almost immediately afterwards and was still able to play soccer.  Other reports, for example Dr Hagan, have referred to pre-existing constitutional degeneration and the Applicant may have suffered some temporary flare-up of symptoms as opposed to aggravation of the underlying condition.

37.       The decision under review is therefore [sic] set aside and there is substituted in lieu thereof the Tribunal’s decision that the Applicant is entitled to the payment of compensation pursuant to the Safety, Rehabilitation and Compensation Act 1988 for the injuries described as injury to the right knee and ischaemic damage to the median nerve of both forearms.  The Respondent is to pay the Applicant’s costs.’

13                  Telstra claims that the Tribunal erred in law by giving no reasons or insufficient reasons for its decision. Telstra is not seeking any repayment for past compensation.

Did the Tribunal fail to consider the false and misleading history given to the medical practitioners other than Dr Dalton?

14                  Telstra submits that the Tribunal’s conclusion is infected by its reliance on the opinion of medical practitioners who had been given a false history and that the Tribunal failed to take into account that false history.

15                  The applicant emphasised the fact that the medical experts had based their opinions on a medical history shown to be materially false so that, it was submitted, there was no properly informed medical opinion which supported Mr Mahon’s case.  In finding for Mr Mahon, it is said, the Tribunal fell into an error of law.  Mr Watson SC who appeared with Mr Kelly for Telstra referred extensively to the detail of various medical reports submitted by Mr Mahon to Telstra to justify his claim, for which he had received substantial lump sum compensation.  It was submitted that the ‘true story’, as it emerged at the hearing before the Tribunal, was completely different to that which had been put forward by Mr Mahon, particularly in respect of long standing, serious pre-existing right knee problems and back problems not caused by any work-related injury.  A claim for psychiatric injury allegedly suffered after the incident of 1997 had been abandoned.

16                  Counsel for Telstra pointed, in some detail, to the inconsistencies and what were said to be ‘a succession of falsehoods and false answers’ in Mr Mahon’s evidence before the Tribunal and in his responses to the medical experts.  The latter were relied upon by Telstra to support a submission that the medical experts’ opinion, other than that of Dr Dalton, was based on a false medical history.

17                  Dr Dalton was given a full history and was given access to all of the medical records.  Dr Dalton gave evidence by report dated 22 July 2003 and orally.  In light of all of the facts Dr Dalton’s opinion was:

(a)        in relation to the knee – the fall in January 1997 was ‘little more than an aggravation of a longstanding degenerative condition affecting his right knee at the time of the fall’;

(b)        in relation to the arms – this was a muscular strain only; and

(c)        in relation to the back – the accident caused a ‘mild lumbar strain’ but ‘the effects of that injury have long since ceased’.

18                  At the hearing, Mr Watson for Telstra submitted that the findings of the Tribunal recognised the problems for Mr Mahon in respect of his credit and credibility.  Indeed, Mr Watson referred to the express findings by the Tribunal that Mr Mahon was ‘a poor historian’ and that there were ‘discrepancies in the history’; that Mr Mahon had ‘not given any of [the medical practitioners who had examined him] a full and complete history of the injuries suffered by him’; that there was ‘a failure to disclose’ crucial parts of the medical history; that Mr Mahon ‘has deliberately set out to magnify the results of the events of 21 January 1997’; that the Tribunal did ‘not accept this evidence’ that a 1995 accident was work-related;  that the history of the earlier back injury was ‘not disclosed to examining medical practitioners’ and that the history given to a psychiatrist was ‘quite false’.

19                  The Tribunal did not fail to consider the false history given to the medical practitioners.  To the contrary, it considered that aspect and made findings on credibility adverse to Mr Mahon.

Were reasons given for the finding of entitlement to compensation for injury to the right knee?

20                  Telstra’s complaint is that it lost the case before the Tribunal, despite the Tribunal making a number of findings against Mr Mahon.  The submission is that, having made these findings, the Tribunal had no alternative but to reject all aspects of Mr Mahon’s claim.  Instead, the Tribunal came to the conclusion that Mr Mahon was entitled to compensation under the SRC Act.  It is submitted that the Tribunal gave no reasons to explain that conclusion.

21                  In my opinion, that is not the case.  The Tribunal clearly rejected Mr Mahon’s version of earlier work-related injuries which were exacerbated by the January injury.  That is, the Tribunal accepted that a false history had been given.  It did accept, however, at [34] that, irrespective of the cause of the pre-existing problems with the right knee, these problems had been aggravated by the work-related injury and that the percentage of impairment due to the January injury was 10 per cent.  In coming to this conclusion, the Tribunal relied on Dr Dalton’s evidence and the conclusions of other medical practitioners which were consistent with those of Dr Dalton or whose opinion the Tribunal accepted.  The Tribunal was entitled to make those findings of fact on the evidence before it.  In accepting such opinion the Tribunal was evidently aware of the history given, as set out in the Tribunal’s reasons.  

22                 The Tribunal then turned at [35] to the claimed injury to the wrists and forearms.  It accepted the evidence of those neurologists who regarded the work accident as the cause of injury.  No error of law is apparent in this finding. 

23                  Telstra’s submissions focussed on paragraphs [36] and [37] of the Tribunal’s decision.

24                  It is here that the parties are most in issue.  Telstra contends that [36] is part of the Tribunal’s consideration of the right knee.  In [36], the Tribunal found that the January injury was insufficient to explain Mr Mahon’s “current symptoms”.  On the basis that this finding was about the right knee, the Tribunal, it is said, failed to give reasons for its conclusion that Mr Mahon was entitled to payment in respect to that knee.  A failure to give reasons would be an error of law. It is true that in [36] the Tribunal does not expressly mention any injury to Mr Mahon’s back.  It does not refer to any part of the body.

25                  The submission by Mr Edward is relatively straightforward: [36] was dealing with the back injury, the third aspect of the claim even though there is no specific reference to the back in that paragraph.  The Tribunal had already dealt with the right knee (in favour of Mr Mahon) and the arms (in favour of Mr Mahon) and then dealt with the third claimed impairment, the back, as to which Mr Mahon was unsuccessful.  This, it is submitted, explains why in [37] the Tribunal decided that there should be payment of compensation only for the knee and the arms.

26                  I accept that at [36] the Tribunal was dealing with the claim for the back.  The Tribunal was clearly aware that the back was in issue and dealt with medical reports on that subject.  The structure of the judgment is that the Tribunal first dealt with the evidence and then turned to its conclusion.  Paragraph [34] dealt explicitly with the knee and [35] dealt with the arms.  The choice with respect to [36] is that the Tribunal returned to a further consideration of the knee or that it addressed the remaining issue of the back.  If the reasons are read so as to deal with the knee (10 per cent impairment due to the work accident), arms (caused by the work accident) and back (work accident insufficient to explain the current symptoms), each of the claims is dealt with and there is consistency with the decision in [37] as to entitlement to compensation (knee and arms only).  It is hard to see why the Tribunal would deal with the knee, then the arms, then return to the subject of the knee and ignore the complaints about the back.  It is more likely that the Tribunal then turned to deal with the back.

27                  I am faced with two alternative constructions of the Tribunal decision.  The first is that the decision is, by reason of [34] and [36], internally inconsistent and that, assuming that both paragraphs are dealing with Mr Mahon’s right knee, and that the conclusion by the Tribunal at [37] is made without reasons.  The second is that the Tribunal was dealing with three matters: the right knee, the wrists and forearms and the back.  It dealt with them sequentially: the right knee [34], the wrists and forearms [35] and the back [36].  The conclusion at [37] is then consistent with the conclusions in those paragraphs and reasons have been given for those findings.

28                  Courts should not over-scrutinise Tribunal decisions.  In (Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 (‘Wu Shan Liang’), Brennan CJ, Toohey, McHugh and Gummow JJ said at 279:

‘. the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. (See McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609 at 616).´

See also,Repatriation Commission v Crane [2004] FCAFC 86; Hu v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 63 at [89]: ‘the delegate´s reasons must be given a beneficial construction’. The form of the Tribunal’s reasons lends itself easily to Mr Edward’s interpretation. It is apparent to me that the second construction of the Tribunal’s decision is sensible, clear and preferable.  Accordingly, there is no error of law.

The application of the principle in Forst

29                  A further ground relied upon by Telstra is that the Tribunal wrongly applied Adelaide Stevedoring & Co Pty Ltd v Forst (1940) 64 CLR 538 (‘Forst’) in applying ‘a presumption that flows from the natural sequence of events’ to find that ‘given [Mr Mahon’s] already damaged right knee, it is difficult, given the circumstances of the accident, not to accept that some additional damage was caused to that knee’.

30                  Mr Watson submits that Forst is only consistent with a proposition that, where medical science cannot supply an answer, a Court could adopt a view on causation arising from the presumption. The respondent submits that the High Court acknowledged in Forst that, if medicine did provide an answer, the presumption would be displaced.  Further, it is submitted, the Tribunal substituted that inference for contrary medical evidence.  The respondent points to the rationale approved by Rich ACJ in Forst (at 563) which the Tribunal was entitled to adopt and apply namely ‘a course of reasoning which combined common sense with the application of logic to physiological facts to infer “on the preponderance of probabilities”…’.

31                  Mr Watson’s submissions on Forst seem to be based on the premise that there was no medical evidence that justified a conclusion of aggravated damage.  He submitted that the presumption referred to in Forst can only be applied in the absence of a reason supplied by medical evidence. It was submitted that a lay presumption cannot apply when medical and scientific reasoning offers another explanation.  In support of the submission that the application of Forst was an error of law, Mr Watson points to [36] of the Tribunal’s reasons where the Tribunal accepted medical evidence that the fall on 21 January 1997 ‘was insufficient to explain [Mr Mahon’s] current symptoms’.  The proposed error of law is, therefore, based on the assumption that [36] is referring to the right knee and that the medical evidence referred to in that paragraph is the totality of the evidence on that subject.  In paragraph [34], where the subject of consideration is clearly the right knee and where Forst is referred to, the presumption applied is consistent with the medical evidence that the January injury did contribute to the current degenerative state of Mr Mahon’s right knee.  As I am of the view that, on a proper reading of the decision, the Tribunal was not referring to the right knee in [36] but was referring to it in [34], medical evidence and the lay presumption of Forst coincided.

32                  In its decision, the Tribunal was faced with competing medical opinions as to whether the January injury contributed to the current degenerative state of Mr Mahon’s right knee.  As a finding of fact, it accepted one set of opinions.  It gave, as a reason for its finding of fact, that the medical opinion which it accepted accorded with a presumption that some additional damage was caused by the events of 21 January 1997.  There was evidence that, at or about the time of the injury, Mr Mahon’s right knee was degenerative, irrespective of the reason for that pre-injury state and the Tribunal was entitled to accept that evidence.  In my opinion, there was no error of law demonstrated in that conclusion, nor was Forst misapplied.  Medicine did not displace the presumption; medical opinion was divided but there was medical opinion consistent with the presumption that the Tribunal was entitled to accept for the reason that it gave.  There was no error of law.

Did the Tribunal err in failing to find a percentage of permanent impairment due to the January injury?

33                  The Tribunal found that Mr Mahon’s claimed history, alleging prior work-related injury to his knee, was incorrect and that Mr Mahon was not a credible witness.  On a proper reading of the Tribunal decision, the Senior Member found that, irrespective of the cause of the pre-existing injury to the right knee, the injury of 21 January 1997 aggravated the problems with that knee.  So much was accepted by Mr Watson.  The next question was whether the Tribunal failed to make a finding as to whether the additional damage caused was permanent and, if it was permanent, what was the percentage of permanent impairment attributable to the January injury.

34                  The Tribunal accepted the opinion of Dr Glase that Mr Mahon suffered a permanent percentage of impairment to his right knee at 10 per cent.  The Tribunal accepted that Mr Mahon had not given a correct history with respect to his right knee but accepted that the January work-related injury aggravated the pre-existing injury whatever the cause of that pre-existing injury.  Despite the fact that Dr Glase did not have a correct history, the Tribunal accepted Dr Glase’s assessment of ‘permanent percentage impairment… due to the work accident at 10%’ (emphasis added).  I cannot see how that objective assessment of the degree of current impairment attributable to the accepted work-related injury is infected by the incorrect history given to that doctor.  The incorrect history related mainly to Mr Mahon’s pre-existing injury. The question was the condition of the knee as at the date of the work-related injury.  The Tribunal was clearly alive to the credit issues surrounding Mr Mahon’s medical history and accepted Dr Glase’s opinion on the matter of percentage impairment.  It was a finding of fact which was open to the Tribunal, and for which reasons were given.  No error of law has been established.

Notice of contention

35                  The respondent filed a notice of contention.  As relied upon at the hearing, the issues that were raised were whether the Tribunal erred in considering for review the question of injuries to Mr Mahon’s arms and back and whether Telstra and the Tribunal were estoppel from a reconsideration of Mr Mahon’s injury after he had made an election pursuant to s 44 and s 45 of the SRC Act.

Was the Tribunal entitled to consider the effect on Mr Mahon’s forearms and lower back?

36                  Despite the way in which the matter proceeded before the Tribunal, an issue was raised by Mr Edwards of counsel who appeared for Mr Mahon as to whether the Tribunal was entitled to consider the effect on Mr Mahon’s arms or back or whether it was, by reason of the form of the revocation of the November determination, restricted to the question of the right knee.  This is not properly the subject of a notice of contention as it seeks different orders than those made by the Tribunal. However, given that the respondent did not seek to file a notice of cross- appeal, I will treat it as a notice of contention which seeks merely to contend that a matter was decided erroneously against the respondent but does not seek orders discharging or varying the Tribunal’s decision.

37                  In any event, upon analysis, it is apparent that the November determination dealt with the forearms and lower back as well as the right knee.  Accordingly, the revocation of the November determination by paragraph 1 of the reconsideration, the subject of the appeal to the Tribunal as set out in [4] herein, was in respect of all three conditions.  Mr Edwards relied upon paragraph 2 to limit paragraph 1 in some way.  However, he conceded that, if paragraph 1 stood alone, the Tribunal would be entitled to address all three conditions.  In my opinion the additional comment about the right knee in paragraph 2 does not affect the subject matter of the reconsideration.  The Tribunal was entitled to address the right knee, the forearms and the lower back.

Estoppel by conduct

38                  Mr Edwards submitted that, once a finding of permanent impairment has been made under s 24 of the SRC Act, by reason of the irrevocable election by Mr Mahon to accept the offer of payment under s45 of the SRC Act which precludes the taking of a common law action, Telstra is estopped from reconsidering the permanent impairment.

39                  It is not clear whether this matter was canvassed before the Tribunal or not.  If it was, it was dismissed by the Senior Member without detailed consideration.

40                  By reason of s 44 of the SRC Act, subject to s 45, an action or other proceeding for damages does not lie in respect of the January injury.  There is no right to bring a common law action, subject to the exception in s 45 which provides for a limited right to claim damages for non-economic loss.  Section 45 gave to Mr Mahon an election to commence proceedings for non-economic loss prior to payment of compensation.  That election is irrevocable and compensation by lump sum payment would then not have been payable under s24 of the SRC Act in respect of the January injury.  The failure to make such an election may, logically, be for a number of reasons and it does not necessarily result in detriment.  By letter of 15 October 1998 (‘the letter’) Telstra notified Mr Mahon of the amount of the lump sum payable.  Mr Mahon then made an election.  There is no evidence of detriment or of the reason for the election. 

41                  In the letter, Telstra stated the amount calculated as his entitlement by lump sum payment for permanent impairment and non-economic loss.  The letter also referred to s 45 of the SRC Act and the election to be made by him.  An accompanying form provided, in blank, for two alternatives: to receive compensation under the SRC Act or to institute an action for non-economic loss.  It also referred to the fact that the election was irrevocable.  There was provision for Mr Mahon’s signature.  That signed form was returned to Telstra by Mr Mahon’s solicitors.  The election was to receive compensation under the SRC Act.

42                  Mr Edwards characterises this process as a representation by Telstra that it accepts the January injury and that it accepts Mr Mahon’s permanent impairment as set out in the determination accompanying the letter.  By electing to accept the payment and forego his right to commence an action for non-economic loss, it is said that Mr Mahon relied upon that representation to his detriment so that Telstra is estopped from reconsidering either the January injury or the fact of or degree of permanent impairment.

43                  Mr Watson submits that the letter, in blank form, referring to two alternatives and an election to be made, does not constitute a representation.  He also points out that there is no evidence to support inducement or any reliance or, indeed, detriment and that there are many possible reasons for the election made.

44                  Section 62 of the SRC Act provides for an unfettered discretion on the part of Telstra to reconsider a determination made by it.  Mr Edwards concedes that such a statutory discretion enables reconsideration but submits that common law estoppel can override s 62 of the SRC Act.  Mr Watson submits to the contrary. 

45                  Section 62 of the SRC Act provides that a determining authority (Telstra) may, on its own motion, reconsider a determination made by it or cause such a determination to be reconsidered.  That determination may result in a decision affirming or revoking the determination or varying it in such a manner as the person making the determination thinks fit.  In Brickworks Ltd v Council of the Shire of Warringah (1963) 108 CLR 568 at 577, Windeyer J said that estoppel by representation cannot prevent the performance of a statutory duty or the exercise of statutory discretion (see also, Attorney-General (NSW) v Quin (1990) 179 CLR 1 at 18. The operation of an estoppel ‘may cut across the proper exercise of the discretion reposed by legislation in a specified decision-maker and thus be at odds with what is mandated by the legislation’ (Formosa v Secretary, Department of Social Security (1988) 46 FCR 117 at 125 per Davies and Gummow JJ). There may be an element of ambiguity in this remark (see, for example: Bramwell v Repatriation Commission (1998) 158 ALR 623 per Weinberg J at 636).

46                  Mr Edwards submits that, despite s 62 of the SRC Act, Telstra cannot reconsider the injury or the permanent incapacity arising from the injury because of the lump sum determination made in accordance s 24 and the irrevocable election made by Mr Mahon to give away a common law action for non-economic loss.  Mr Edwards argues that, otherwise, s 62 authorises reconsideration of any issue, including the injury and the permanent nature of any impairment.  Mr Edwards concedes that, if the statutory scheme is discretionary, estoppel cannot operate as asserted.  Mr Edwards seeks to distinguish the principle described in Formosa, which he contended is authority for the proposition that estoppel is not available in respect of the exercise of a discretionary power, on the basis that, here, the power is not discretionary but determinative (see Formosa at 125).

47                  In this case, the reconsideration by the determining authority was on its own motion.  Section 62(1) of the SRC Act provides:

‘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.’

In my view, the power given to the determining authority by s 62, the power to reconsider, is discretionary.  The reasoning in Formosa, as advanced by Mr Edwards, applies.

48                  Even if estoppel were available and the letter did constitute a representation that Telstra irrevocably accepted Mr Mahon’s entitlement to payment for whole person impairment which I doubt, evidence would be necessary of reliance in the making of an election and consequential detriment. There was no such evidence. It is by no means clear that the election has in fact resulted in detriment.

49                  Further, the matter referred to the Tribunal was the November determination, made under s 62 of the SRC Act.  That determination dealt with each of the three claimed medical conditions.  That was the reviewable decision for the purposes of s 43(1) of the Administrative Appeals Tribunal Act 1975 (Cth).  The Tribunal was then able to exercise all the powers and discretions that are conferred by the relevant enactment on the person who made the decision.  Sackville J observed in Power v Comcare (1998) 89 FCR 514 at 526 that the reconsideration decision-maker, for the purposes of s 62 of the SRC Act, had the power to consider whether the condition for which it was claimed there was a continuing liability on the part of the respondent to compensate the applicant, had ever been causally related to his work.  The reconsideration decision-maker was not bound by any issue estoppel arising from an earlier determination and the Tribunal was in a similar position.  That reasoning applies in this case.

50                  For the above reasons, I do not accept that Telstra or the Tribunal were bound by an estoppel from reconsidering the question of permanent impairment resulting from the January injury.

Conclusion

51                  The applicant has not demonstrated an error of law of the part of the Tribunal.  The respondent has not established the grounds of the notice of contention.  It follows that the application is dismissed.  I have dealt with the assertions and claims set out in the notice of contention. As stated above, while in substance the respondent’s notice of contention appeared to seek particular orders, and was in this way more akin to a cross-appeal, it has not been filed as a cross-appeal. Accordingly, it is unnecessary for me to make any orders in respect of it. I will hear the parties as to costs.

Associate:

Dated:              29 October 2004