FEDERAL COURT OF AUSTRALIA

Comcare v Holt [2007] FCA 405

WORKERS’ COMPENSATION – Commonwealth Government Employees’ Compensation – appeal from Administrative Appeals Tribunal – whether costs of therapeutic treatment reasonable in circumstances

Safety Rehabilitation and Compensation Act 1988 (Cth) s 16(1)

Administrative Appeals Tribunal Act 1975 (Cth)

Comcare v Rope (2004) 135 FCR 443 applied

Bashar v Comcare (2002) 69 ALD 784 cited

Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 cited

McDonald v Director-General of Social Security (1984) 1 FCR 354 cited

Comcare v Nichols [1999] FCA 209 cited

COMCARE v ASHLEY CRAIG HOLT

NTD 1 OF 2007

MANSFIELD J

22 MARCH 2007

DARWIN (BY VIDEO LINK)

THE COURT ORDERS THAT:

1.                  The appeal be dismissed.

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

REASONS FOR JUDGMENT

INTRODUCTION

1                     Ashley Holt was previously employed in a Commonwealth agency.  He lives in Alice Springs.  He suffered a compensable injury in the course of his employment on 17 September 2002.  Comcare on behalf of the Commonwealth has paid compensation to him under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) since that time.  Mr Holt’s injury was described as “generalised anxiety disorder and adjustment reaction with brief depressive reaction”.  Mr Holt has been treated for the condition by a general practitioner, Dr Zerk, for some time. 

2                     In August 2005, Dr Zerk requested the approval of Comcare for Mr Holt to attend a Buddhist meditation retreat at the Chenrezig Institute in Queensland (the retreat) as part of his treatment for his injury.  That involved a cost of a little over $1000 for food and accommodation, and air fares of almost $600 to enable Mr Holt to travel between his home in Alice Springs and Brisbane, near where the retreat was to take place. 

3                     Comcare, by its delegate, decided on 22 August 2005 that Comcare would not pay for the attendance at the retreat or the expenses of the retreat, because the retreat did not constitute “therapeutic treatment” as defined in the SRC Act.  That decision was confirmed on internal review.  Mr Holt challenged that decision in the Administrative Appeals Tribunal (the AAT).

4                     However, before the AAT it was accepted that the retreat did constitute “therapeutic treatment”.  The sole issue before the AAT was whether the retreat was treatment “that is reasonable for the employee to obtain in the circumstances”.  The AAT on 8 December 2006 set aside the decision of Comcare of 22 August 2005, and substituted a decision that Comcare is liable to pay compensation to Mr Holt under s 16 of the SRC Act for his reasonable costs of attendance for, and at, the retreat. 

5                     Comcare appeals under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) from that decision of the AAT.  This appeal concerns the proper construction and application of the words in s 16(1) of the SRC Act describing when Comcare must pay medical treatment in respect of a compensable injury.

THE LEGISLATION

6                     Section 14(1) of the SRC Act makes Comcare liable to pay compensation in accordance with the SRC Act in respect of an injury suffered by an employee which results in death, incapacity for work or an impairment.  Section 4(1) defines “injury” to include a disease suffered by an employee, and “disease” is also defined in s 4(1) to include any ailment suffered by an employee or an aggravation of such an ailment, provided that the ailment or its aggravation was contributed to in a material degree by the employment by the Commonwealth.

7                     The provisions relevant to this particular matter commence with s 16(1) of the SRC Act.  It provides:

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.

This appeal turns upon whether it was reasonable for Mr Holt to undertake the retreat in the circumstances.

8                     The term “medical treatment” is defined in s 4(1) of the Act to include:

“therapeutic treatment obtained at the direction of a legally qualified medical practitioner”.

The term “therapeutic treatment” is also defined in s 4(1) to include:

“an examination, test or analysis done for the purpose of diagnosing, or treatment given for the purpose of alleviating, an injury.”

As noted, it was accepted before the AAT that the retreat was treatment given for the purpose of alleviating Mr Holt’s injury.

9                     Section 16(6) provides that Comcare is liable to pay compensation to an employee where compensation is payable in respect of the cost of medical treatment and the

employee reasonably incurs expenditure in … making a necessary journey for the purpose of obtaining that medical treatment [and/or] remaining, for the purpose of obtaining that medical treatment, at a place to which the employee has made a journey for that purpose.

If, as the AAT found, the retreat was reasonable to be undertaken in the circumstances, Comcare does not separately contend that the travel costs were themselves unreasonable.  Correctly, in my view, both Comcare and Mr Holt regarded the overall cost of the retreat and the travel to it as matters relevant to the reasonableness of the retreat as treatment in the circumstances.  The amount of compensation payable is fixed by s 16(6)(c) and (d).  Section 16(7) limits the circumstances in which Comcare is liable to pay compensation by reference to the length of the journey and the consequences of the employee’s injury.  Nothing turns upon those latter mentioned provisions in this matter.

THE AAT DECISION

10                  Mr Holt is a practising Buddhist, and has been engaged in meditation for some 30 years and has attended about 40 meditation training sessions over the years.  He has previously had similar treatment to the retreat, that is therapeutic meditation sessions, paid for by Comcare in November 2002, September 2003, March 2004, November 2004 and April 2005.  He meditates on a daily basis and has a room at his home generally available for that purpose.  He claimed that attendance at the retreat had in the past provided him with the opportunity to practise intensively in a supportive environment, and that the benefit of such a retreat can last upwards of 11 months.  He also claimed that his stress levels build up as time elapses from the retreat, and that he loses focus and quality of life over that period.  He said that it is the supportive environment of the retreat that makes the difference.  The AAT accepted his evidence.

11                  The AAT also noted that his treating practitioner, Dr Zerk, regarded the attendance at the retreat as having a therapeutic benefit for him.  It referred to comments Dr Zerk had made to that effect in May 2005, and August 2005 including, in respect of the present application, that:

Mr Holt is getting benefits from these treatments … I note that in particular after attending Buddhist retreats, Mr Holt comes back refreshed, relaxed, less stressed and ‘bogged down’ with the problems relating to his claim, and ready to find employment.  The benefit gained from this is clear, but difficult to sustain unless he can see a brighter future.

12                  The Tribunal then described the argument for Comcare as being that the treatment was not treatment that was reasonable in the circumstances.  There were two reasons put forward for that:

(1)               that Mr Holt could in effect replicate the retreat in his own home; and

(2)               that there were other forms of meditation treatment available in Alice Springs.

The Tribunal did not accept either of those arguments, as it said, because “there is an inadequate evidential foundation for them or either of them”.  It explained that conclusion.

13                  Comcare, as to the first argument, pointed to the fact that Mr Holt had already attended five similar retreats, his extensive experience in meditation, his contacts with leaders at the Chenrezig Institute who could advise him at home and his home facilities including a supportive partner and a room dedicated to enabling him to undertake meditation. 

14                  The AAT described those contentions as having “a superficial appeal”.  It concluded that the argument overlooked the fact that there is evidence of demonstrated therapeutic benefit in attendance at the Chenrezig Institute for the retreat.  It noted that there was no evidence to suggest that a similar, or any other, benefit would flow from Mr Holt seeking to replicate the treatment in his own home.  The evidence before the AAT had included a report from another doctor touching on that issue, but Comcare did not rely upon that evidence before the AAT for that purpose.  It therefore concluded that the “home meditation” alternative propounded by Comcare did not provide a therapeutic benefit that is comparable with attendance at the Chenrezig Institute.

15                  That was a decision of fact available to the AAT on the evidence, and indeed counsel for Comcare properly acknowledged that it could not be challenged on this appeal.

16                  As to the alternative argument, the only evidence was an extract from an internet search of the Australian Buddhist Directory which indicated that there is a Buddhist Society of the Northern Territory.  It said that intensive meditation sessions (retreats) are organised on a monthly basis and that that Society tries to arrange visits within the Territory, including to Alice Springs.  Comcare argued that, having sent that information to Mr Holt’s solicitors, Mr Holt was obliged to investigate the possibilities of undertaking a retreat through that body.

17                  The Tribunal did not accept that argument.  It said:

There is no concept of persuasive onus in proceedings in this Tribunal but there is certainly an evidentiary onus upon a party who wishes to argue that one treatment option is unreasonable when compared to another to properly evidence the suggested alternative.  I do not consider the passage I have set out [the information referred to] to provide a sound evidentiary foundation from which I could conclude that the Northern Territory Buddhist Society offers a more reasonable alternative treatment that would assist the applicant with his accepted condition.

18                  Having rejected those two arguments of Comcare, the Tribunal continued:

Against a background where the medical evidence is that attendance at the retreat in the past has a demonstrated therapeutic benefit, where prior attendances have been funded by the respondent and where no equally efficacious alternative at a lower cost is suggested, I conclude that attendance by the applicant at the Buddhist retreat does amount to medical treatment that it was reasonable for the applicant to obtain.

19                  Comcare placed particular emphasis upon the concluding remarks of the AAT, after it had formally set aside the decision of Comcare and substituted the decision that Comcare is liable to pay the reasonable costs of Mr Holt’s attendance at the retreat.  That passage is as follows:

I should add, against the possibility that this might be thought to open the floodgates, that I regard this decision as turning very much upon its own facts and, in particular, evidentiary deficits.  As it seems to me if the respondent wishes to argue that a particular treatment is unreasonable, there is an obligation upon it to demonstrate an alternative that has equivalent therapeutic benefit but at a lower cost.  That, in my view, was not done here.

THE CONTENTIONS

20                  There were three arguments advanced by Comcare on the appeal.  They were:

(1)               The AAT had not applied the principles discussed by Stone J in Comcare v Rope (2004) 135 FCR 443 at 448, at [17], and in particular that it did not consider the prospective benefits of the proposed treatment against its prospective costs, that is that it did not weigh the benefit of the retreat against the cost of obtaining it.  It was said that the AAT erred by proceeding on the basis that in the absence of a cheaper alternative, the treatment was reasonable, because it failed to consider whether the cost of the proposed treatment was reasonable in the circumstances.  That was said to be a failure to take material facts into account and to examine them in relation to a matter the Tribunal had to determine so as to amount to an error of law.

(2)               The AAT took into account irrelevant considerations, namely that Comcare had previously funded such medical treatment, and secondly that Comcare had an obligation upon it to demonstrate an alternative medical treatment that has equivalent therapeutic benefit but at a lower cost.

(3)               The AAT failed to comply with the obligation imposed by s 43(2) of the AAT Act and failed to deal with a submission seriously advanced by Comcare, relevant to the issue before the Tribunal and worthy of consideration, namely that any benefit Mr Holt obtained from the medical treatment was outweighed by the cost of treatment.  As to the third argument, Comcare’s statement of facts and contentions before the AAT included the proposition that any benefit to Mr Holt from attending the retreat was outweighed by the cost of obtaining the treatment (as the AAT noted about $1650).  It was contended that Comcare’s contention in that regard was not addressed in the AAT’s reasons at all.

CONSIDERATION

21                  Counsel for the parties were agreed on the principles to be applied in determining whether the proposed treatment was reasonable for Mr Holt to obtain in the circumstances.  In Rope 135 FCR at 448, at [17], Stone J said:

I accept, however, that the reference in s 16(1) to treatment being ‘reasonable to obtain in the circumstances’ is a clear indication that, in this case, the Tribunal was required to engage in a costs/benefit analysis in relation to PNI treatment.  The Tribunal needed, among other things, to weigh the benefit of PNI treatment against the cost of obtaining it (given that the treatment was available only in Townsville), taking into account any other treatment available to Mrs Rope.

22                  In that case, the employee had suffered a compensatable injury and had received psychoneuroimmunology (PNI) treatment from a psychotherapist in Canberra.  The psychotherapist had subsequently moved her practice to Townsville and the issue was whether the employee was entitled to recover from Comcare the costs of her travel to Townsville to continue her PNI treatment.  There was no equivalent treatment available in Canberra.  The AAT determined that it was reasonable for that employee to obtain PNI treatment and be reimbursed for the cost of travelling to Townsville to obtain it.  Justice Stone found no error of law on the part of the AAT in making that decision.

23                  Coincidentally, in that case, the argument of Comcare significantly resembles its argument in this matter.  It was argued that the AAT had failed to engage in a costs/benefit analysis in determining that it was reasonable for that employee to obtain PNI treatment in Townsville.  Justice Stone concluded that the findings of the Tribunal were open to it on the evidence and provided no basis for the Court to interfere with those findings.  Her Honour said, after accepting that there was predominant medical opinion that the proposed PNI treatment had therapeutic value for that employee because it assisted her in managing the pain of her injury and improved her quality of life, at 448, at [19]:

the only additional factor to be considered was whether there was any equivalent treatment available in Canberra.  The Tribunal stated that Comcare had ‘failed to substantiate its assertion that equivalent treatment to that provided to [the employee] is available in Canberra’.  I am satisfied that the Tribunal did consider all the circumstances that, under s 16(1), it was required to consider in determining if it was reasonable for [the employee] to obtain PNI treatment.  The findings that the Tribunal made were open to it on the evidence.  It is not for this Court to interfere with those findings.

24                  The first contention is based upon the observations of the AAT set out in [19] above. 

25                  I agree that it would have been erroneous for the AAT generally to declare that the therapeutic treatment is unreasonable only if Comcare establishes that there is alternative treatment with equivalent therapeutic benefit available at a lower cost.  There may be circumstances where treatment is unreasonable because its anticipated therapeutic benefit does not justify the expense involved in the circumstances.  Section 16(1) of the SRC Act does not indicate that a proposed treatment is reasonable unless alternative treatment of more or less equivalent therapeutic benefit and at a lesser cost is shown by Comcare to be available.  That is consistent with the approach of Stone J in Rope 135 FCR 443.  Of course, it will be common for the reasonableness of proposed medical treatment to be assessed in the light of alternative treatment options, but that is not necessarily so.  There might be cases where the cost of the proposed treatment, even if no other treatment options were available, would lead to the view that the proposed treatment is unreasonable having regard to its anticipated benefit.  Such a circumstance is, of course, likely to be uncommon if only because treating medical practitioners generally act responsibly and with sound medical judgment.

26                  It is plain enough that sometimes proposed therapeutic treatment will be unreasonable because there is some alternative treatment available with potentially similar benefits at a lesser cost.  There may be a balancing involved where the potential therapeutic benefits are less, but the cost is significantly less.  The extent to which such treatment has been undertaken in the past and the degree of its success may also be relevant.  There may be cases, as Comcare points out, where proposed treatment, although of therapeutic benefit, is unreasonable having regard to the extent of the anticipated benefit of the cost involved, even if no similar treatment had previously been undertaken.  There may be cases, also as Comcare points out, where treatment like the proposed treatment which in the past has had some therapeutic benefit may no longer be reasonable because the extent of the therapeutic benefit no longer justifies the cost in the light of past experience:  see e.g. Bashar v Comcare (2002) 69 ALD 784.  There may be other illustrations of facts relevant to the determination of reasonableness of proposed medical treatment.

27                  However, in my view, the remarks of the AAT complained of must be seen in the context of the particular case.  The context of the case, as explained above in [12] is that Comcare claimed that the treatment was not reasonable in the circumstances for two specific reasons, namely the availability of alternative treatment with potentially similar therapeutic benefits and at a much lesser cost either at home, or otherwise in Alice Springs.  That was the primary case which the AAT was called upon to address and it did so.  In my view its comments in the passage of concern to Comcare must be read in that context.  If they were to be read as supporting the general proposition set out at the concluding part of its reasons.  I would agree that the AAT had fallen into error.

28                  In my judgment, the AAT also did not fall into error in the manner asserted in the second ground of appeal.  The AAT referred to the fact that Comcare had previously funded the retreat or a similar retreat.  It did not suggest that, for that reason, any further retreats are necessarily to be regarded as reasonable.  It would have been erroneous to have taken that step.  It referred to those facts simply to record that, in the past, there had been therapeutic benefit experienced from such retreats.  If there had not been, the case for the retreat being reasonable would have been much weaker.  In my view, where proposed treatment is the same or similar to that previously performed, the extent to which the previous treatment had generated therapeutic benefit is relevant to determining the reasonableness of the proposed further treatment.  I think that is all that the Tribunal did when it referred to Comcare having previously funded similar retreats, namely to take account of the fact of previous similar retreats and the extent to which in the past such retreats had produced therapeutic benefit: see generally Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272.

29                  The observation that Comcare had not demonstrated an alternative medical treatment with equivalent therapeutic benefit but at a lower cost was one to be seen in the context of the case.  In this case, the Tribunal rejected the first of Comcare’s two propositions (set out at [12] above) because it was not satisfied that the alternative of “home retreat” would produce therapeutic benefits similar to those of the retreat.  It did so in addressing Comcare’s assertion that, in the circumstances and on the evidence, there was such alternative treatment available.   The AAT was obliged to make a finding upon it.  It rejected the contention because there was no cogent evidence to support it.  The Tribunal did not err in concluding that, on the evidence, the alternative of a retreat conducted by the Northern Territory Buddhist Society in Alice Springs was not an available reasonable alternative treatment.  It was true to its role as a substitute arbiter of the facts for the primary decision-maker upon the material before it.

30                  As a matter of commonsense, if Comcare wished the AAT to find that the Northern Territory Buddhist Society would probably offer a retreat with similar benefits in Alice Springs, more evidence in support of that assertion was desirable.  In a practical sense, in the particular circumstances, such evidence would have been adduced by Comcare.  That is not to impose any onus of proof upon Comcare:  cf McDonald v Director-General of Social Security (1984) 1 FCR 354; Comcare v Nichols [1999] FCA 209 at [18].  Mr Holt sought to have a proposed medical treatment paid by Comcare.  He was entitled to payment if the treatment was reasonable in all the circumstances.  He had the support of his general practitioner.  In the normal course, that would be sufficient.  Merely because Comcare referred to the Northern Territory Buddhist Society website, Mr Holt did not have to prove that the Society provided an alternative treatment option available to him of probable equivalent therapeutic benefit and at a lower cost.  A moment’s pause fortifies that conclusion.  Were it otherwise, every time an injured person sought medical treatment, that person would otherwise have to positively adduce evidence that the treatment could not be provided at a cheaper price by some other medical practitioner, or that no other treatment of equivalent therapeutic value would be available at a lesser price through another medical practitioner.  The AAT, in my view, correctly decided the reasonableness of the retreat on the evidence and in all the circumstances.

31                  It is correct that the AAT, having rejected Comcare’s two identified contentions for why the proposed treatment was not reasonable, does not appear then to have further considered whether the retreat was unreasonable simply because its potential therapeutic benefit did not justify its cost. 

32                  The Statement of Facts and Contentions submitted to the AAT on 9 March 2006, well before the hearing of the AAT on 20 November 2006, included the claim that the retreat is unreasonable because:

·                    Any benefit Mr Holt may obtain by attending the retreat is outweighed by its cost (the cost was identified at about $1650);

·                    There are other forms of meditation instruction available in Alice Springs.

33                  However, the AAT is entitled to decide a review application on the issues identified in the course of the hearing and final submissions.  Not every issue raised at an early stage of its proceedings survives as an issue for determination.  The present application provides an illustration.  Initially, Mr Holt first had to overcome Comcare’s decision that the retreat did not constitute “therapeutic treatment”.  As noted, at the hearing Comcare by counsel indicated that that was no longer an issue, and that it was only the reasonableness or otherwise of the retreat as therapeutic treatment which needed to be decided.

34                  Counsel for Comcare at the start of the AAT hearing, when indicating the remaining issue was that of the reasonableness of the retreat, referred to its Contentions as identifying “three points in respect of reasonableness”.  One issue as to reasonableness raised in the Contentions of 9 March 2006 concerned an apparently different medical opinion to that of Dr Zerk about the potential therapeutic benefits of the retreat.  That, too, was not pursued before the AAT.

35                  In closing submissions, counsel for Comcare said:

It’s our submission that this is not reasonable, given the cost involved and the fact that it can be replicated in his own home where he has a supportive partner.  These are the reasons why we say it’s not reasonable.  He has a supportive partner who understands the requirements of meditation.  He has a room that he can set aside for that purpose.  He is very experienced and knowledgeable as to what is required for the purposes of meditation, having done it for some 30 years.  We say, looking at the cost, the fact that he can reproduce it himself here and the fact that the benefits are short-lived, that it’s not reasonable medical treatment, particularly given that the sessions, for example, held in the Chenrezig Institute … show these are individual retreats. 

and later (after brief submissions concerning the Northern Territory Buddhist Society) counsel for Comcare said:

Our main argument is that it is not reasonable to pay yet again – this will be something like the sixth time that Comcare has paid for a meditation retreat … It’s not reasonable, given that Comcare has already paid for a number, the high cost involved, and when Mr Holt has the expertise himself to set up a similar treatment process within his own home, by accessing advice if he needs it by some other means.  That’s our argument. 

It was in that context that counsel for Comcare, in answer to the AAT, said that it is appropriate to take into account that  Mr Holt had undertaken several similar retreats before and in that light “ … to look at the benefit and whether the cost is warranted given the benefit”.

36                  Counsel for Comcare then identified the alternative argument that Mr Holt, having been made aware of the Northern Territory Buddhist Society website, should have pursued the possibility of it providing a like retreat in Alice Springs, and that his failure to have done so meant that the AAT should find that the retreat was not reasonable.

37                  In my judgment, the AAT is not shown to have erred in law by misunderstanding the extent of Comcare’s submission about reasonableness.  Its Contentions of 9 March 2006 must be read in the light of their exposition in final submissions.  The final submissions indicate that the issue of whether the retreat was reasonable was not put on the discrete basis that, putting other treatment options aside, the point had been reached where no longer was it warranted on a cost/benefit analysis.  It was put that it was no longer reasonable having regard to the past history of the benefits of such treatment, the cost, and the availability in particular of the home retreat option with external support.  The AAT so understood that contention, and it addressed it.  It did not err in law in not addressing a contention that the retreat was not reasonable, having regard only to its cost and the past benefit of such retreats, because ultimately Comcare’s contention was not put in that way.

38                  That, of course, does not preclude Comcare from making a decision on that basis in the future if, again, Mr Holt seeks further such treatment.  In my view, however, the AAT did not err in failing to address a contention seriously advanced by Comcare, founding its third ground of appeal.

39                  For those reasons, the appeal is dismissed.

40                  I am grateful to counsel for their assistance, in particular counsel for Mr Holt who appeared pro bono on his behalf.

Associate:        

Dated:         22 March 2007