Federal Court of Australia

Harris v Military Rehabilitation and Compensation Commission [2025] FCA 381

ORDERS

THE COURT ORDERS THAT:

1.    The application for an extension of time to commence an appeal made pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) dated 15 December 2023 be dismissed as not competent.

2.    The applications made pursuant to the Administrative Decisions (Judicial Review Act) 1977 (Cth) and the Judiciary Act 1903 (Cth) be dismissed.

3.    The applicant pay the respondent’s costs of and incidental to his applications to be agreed or assessed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCEVOY J:

1    There are three applications before the court. The first is an application for an extension of time to commence an appeal pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), which is accompanied by an amended draft notice of appeal from a tribunal dated 15 December 2023. By this draft notice of appeal the applicant, Mr Matthew Harris, who is self-represented, seeks to appeal a determination of the Administrative Appeals Tribunal made on 24 February 2023 which is the subject of written reasons dated 24 March 2023.

2    The substantive matter in the Tribunal involves a review of a decision of the respondent Military Rehabilitation and Compensation Commission (the Commission) dated 9 December 2015. That decision affirmed an earlier decision of the Commission which determined that Mr Harris’ rehabilitation program was closed, and deemed him to be able to earn a certain amount per week pursuant to the provisions of the Military Rehabilitation and Compensation Act 2004 (Cth) (MRC Act). Mr Harris requested an interlocutory hearing in the Tribunal for certain preliminary issues to be determined prior to the final hearing. One of those issues, and the one which is relevant for present purposes, is whether the deeming decision of actual earnings made by the Commission with respect to Mr Harris is within the scope of the Tribunal’s review. The Tribunal considered this question, and determined that the deeming decision made by the Commission is within the scope of the Tribunal’s review. The Tribunal is yet to conduct the substantive review.

3    In answer to Mr Harris’ draft notice of appeal it is the Commission’s position that the Tribunal’s determination that the deeming decision of actual earnings is within the scope of its review is not a “decision” for the purposes of s 44 of the AAT Act (as then in force) in that it is interlocutory. The Commission objects to the competency of Mr Harris’ first application on this basis, and also because the draft notice of appeal does not comply with the relevant provision of the Federal Court Rules 2011 (Cth) which requires the identification of the “precise question or questions of law to be raised on the appeal”.

4    In advance of the hearing in this court, the parties filed written submissions. In consequence thereof, and noting the objection to competency which was taken by the Commission, the week before the matter was to be heard Mr Harris apparently made an attempt to file a document entitled: “Draft originating application for relief under s 39B of the Judiciary Act 1903 and judicial review” (the s 39B application), together, some days later, with an application for an extension of time “to commence an application for review under s 11(1)(c) of the “ADJR Act”. There was some difficulty with the s 39B application and this further extension of time application, and despite Mr Harris’ assertion at the hearing that those documents had been filed the day before, it would seem that as at the date of the hearing neither document had been accepted for filing. Although the s 39B application does not explicitly purport to advance an application for judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act), that was apparently Mr Harris’ intention and he made an oral application at the hearing to file that document. The solicitor for the Commission informed the court in response that the Commission accepted that the s 39B application should, in substance, be regarded as an application for relief under s 39B of the Judiciary Act 1903 (Cth) (Judiciary Act), as well as an application under ss 5 and 6 of the ADJR Act seeking review of the Tribunal’s determination.

5    On this basis, and although the Commission maintained its objection to the competency of the purported appeal pursuant s 44 of the AAT Act, the Commission accepted that the court should deal with the substantive question underlying Mr Harris’ applications. That is, the question of whether the Tribunal erred in the way in which it dealt with Mr Harris’ interlocutory application concerning whether the Commission’s deeming decision of actual earnings is within the scope of the Tribunal’s review. The Commission’s position is that the court has jurisdiction to consider the applications under s 39B of the Judiciary Act and ss 5 and 6 of the ADJR Act, and that it should do so. These are the second and third applications before the court. The Commission accepts that the determination of the extension of time issues arising in relation to the Mr Harris’ primary application is inextricably linked to the merits of his subsequent applications.

6    For the reasons that follow I have determined that the Tribunal did not err in the way in which it dealt with the question of whether the Commission’s deeming decision is within the scope of the Tribunal’s review. The Commission’s deeming decision was not prohibited by the provisions of the MRC Act, and is therefore a reviewable decision within the jurisdiction of the Tribunal.

7    It follows that each of Mr Harris’ applications must be dismissed. For reasons I explain below, I also accept the Commission’s position that, notwithstanding that the purported appeal brought pursuant to s 44 of the AAT Act would fail on the merits in any event, it is not competent because being interlocutory in nature it does not relate to a “decision”.

Background and the tribunal’s decision

8    As has been mentioned, Mr Harris has sought review in the Tribunal of a reviewable decision of the Commission. This decision, referred to as a “deeming decision” or “deeming” was a decision as to Mr Harris’ actual earnings pursuant to the provisions of the MRC Act for the purpose of calculating his entitlement to incapacity payment. The Commission’s decision determined that Mr Harris’ rehabilitation program was closed and deemed him able to earn a certain monetary amount per week as a sales representative in the fitness or hospitality industry, working full time.

9    In the course of the proceedings in the Tribunal Mr Harris contended that the Tribunal’s jurisdiction to review the decision before it was limited, relevantly, in that the operation of s 181 of the MRC Act in the circumstances of his case mandates a finding that his “actual earnings” were $nil because he was “working in suitable employment” and the “weekly amount that [he was] earning in that work” was $nil. That is, Mr Harris contends that there is no discretion in s 181 of the MRC Act to determine his actual earnings as other than $nil such that as a matter of statutory construction the Tribunal does not have jurisdiction to reach any other conclusion.

10    The interlocutory application dealing with this and other issues proceeded to a hearing in the Tribunal on 25 October 2022. Subsequently, further written submissions on the issues raised were provided by the Commission and then by Mr Harris. The interlocutory hearing was resumed on 24 February 2023, and the Tribunal made an ex tempore decision on that date. Reasons for decision were requested by Mr Harris and, as has been mentioned, these were published by the Tribunal on 24 March 2023.

11    The relevant parts of the Tribunal’s consideration of whether the deeming decision of actual earnings is within the scope of its review are as follows:

(a)    first, at [13], the Tribunal accepted that the deeming of actual earning is within the scope of its review as it clearly formed part of the decision and was within the power of the delegate to make;

(b)    secondly, at [14], the Tribunal accepted that “the clear wording of section 181(1) enabled it in determining actual earnings to ‘have regard to any other matter it considers relevant’”;

(c)    in making this finding the Tribunal specifically noted, at [14], that it accepted the Commission’s contention that the section includes a “residual discretion which, while not unfettered, is very broad and which would allow, in appropriate circumstances, a finding of actual earnings of an amount different than that which a person may have ‘earned’ while in suitable work”, finding that it is clear from the plain reading of s 181 that the discretion is broad and intended to be so;

(d)    the Tribunal, at [14], was satisfied that there was “no basis for concluding that the discretion should be read narrowly as contended by the applicant”;

(e)    the Tribunal also noted, at [14], that it was satisfied “that in the context of self-employment there may be circumstances where it is appropriate to have regard to broader considerations when determining actual earnings”, and that in reaching that conclusion it “is not to suggest that the decision maker can ignore the applicant’s ‘earnings’; rather, the residual discretion enables broader considerations to be taken into account when determining the weekly amount a person is able to earn”;

(f)    thirdly, at [15], the Tribunal dealt with the Mr Harris’ submissions about the beneficial nature of the MRC Act, finding that while it may be accepted that the MRC Act is intended to be beneficial to members, and should be read in that context, the broad discretion in s 181(1) is consistent with such a reading (that is to say, there is nothing in the wording of the section to suggest that it can only be applied to the detriment of an applicant);

(g)    fourthly, the Tribunal accepted that while there were some differences in the structure and wording of the MRC Act and the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act), nothing material turned on the drafting order of s 181 or the beneficial nature of the MRC Act to “cause the Tribunal not to accept the application of the reasoning of the authorities cited in support of an interpretation of section 181(1) of the MRC Act that recognises the existence of the broad residual discretion to have regard to other matters considered relevant”;

(h)    fifthly and critically, at [16], the Tribunal concluded that the substantive questions raised by Mr Harris were ones which were properly dealt with at a final hearing once consideration had been given to evidence and factual matters, the Tribunal observing in this regard:

The Tribunal accepts the applicant’s contention that a determination with respect to suitable work is required to be undertaken before applying section 181. However, this does not alter the Tribunal’s view on the existence of a broad residual discretion as already described. In the Tribunal’s view, these are matters that are appropriately determined by the Tribunal at the final hearing. The Tribunal also does not accept that the more specific provisions in sections 181(3) to (5) should cause the Tribunal to apply a narrower reading of the residual discretion in section 181(1) as contended by the applicant. Ultimately, the Tribunal’s conclusion with respect to actual earnings for the purpose of the MRC Act and the appropriate application of section 181 is, again, a matter than can only be determined having regard to all the relevant circumstances of the case at a final hearing.

(Emphasis added.)

12    Mr Harris’ position is that if his contention with respect to s 181(1) of the MRC Act is correct, then the Tribunal’s interlocutory decision of 24 February 2023 should be set aside.

The statutory scheme

13    Part 4 of the MRC Act provides for compensation for incapacity for work for former members of the Defence Force. It is uncontentious that during the relevant period Mr Harris was (and is) a former member of the Defence Force.

14    Section 117 of the MRC Act provides what is referred to as a “simplified outline” of Part 4. Amongst other things it states:

The amount of compensation a person receives for a week depends on the difference between the person’s normal and actual earnings for the week. The person’s normal earnings are a notional amount. The person’s actual earnings are based on how much the person actually earns for the week.

(Emphasis added.)

15    That is to say, the incapacity payment a member receives is calculated by subtracting their actual earnings (being their post injury earnings) form their normal earnings (being their pre-injury earnings).

16    Section 132 then provides the relevant definitions:

132 Definitions of actual earnings, normal earnings and normal weekly hours

(1) In this Part:

actual earnings for a person for a week means the greater of the following amounts:

(a)     the weekly amount (if any) that the person is able to earn in suitable work;

(b)     the amount (if any) that the person earns for the week (including from allowances other than expense allowances) from any work that is undertaken by the person during the week.

Note 1:    Bonuses are excluded from the calculation of actual earnings under section 180.

Note 2: Section 181 sets out some matters that the Commission must have regard to in determining the amount that the person is able to earn under paragraph (a).

17    Section 181, which is central for present purposes, is in the following terms:

181 Matters to be considered in determining actual earnings

(1)     This section sets out those matters that the Commission must have regard to in determining the weekly amount that a person is able to earn in suitable work for the purposes of:

(a)     paragraphs 101(4)(a), 105(4)(a) and 115(4)(a) (definition of actual civilian earnings); and

(b)     paragraph (a) of the definition of actual earnings in subsection 132(1).

In addition, the Commission may have regard to any other matter it considers relevant.

(2)     If the person is working in suitable work, the Commission must have regard to the weekly amount that the person is earning in that work.

(3)     If any of the following applies after the person becomes incapacitated for work, the Commission must have regard to the matters set out in subsection (4):

(a)    the person fails to accept an offer of suitable work that is made to the person;

(b)     an offer of suitable work is made to the person and accepted but the person fails to begin, or fails to continue, the work;

(c)     an offer of suitable work is made to the person on the condition that the person complete a reasonable rehabilitation or vocational retraining program but the person fails to do so.

(4)     If subsection (3) applies, the Commission must have regard to:

(a)     the weekly amount that the person would be earning in that work if the person had not failed as described in subsection (3); and

(b)     whether that failure was reasonable in all the circumstances.

(5)     If the person has failed to seek suitable work after becoming incapacitated for work, the Commission must have regard to:

(a)     the weekly amount that the person could reasonably be expected to earn in suitable work, having regard to the state of the labour market at the relevant time; and

(b)     whether that failure was reasonable in all the circumstances.

(Emphasis added.)

18    It should also be noted that s 5 of the MRC Act is the definitions section, and “suitable work” is there defined as follows:

suitable work for a person means work for which the person is suited having regard to the following:

(a)     the person’s age, experience, training, language and other skills;

(b)     the person’s suitability for rehabilitation or vocational retraining;

(c)     if work is available in a place that would require the person to change his or her place of residence—whether it is reasonable to expect the person to change his or her place of residence;

(d)     any other relevant matter.

19    Importantly, the definition of “suitable work” is limited to identifying the type or kinds of work a person could perform. As the Commission submits, it does not have regard to considerations such as the number of hours per day or days per week that work would involve, or whether it is seasonal or casual work.

THE PROPER CONSTRUCTION OF SECTION 181

20    Mr Harris has filed some 136 pages of written submissions in support of his contention as to the proper construction of s 181(1) of the MRC Act. At the hearing he spoke to these submissions with admirable brevity, but he accepted that they provided a complete statement of his position. Mr Harris also filed a further four pages of written submissions after the hearing. It is unnecessary to recount these submissions in all their considerable and prolix detail. It is apparent that the crux of Mr Harris’ applications concerns the proper interpretation of the scope and application of the discretion reposed in the Commission by s 181(1) of the MRC Act which provides that, in addition to the matters to which the Commission must have regard (which are specified expressly in s 181(2)-(5)), the Commission may have regard to any other matter it considers relevant.

21    Mr Harris submits that in his circumstances the discretion in s 181(1) could never be exercised in determining the weekly amount that he is able to earn in suitable work for the purposes of s 132(1) of the MRC Act.

22    Although Mr Harris’ submissions are expansive, and at times of tangential relevance, the substance of them is as follows:

(a)    on a proper construction of the MRC Act, a decision-maker is barred from attempting to deem a veteran with a level of actual earnings different to that which is actually received each week when they are engaged in suitable work;

(b)    there is no discretion conferred on the Commission to do otherwise in circumstances where a veteran is engaged in “suitable work” within the meaning of s 181(1) of the MRC Act;

(c)    there can be no other matter relevant to the consideration of actual earnings when a veteran is already engaged in suitable work;

(d)    a discretion to deem a veteran with a level of actual earnings different than that which is actually received when the veteran is engaged in suitable work is not supported by the text, object or purpose of the MRC Act, or supported by relevant extrinsic materials, which are to be interpreted as beneficial to veterans;

(e)    that the discretion in s 181(1) to “adversely deem” is limited (in that the power cannot be enlivened) “by either an unreasonable action or failure needing to exist as a pre-condition and jurisdictional fact”, and that being engaged in suitable work could “never” be an unreasonable action or failure;

(f)    the factors which a decision maker must have regard to which are listed in s 181 are determinative, in that if they exist as factual matters and regard is had to them they cannot then be dismissed; and

(g)    in any particular circumstance, the facts can only ever engage subsection 181(2), or subs 181(3)-(4), or subs 181(5) of the MRC Act independently (this is to say that s 181(2) is the applicable provision where a veteran is already engaged in suitable work and their actual earnings must be the earnings received from that work, rather than being “deemed” under s 181(1)).

23    In answer to Mr Harris’ submissions as described, the Commission contends that the purpose and structure of Part 4 of the MRC Act make it clear that a decision maker is not barred from deeming a veteran’s actual earnings to be an amount that is different to that which a person working in suitable work earns in that week.

24    The Commission submits that the correct construction of s 181 of the MRC Act is as follows:

(a)    in determining the actual earnings of a person in a particular week, the Commission must first identify whether the person was working in suitable work in that week;

(b)    if the person was working in suitable work in that week, then the Commission must identify the amount the person earned in that suitable work in that week;

(c)    in determining the actual earnings for the week, the Commission must have regard to that amount, and that amount is a primary consideration in determining the actual earnings of the person;

(d)    however, the Commission has a residual discretion by virtue of s 181(1) to “have regard to any other matter it considers relevant” to determining the actual earnings of the person;

(e)    that discretion allows the Commission, in appropriate circumstances, to determine an actual earnings amount for a person which is a different amount to that earnt by the person in that week in suitable work.

25    The Commission submits that the above construction of s 181 of the MRC Act finds support on the following bases.

26    In Minister for Indigenous Affairs v MJD Foundation Limited (2017) 250 FCR 31 at [125], Perram J stated the following (citing Taylor v Owners – Strata Plan No 11564H (2014) 253 CLR 531 at [35]-[40] (French CJ, Crennan and Bell JJ) and Marshall v Watson (1972) 124 CLR 640 at 649 (Stephen J)):

The current approach to statutory interpretation involves courts assuming that those drafting legislation, and parliaments which enact it, are familiar with the general principles of statutory construction, and that courts will take statutory language as they find it, read with the purpose and context in which it appears. If a particular outcome or effect is intended by a statutory provision, the language used by Parliament should make that clear.

27    The Commission submits that regard must be had to this statement of principle when construing s 181 of the MRC Act. That section uses both the expressions “may” and “must”. The Commission submits that subject to the context in which the word appears, the use of the word “must” is generally taken to impose an obligation to exercise the function to which it is connected: see Grunwick Processing Laboratories Ltd v Advisory, Conciliation and Arbitration Service [1978] AC 655 at 690. The use of the word “may” in s 181(1), however, imports a permissive obligation rather than a mandatory one.

28    The Commission submits that the cascading effect of s 181(1) and s 181(2) of the MRC Act requires that if a person is in suitable work in a particular week, the amount earned must be considered in determining the actual earnings for that week. However, the residual discretion in s 181(1) means that other relevant circumstances may be taken into account to the extent that the Commission considers appropriate.

29    Further, the Commission submits that the expression “have regard to”, as is also to be found in s 181, is an expression commonly used in legislative provisions. This phrase has been consistently interpreted to mean that the decision-maker must take into account the matter to which regard is to be had, and give weight to it as an element in making the decision: see, for example, Singh v Minister for Immigration & Multicultural Affairs (2001) 109 FCR 152 at [54] (Sackville J).

30    Having regard to the provisions of the MRC Act, the Commission submits that there can be more than one kind of “suitable work” available to a person. This being the case more than one subsection in s 181 may be applicable to that person, and may therefore be relevant to and require consideration as part of a determination of actual earnings. Insofar as Mr Harris’ construction requires the exclusion of any other types of “suitable work” for the purposes of assessing a person’s actual earnings when they are engaged in suitable work of any kind, the Commission submits that this construction is inconsistent with the definition of actual earnings in s 132(1) of the MRC Act.

31    In this regard the Commission submits that the inclusion of a residual discretion in s 181(1) allows the decision maker to take into account circumstances which are relevant properly to assessing the actual earnings of a person; that is to say “reasons outside the control of the Commission”: see in this regard Explanatory Memorandum, Military Rehabilitation and Compensation Bill 2023 (Cth) (Explanatory Memorandum). These circumstances may include the personal choices of a person only to work part-time, for reasons other than as a result of the service injury or disease (for example, due to family commitments), or the availability of particular work based on the lifestyle choices or the location in which the person chooses to live.

32    In circumstances such as these, the Commission submits, while the person may be working in suitable work in a week, their earnings for that week may not be an accurate assessment of “the weekly amount (if any) that the person is able to earn in suitable work’: s 132(1)(a) of the MRC Act.

33    Thus, the Commission submits that in Mr Harris’ circumstances, while he chose to engage in a particular type of self-employment which otherwise met the definition of “suitable work”, it was open to the Commission to consider all relevant circumstances, including the availability of other suitable work, in determining the his “actual earnings” for each relevant week pursuant to s 132(1)(a) of the MRC Act.

34    The Commission submits that, ultimately, it will be a matter for the Tribunal at the substantive hearing to determine Mr Harris’ actual earnings for each relevant week. This will include a consideration as to whether there should be a deemed ability to earn, which may or may not be different to his actual earnings while self-employed, based on his skills and abilities.

35    The Commission’s position is that these general propositions of statutory interpretation and calculation of earning capacity in the context of establishing an entitlement to a benefit outlined above are long established and are not displaced by ss 132 or 181 of the MRC Act. In this regard the Commission refers to the observations of Windeyer J in J & H Timbers Pty Ltd v Nelson (1972) 126 CLR 625, where his Honour stated (at [643]):

…The earning capacity of a man as a worker is measured by the remuneration that is the fruit of his labour, his wages or their equivalent. It is not to be measured the profits he derives by embarking his capital in a business or by his usual capital equipment in earning money…

36    The Commission submits that there is nothing in the case law involving compensation for members of the Defence Force or elsewhere which displaces the proposition that a person’s earning capacity may be determined to be different to their actual earnings. There is also no section of the MRC Act, the Commission submits, that prohibits a person’s actual earnings as being determined by reference to what they are able to earn. The Commission also contends that the Explanatory Memorandum reinforces that regard must be had to what a person earns in suitable employment in a week, but it does not mandate that no further discretion is reposed in the Commission to determine a different actual earnings in appropriate circumstances.

37    The Commission submits that how this is taken into account and applied to Mr Harris pursuant to 181(1) of the MRC Act is a matter for the Tribunal to determine at the substantive hearing. The Commission’s position is that in the absence of these factual issues being considered and determined by the Tribunal, the present application is one which seeks impermissibly to have the court answer abstract, hypothetical or moot questions, or give something in the nature of an advisory opinion: Duncan v CEO, Centrelink [2008] FCA 54 at [32] (McKerracher J).

38    There is considerable force in the Commission’s submissions and it is sufficient to say that I accept them for present purposes. There is no error disclosed in the Tribunal’s conclusion that the deeming decision of actual earnings is within scope of review for the reasons that it gave. The text of s 181(1) and the context and purpose of the MRC Act do not support a conclusion that as a matter of statutory construction there can be no deeming of actual earnings where a person is already engaged in suitable work. Indeed I am satisfied, as the Commission submits, that to deem in such circumstances may be a course open to the decision maker in the exercise of the discretion reposed in it. I do not accept that there is anything in the MRC Act or elsewhere which expressly or impliedly “bars” a decision maker from doing so. These were the findings of the Tribunal. The question of how s 181(1) was applied to Mr Harris, including as to how any applicable discretion is to be exercised, constitute the substantive issues before the Tribunal, which for the reasons submitted by the Commission ought be left to the Tribunal in the usual course of its merits review.

CONCLUSION

39    For these reasons, Mr Harris’ application for an extension of time to appeal under s 44 of the AAT Act, his application for review under the ADJR Act, and the s 39B application will be dismissed.

40    Insofar as the application made pursuant to s 44 of the AAT Act is concerned, I record finally that I do not consider that the Tribunal’s decision is a “decision” amenable to appeal under s 44 of the AAT Act. As the Full Court determined in Director-General of Social Services v Chaney (1980) 47 FLR 80 (at 593) (Deane J, Fisher J agreeing), a decision is appealable under s 44(1) of the AAT Act if it constitutes the effective decision or determination of the application for review, which will often be the final decision formulated in accordance with the provisions of s 43 of the AAT Act. This is so because it is undesirable for appeals against interlocutory decisions of the Tribunal to fragment and delay proceedings: see Chaney at 594; Geographical Indications Committee v The Honourable Justice O’Connor [2000] FCA 1877 at [26] (von Doussa, O’Loughlin and Mansfield JJ), citing Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 628-9 (Gibbs CJ, Aickin, Wilson and Brennan JJ), and Re Will of Gilbert (1946) 26 SR (NSW) 318 at 323 (Jordan CJ). Contrary to the submissions made by Mr Harris, the Tribunal’s decision regarding its jurisdiction is not final or determinative of the application for review.

41    As to Mr Harris’ submission that the Tribunal’s decision fell within the qualification Deane J contemplated in Chaney (at 593), namely that one of the qualifications to the requirement in the AAT Act that an appealable decision be a “final” decision is where the proceeding before the Tribunal can properly be divided into two or more separate parts, I reject Mr Harris’ submission. I am not satisfied that the findings of the Tribunal which are the subject of the complaint Mr Harris has advanced can be separated from the overarching question which is the subject of the proceedings in the Tribunal.

42    Mr Harris’ applications having been dismissed, there is no obvious reason why costs should not follow the event. There will therefore be an order that Mr Harris pay the Commission’s costs as agreed or assessed.

Associate:

Dated:    17 April 2025