McDonald v Director-General of Social Security
1 FCR 3541984 - 0324C - FCA
(Decision by: Northrop J)
Between: McDonald
And: Director-General of Social Security
Judges:
Woodward J
Northrop JJenkinson J
Subject References:
Social Security
Crown
Judgment date: 27 March 1984
Melbourne
Decision by:
Northrop J
Part III Social Security Act 1947 ("the Act") comprising sections 18 - 52 inclusive, contains provisions relating to age and invalid pensions. In that Part, unless a contrary intention appears, the word "pension" is defined to include an age pension, an invalid pension and a wife's pension. The payment of age and invalid pensions is subject to a means test and the method of implementing that test, together with a discussion of some of the sections of the Act, is discussed in Director-General of Social Security v Harris (1982) 44 ALR 645 and in particular per Northrop J. at pp. 652-660. That case concerned an age pension, but the same principles apply with respect to an invalid pension.
The present case concerns an invalid pension. Under paragraph 24(1)(a) of the Act "a person above the age of 16 years who is not receiving an age pension and. . . is permanently incapacitated for work. . . shall be qualified to receive an invalid pension". The phrase "permanently incapacitated for work" is not defined in the Act, but under s 23, for the purposes of Division 3 of Part III, comprising sections 23 - 27 inclusive, "a person shall be deemed to be permanently incapacitated for work if the degree of his permanent incapacity for work is not less than 85%".
Part VII of the Act, comprising sections 106-133B inclusive, contains provisions relating to unemployment and sickness benefits. Under s 108, "a person (not being a person in receipt of a pension under Part III. . .) is qualified to receive a sickness benefit in respect of a period (. . . 'relevant period') if and only if. . . the person satisfies the Director-General that, throughout the relevant period, he was incapacitated for work by reason of sickness or accident (being an incapacity of a temporary nature) and that he has thereby suffered a loss of salary, wages or other income". The phrase "incapacity of a temporary nature" is not defined in the Act but it is readily apparent that the Act makes a distinction between a person who is "permanently incapacitated for work" and a person who is suffering an "incapacity of a temporary nature".
The substantial question of law raised by this appeal concerns the meaning to be given to the phrase "permanently incapacitated for work" appearing in paragraph 24(1)(a) of the Act.
A reference should be made to some of the other provisions of the Act. In part III, unless a contrary intention appears, the word "claimant" means a person claiming a pension under Part III. Under s 37 a claim for an invalid pension is to be made in writing in accordance with the requirements of that section. When an invalid pension is granted, it is to be paid from a date determined by the Director-General; see s 39. The office of Director-General is constituted by s 7 of the Act, which is within Part II. Other offices are created under that Part. By s 12, the Director-General is empowered to delegate to other officers all or any of his powers and functions under the Act except the power of delegation. Under s 13, the Director-General is required to determine claims, including claims for an invalid pension, but in practice those claims are determined by delegates of the Director-General. Section 14 makes provision for the Director-General, or his delegate, to review determinations of officers under the Act, while s 15 allows appeals to the Director-General, or his delegate, from decisions of other officers within the Department. Under s 15A, and subject to the requirements set out in that section, a review of a decision of the Director-General, or his delegate, may be made by the Administrative Appeals Tribunal ("the A.A.T."). In reviewing a decision, the A.A.T. exercises all the powers and discretions conferred upon the person who made the decision; see sub-section 43(1) Administrative Appeals Tribunal Act 1975.
Where a person claims an invalid pension and except where it is manifest that the claimant is permanently incapacitated for work, the Director-General is required to direct that the claimant be examined by a legally qualified medical practioner who is required to certify whether, in his opinion, the claimant is permanently incapacitated for work; see s 27. Where an invalid pension is granted, the invalid pension is paid fortnightly; see s 41. The Act contains special provisions applicable to persons who are permanently blind and nothing in these reasons is to be taken as applying to those persons. Under the provisions of Division 9 of Part III of the Act, comprising sections 44 to 46 inclusive, pensions being paid are subject to regular review. It is not necessary to refer to each of those sections. They are discussed in some detail in Harris's case, supra. The relevant parts of sub-section 46(1) are set out:
- "46(1)
- If-
- . . .
- (c)
- for any other reason,
- the Director-General considers that the pension which is being paid to a pensioner should be cancelled or suspended, or that the rate of the pension which is being paid to a pensioner is greater or less than it should be, the Director-General may cancel or suspend the pension, or reduce or increase the rate of the pension, accordingly."
The facts of the present case are set out in the reasons of Woodward J. and need not be repeated. It is sufficient to say that the applicant had been granted an invalid pension. A delegate of the Director-General had cancelled that pension. The applicant sought a review of that decision by the A.A.T. The A.A.T. affirmed the decision of the delegate.
In its reasons for decision, the A.A.T. carefully analyzed the evidence and material before it. In considering the application of the Act to the facts found, it said:
"In Re Sheely and Director-General of Social Security (No. N81/118, decision handed down 24 June 1982), Davies J (President) referred to the terms of s 23 and s 24 of the Act in the light of a number of authorities and said:'From the context in which the term "permanently incapacitated for work" appears, it may be inferred that the incapacity must result from a medical disability, whether that disability be physical or psychic. A disability, for the purposes of these sections, includes all recognised medical conditions, injury, disease, psychosis, neurosis and the like. It comprehends the incidents of medical conditions, such as shock, upset and the functional consequences of injury or disease. It includes those cases of psychic illness which, whether or not they are properly classified as psychosis or neurosis, nevertheless have the consequence that the affected person is a sick person."
The A.A.T. expressed some doubts about whether the applicant was incapacitated for work within the meaning of paragraph 24(1)(a) of the Act, but assumed, for the purposes of the review, that she was so incapacitated. On that assumption, the A.A.T. considered whether the applicant was permanently incapacitated for work and expressed the opinion that it, the A.A.T., "should not, on the evidence, and in particular the evidence of Dr Nicholson which we accept, view this 32 year old woman as being 'permanently' incapacitated". Accordingly, the A.A.T. did not need to determine whether the applicant's degree of incapacity for work was not less than 85%; see s 23 of the Act.
On the evidence and material before it, the A.A.T. clearly was able to find that the applicant was not "permanently incapacitated for work" within the meaning of paragraph 24(1)(a) of the Act, but in coming to that view the Tribunal added a gloss to a general statement of principle which they said should be applied. The general statement of principle was expressed as follows:
"We have taken into account the interpretation given to that phrase in Re Panke and Director-General of Social Security (1981) 4 ALD 179 at p 192, namely that 'permanent incapacity must be taken to refer to an incapacity which is likely to last indefinitely as opposed to one which is likely to last only for a time,'
The gloss was expressed as follows:"To this we would add that compliance with the statutory requirement of permanency demands, in our opinion, that the decision-maker should be able to form, on the evidence, a settled expectation of the likelihood of such indefinite continuance of the incapacity. We think that it would be quite wrong to conclude that the applicant's incapacity is permanent in this sense. There was evidence before us of deficiencies in her management of her medication, of the possibility of the medication itself being improved, and of the possibility of maturation of personality. She is, as we have said, only 32, and it would be in accordance neither with the letter nor the spirit of the legislation to regard the applicant as qualifying for invalid pension on the basis of the permanency of her incapacity."
As stated earlier, the substantial question of law raised by the appeal is whether the A.A.T. misapplied paragraph 24(1)(a) of the Act. As stated in the amended notice of appeal, the question of law raised by the appeal is whether the A.A.T. was wrong in law in:
"Finding that 'permanent incapacity' must be taken to refer to an incapacity which is likely to last indefinitely as to be opposed to one which is likely to last only for a time and that the decision maker should be able to form on the evidence a settled expectation of the likelihood of such indefinite continuance of the incapacity."
The phrase "permanently incapacitated for work" appears in social welfare legislation which also makes provision for sickness benefits to be paid to a person "incapacitated for work" being "an incapacity of a temporary nature"; see s 108 of the Act. A distinction of a temporal nature is thus drawn, even though in this context, of necessity, "permanent" must be limited in time. In some workers' compensation legislation, another type of social welfare legislation, reference is made to "permanent" disablement. In the context of that type of legislation, the High Court has characterized the concept of "permanent" as being forever. Thus, in Wicks v. Union Steampship Company of New Zealand Ltd. (1933) 50 CLR 328 , the Court comprising Gavan Duffy C.J., Rich, Starke, Dixon, Evatt and McTiernan J. at pp.338 said:
"The sub-section then excepted from the limitation cases of permanent and total disablement. The Commission was, therefore, called upon to decide whether the worker had been permanently and totally disabled, an expression which, in our opinion, means physically incapacitated from ever earning by work any part of his livelihood."
To some extent the absolute nature of "forever" in relation to an incapacity for work is eased by the statement of principles enunciated in Panke's case, supra, that under the Act, "permanent incapacity must be taken to refer to an incapacity which is likely to last indefinitely as opposed to one which is likely to last only for a time". I agree with the opinion of Woodward J. that under the Act the true test of whether incapacity for work is permanent as distinct from being of a temporary nature is whether, in the light of all the evidence and material before the Director-General, or his delegate, or the A.A.T., the incapacity for work is more likely than not to persist in the foreseeable future. I agree also with the application of the test as expressed by Woodward J.
The provisions of the Act, especially the provisions of Division 9 of Part III, make it clear that although there must be finality concerning the fortnightly payments of invalid pension, there is no permanency in relation to their continuity. The Director-General has an obligation to maintain a constant review of the entitlement to and the payment of the invalid pension. He has power to cancel an invalid pension where the pensioner is no longer qualified to receive it. All the provisions of that Division support the view that an absolute application of the test of "permanency" should not be adhered to when applying the provisions of the Act.
In applying the test of permanency, the Tribunal added a gloss to the statement appearing in Panke's case, supra. I agree with the opinion of Woodward J. that the gloss imposes a stricter requirement on a claimant for an invalid pension than is required by paragraph 24(1)(b) of the Act and that in this case the A.A.T. may have misdirected itself as to the law. For the reasons expressed by Woodward J., I would set aside the decision of the A.A.T. and remit the review to the Tribunal to be decided in accordance with the observations of the Court either with or without the hearing of further evidence as the Tribunal may direct.
On the appeal, the applicant, by leave, raised the question of whether the Tribunal was wrong in law in:
"Directing itself as to which party bore the onus of proof and more particularly in impliedly placing the onus of proof on the Applicant."
This question was not raised before the A.A.T. and the question of onus of proof was not referred to in its reasons. In my opinion, it is undesirable that in this case the Court should express an opinion on that question, but since the matter was raised, some general comments should be made. It is sufficient to say that terminology used in relation to courts may tend to cause confusion and difficulties when applied to persons exercising statutory powers of a different kind. The Director-General is not a party to claims for pensions under Part III of the Act. Under that Part, persons who come within specified criteria are "qualified to receive" an age pension, an invalid pension or a wife's pension respectively; see sections 21, 24 and 31 respectively. A person makes a claim for a pension and that claim is determined by the Director-General or his delegate. The Director-General, or his delegate, determines a claim on all the relevant material in his possession. Parties do not appear before him. There are no adversary procedures. In one sense it is true to say that a claimant has an onus of proof, but the use of that expression obscures the true nature of the duty imposed on the Director-General, or his delegate, to determine the matter. A pension is paid only so long as the pensioner is qualified to receive the pension. The rate of pension may vary depending upon what facts are known by the Director-General or his delegate. If a change in circumstances occurs, it is unreal to suggest that the Director-General, or his delegate, has an onus of proof, whether evidentiary or not, to be satisfied before varying a pension entitlement. The ultimate question is whether the person is qualified to receive the pension and, if so, at what rate. These questions must be decided after a consideration of all the material before the Director-General, or his delegate, when the decisions are made. The question of whether a pensioner is "permanently incapacitated for work" has to be decided in accordance with the opinions expressed above.
Similar principles apply to proceedings before the A.A.T. The Tribunal is not bound by the rules of evidence. It has before it all the material that was before the person who made the decision under the Act and which is the subject of the review before the A.A.T. Additional material may be placed before the A.A.T. As a matter of convenience, the Director normally appears to assist the Tribunal, but the Director-General is not to be treated in the same way as a party to proceedings before a Court. In Sordini v Wilcox (1982) 42 ALR 245 , a review under the Administrative Decisions (Judicial Review) Act 1977, the administrative body whose decision was being reviewed appeared before the Court. At p 255 Northrop J. said:
"Counsel for the respondents stated that each of the first three-named respondents, being the members of the Review Committee, would abide by the order of the court. Counsel for the respondents, very properly, made substantive submissions on behalf of the Commission. Where there are no adversary parties appearing before an administrative body, as in this case, it is important that the court receive assistance of counsel appearing for the administrative body making the decision which is being challenged under the Judicial Review Act."
It is equally important that in reviews by the A.A.T. of decisions by administrative bodies such as the Director-General, or his delegate, in which there were no adversary parties, the A.A.T. receive the assistance of persons acting on behalf of the administrative body. Likewise, in appeals of this Court from the A.A.T. on questions of law, it is important that the Court receive the assistance of counsel appearing for the administrative body. This practice, however, which gives the outward appearance of an adversary system, should not be allowed to obscure the true position, and in particular to justify the introduction of concepts of onus of proof into the determination of claims under the legislation where no onus of proof in the legal sense arises. This view, quite correctly, has been acted upon by the A.A.T. in the past. The A.A.T. has not departed from that practice in the present case.