McDonald v Director-General of Social Security
1 FCR 3541984 - 0324C - FCA
(Judgment by: Jenkinson J)
Between: McDonald
And: Director-General of Social Security
Judges:
Woodward J
Northrop J
Jenkinson J
Subject References:
Social Security
Crown
Judgment date: 27 March 1984
Melbourne
Judgment by:
Jenkinson J
Appeal pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 from a decision of the Administrative Appeals Tribunal.
The circumstances of the case are set out in the reasons for judgment of Woodward J., which I have had the advantage of reading.
Two errors of law were assigned by counsel for the applicant to the reasons in writing which the Tribunal gave, in compliance with the requirements of s 43(2) of the Administrative Appeals Tribunal Act 1975, for its decision. It was said that the Tribunal mistakenly conceived an incapacity to be permanent, for the purposes of Division 3 of Part III of the Social Security Act 1947, only if the incapacity were unlikely ever to cease, whereas the proper construction of the expression "permanently incapacitated for work" required, according to the submission of counsel for the applicant, that permanence be conceded if the incapacity were likely to persist for a period of indefinite, but substantial, duration, and might not ever cease. The final clause of the last sentence may be thought otiose, since indefiniteness of duration comprehends the whole of life.
It was upon the word "indefinitely" that the applicant's submission was grounded. In Re Panke and Director-General of Social Services (1981) 4 A.L.D. 179 at 192 two members of the Administrative Appeals Tribunal, with "the substance" of whose reasons for decision the President, Mr. Justice Davies, expressed his agreement in his own reasons for decision, observed:
"What then is the meaning of the expression 'permanently incapacitated for work' in s 24 of the Act? 'Permanent incapacity' in this section is used in contradistinction to 'temporary incapacity' in s 108 of the Act dealing with the qualifications for sickness benefit. Consistently with the ordinary meaning of the words 'permanent' and 'temporary', we think 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 word "indefinitely" in that passage was to be understood, according to the submission, as meaning "for an undetermined period of time", and had been employed, not in recognition of the indeterminableness of a current life's span, but in order to comprehend as permanent not only the remainder of life but also a period the duration of which had not been estimated.
Both the two members of the Tribunal from whose reasons I have quoted, Mr. A. N. Hall, Senior Member and Mr. M. Glick, and the President of the Tribunal cite the statement of the High Court (Gavan Duffy C.J., Rich, Starke, Dixon, Evatt and McTiernan J.) in Wicks v. Union Steamship Company of New Zealand Ltd. (1933) 50 CLR 328 at 338 that the expression "total and permanent disablement" in s 9(3) of the Workers' Compensation Act 1926 (NSW) means "physically incapacitated from ever earning by work any part of his livelihood". But neither the Tribunal nor the High Court was concerned to advert to the distinction between a period measured by the life of the person whose incapacity or disablement was in question and a period of undetermined but substantial duration. Nor was any such a concern likely to have been present to the minds of the members of the Court of Appeal who in Calico Printers' Association Ltd. v. Higham [1912] 1 K.B. 93 at 97, 100-101 spoke of a permanent incapacity, to which clause 17 of the First Schedule to the Workmen's Compensation Act 1906 referred, as one unlikely to change during the remainder of life. In all three of those cases neither the evidentiary material nor the legal issues in contention raised the distinction. Notwithstanding the observations of the High Court and the Court of Appeal, I think this court free to assign to the word "permanent", in Division 3 of Part III of the Social Security Act 1947, the meaning which has been expounded in the reasons for judgment of Woodward J.. I respectfully concur in that exposition. It is consonant with what may be found in a dictionary and, as I think, with ordinary usage.
It was submitted that the passage from the Tribunal's reasons for its decision which is set out in the judgment of Woodward J. suggested a misconception by the Tribunal of what "permanently" means in Division 3 of Part III. I do not think that the passage does - or that the reasons as a whole do - give ground for any apprehension of such a misconception, and accordingly I am unable to allow the appeal on that ground.
The other error of law imputed to the Tribunal was that it had misconceived the onus of proof applicable to the determination whether the decision it had under review should be affirmed.
It was not, nor could it have been suggested that the Tribunal had failed to understand that its function was to determine for itself, upon the material before it, whether the applicant's invalid pension should be cancelled, without attaching any significance to the fact that the decision of which the applicant had sought review was for cancellation of that pension.
The passage from the Tribunal's reasons for its decision which is quoted by Woodward J. includes a statement that "a settled expectation of the likelihood of such indefinite continuance of the incapacity" is required to be formed by the "decision-maker" concerned to decide, for the purposes of Part III of the Social Security Act 1947, whether a person is permanently incapacitated for work. The statement implies that in the absence of such a settled expectation the decision will be that there is not a permanent incapacity. The expression "settled expectation" I understand, in its context, to be descriptive of the state of mind of the "decision-maker". The expression seems to me to specify, as an attribute of the decision-maker's belief, a degree of confidence in the correctness of the belief which may be suggested by the word "settled". In my opinion no such a degree of confidence is required. The "actual persuasion" of the occurrence of past act or event, which Dixon J. stated to be required if proof, in a civil curial proceeding, of the act or event were to be achieved, does not involve necessarily any greater confidence than a bare preponderance of probability may engender: see R. Eggleston : Evidence, Proof and Probability, Ch. 9. No different standard is applicable to a finding as to a future act or event, in my opinion; nor does an administrative "decision-maker" apply any different standard unless special legislative direction be given.
The passage implies the existence of what in relation to a curial proceeding would be described as an onus of proof on the applicant. There may be difficulty, as Woodward J. has pointed out, in adapting the curial conception to the processes of administrative determination of individual rights. Some of the purposes which the conception serves in a curial proceeding are achieved by other means in administrative proceedings. A court waits upon the parties to litigation to tender their proofs. When the parties differ as to which shall go first into evidence, their difference is resolved by determining upon which lies the burden of proof. (See W. M. Best : An Exposition of the Practice Relative to the Right to Begin.) But the administrative decision-maker will commonly inform himself of the facts by his own inquiries, as well as receiving such proofs as the individual citizen and those who may be authorised to oppose the citizen's interest choose to place before him. And he will not ordinarily be free, as a court is ordinarily free, to determine a matter against the party on whom lies the onus of proof, and who fails to offer any proof in discharge of the onus, without further inquiry. When the party to litigation on whom the onus of proof of an issue lies has concluded his evidence, the Court may be called upon by the other party to determine the question of law whether that evidence can support a verdict or finding for him on whom the onus lies. Except by special legislative direction no administrative decision-maker could be so constrained. In many cases subject to administrative decision there is in any event no other party in controversy with him on whom the onus may be said to lie.
There is, however, in my opinion a dilemma in which either a court or an administrative authority determining rights or liabilities may find itself, for the resolution of which the same principles are applicable by each tribunal. Either tribunal may find itself unpersuaded either that a circumstance exists or that it does not exist. (The same may be said of a past or a future circumstance.) The court or the administrative authority will determine, by reference to the substantive law, whether it is the existence or the non-existence of the circumstance which is determinative of the question for decision. In this case the Administrative Appeals Tribunal would determine whether the Social Security Act 1947, upon its proper construction, required that the applicant's pension be cancelled if she were found not to be permanently incapacitated for work, or required that the pension be cancelled unless she were found to be permanently incapacitated for work. In the former case the Tribunal's lack of persuasion that permanent incapacity did not exist would preclude cancellation. In the latter case the Tribunal's lack of persuasion that permanent incapacity did exist would result in cancellation. An application of the same principles by a court in resolution of the same dilemma is to be found in Maher-Smith v. Gaw (1969) V.R. 371. In a court the principles are expressed in terms of the onus or burden of proof. When those principles are applied in an administrative tribunal, there may be risk of misconception if the curial modes of expression are employed.
In this case the passage from the reasons for the Tribunal's decision which Woodward J. has quoted implies that it was a requirement of the Social Security Act 1947 that the applicant's pension be cancelled unless she were found to be permanently incapacitated for work, whereas my conclusion is that it was a requirement of that Act that the pension be cancelled if she were found not to be permanently incapacitated for work. If my conclusion be correct, error of law is demonstrated in the Tribunal's reasons. The error could not have vitiated the Tribunal's decision unless the Tribunal was unpersuaded, on a balance of probability, that there was not a permanent incapacity. All that can be discerned from the Tribunal's reasons is that it was unpersuaded, to the degree suggested by the expression "a settled expectation", that there was a permanent incapacity. I agree therefore that the appeal should be allowed, that the decision should be set aside, and that the case should be remitted to the Tribunal for determination according to law.
My conclusion as to what the Social Security Act 1947 required in this case is based on the following considerations. The Act contemplates that an invalid pension shall be payable in consequence of a decision, after a claim has been made, by the Director-General that it be granted : ss. 39, 37, 28(1), 7, 13 and Division 3 of Part III. The Act contemplates that the decision for grant of the pension thus made shall be sufficient authority for payment of fortnightly instalments of the pension from the date which the Director-General determines (pursuant to s 39) until a time to be fixed by a further decision of the Director-General : ss. 41, 42, 14 and Division 9 of Part III. While it may be that s 14 authorises the annulment of a decision made to grant a pension, the evidentiary material in this case establishes, in my opinion, that it was a power conferred by s 46 which had been exercised in relation to the applicant's pension, and that it was the decision taken in exercise of that power which the Tribunal was engaged in reviewing.
The grant of each of the powers conferred by s 46 - to "cancel or suspend the pension, or reduce or increase the rate of the pension" - is conditioned upon the formation by the Director-General of the opinion that the power should be exercised, and for a reason specified in one or other of paragraphs (a), (b) and (c) of s 46(1). The conditional form of the grant of power suggests, as does the legislative recognition that the original grant authorises continuance of payment until a decision terminating that authority has been made, that one of the circumstances specified in paragraphs (a), (b) and (c) must appear to the Director-General (or to his delegate or, on review, to the Administrative Appeals Tribunal) to exist before the power is exercisable. In this case the only circumstance of that kind which the evidentiary material suggests is lack of one of the qualifications for an invalid pension specified in Division 3 of Part III : lack of that permanent incapacity for work which s 24(1) (a) specifies. It is therefore a condition of the grant of power to cancel the applicant's pension that her lack of that qualification should be found, in my opinion.
Having regard to the length of time which has elapsed since the Tribunal made its decision and to the provisions of ss. 43(6), 44(4) and 44(5) of the Administrative Appeals Tribunal Act 1975, it is in my opinion desirable that the Tribunal be left free to determine for itself whether it will receive further evidence. But I think this Court's orders should be that the appeal be allowed, the Tribunal's decision be set aside, the application for review be heard and determined according to law, and the respondent pay the applicant's costs of the appeal.