Case: Dragojlovic v Director General of Social Security (1984) 1 FCR 301
Outcome: applied
In its decision the Tribunal quoted from the decision of Smithers J in Dragojlovic v Director-General of Social Security (1984) 1 FCR 301 at 305 where his Honour said: "In any case in which treatment is refused the question for the respondent or the Tribunal is not whether the refusal is reasonable or otherwise, but whether, on the probabilities, the refusal is genuinely based on grounds which, in fact, compel the person concerned, acting honestly, so to refuse ..." 17 It is true, as Ms Macdonnell pointed out, that Dragojlovic and Koutsakis were concerned with different statutory criteria. In Dragojlovic the Tribunal, confirming an order for the cancellation of an invalid pension, had found as a fact that the applicant had unreasonably refused to undergo a lumbar laminectomy. Smithers J dealt first with the general provision in s 23 of the Social Security Act 1947 (Cth) (originally the Social Services Act 1947 but title amended by Act No 37 of 1982). Section 23 provided that a person shall be deemed to be permanently incapacitated for work if the degree of permanent incapacity for work is not less than 85 per cent. His Honour at 302 quoted with approval a decision of Todd DP in Re Korovesis v Director General of Social Security (1983) 6 ALD 244 to the effect that a claimant for a pension "cannot be compelled to have an operation". 19 His Honour at 303, pointed out, as had Todd DP, the difference between, on the one hand, pension claims and, on the other, workers compensation and tort claims. In the latter case, objectively unreasonable refusal to undergo medical treatment may bring to an end the liability of employer or defendant to compensate. However in the former case, in the words of Todd DP, quoted with approval by Smithers J at 303: " ...there is no element of compensation or redress of damage involved in the provisions of the Act in question. Those provisions relate to the objective provision of a minimum level of support, to determining whether a 'safety net' should be placed under a person in crisis. In the case of invalid pensions, such support is to be given where he or she is, for the foreseeable future, incapacitated for work." At 304 his Honour said: "Of course, it has been felt to be unsatisfactory that a person who refuses to undergo treatment which would probably cure his incapacity and which it would be reasonable, objectively regarded, for him to undergo, should qualify for a pension. Common sense suggests that it would be unfair that the community should pay a pension to such a person. As a result, it has been thought proper to import, by analogy, the notion that incapacity which is curable by the adoption of measures which it is objectively reasonable to take, is not permanent incapacity. There is however, in my opinion, no warrant for this. Under the Act qualification for a pension depends upon a state of fact. The Act does not lay down as a condition of the qualification that there be a reasonable cause for its existence. At the same time, to treat an incapacity as permanent, simply because a claimant will not take steps to be cured would be unacceptable from any point of view." Later his Honour said at 305: "In any case in which treatment is refused the question for the respondent or the Tribunal is not whether the refusal is reasonable or otherwise, but whether, on the probabilities, the refusal is genuinely based on grounds which, in fact, compel the person concerned, acting honestly, so to refuse." As his Honour emphasised, the question is one of bona fides. 20 In Dragojlovic the case actually turned on a more specific provision of the 1947 Act, namely s 135M(1), which dealt with refusal or cancellation of a pension where the person did not receive treatment for "physical rehabilitation" or "suitable training for a vocation". Suffice to say Smithers J construed that provision consistently with his views on the policy and purpose of the Act. 21 In Koutsakis a Full Court at 45 noted: "The cases make it clear that the mere failure of a person to undertake medical or other treatment which is recommended to him does not disentitle him from receiving a pension or an award of compensation". Their Honours agreed with and adopted what as said by Smithers J in Dragojlovic and said at 45: "... there is no finding that the appellant's fears are not genuinely entertained by him. In our opinion, the mere fact that the appellant's fears are groundless does not make them unreasonable if they are genuine". 24 The Tribunal's emphasis on the lack of "grounds" indicates that it was treating the test as objective. While the Tribunal cited a passage from Dragojlovic , read as a whole Smithers J is not saying that the person seeking to obtain, or maintain, a pension must show some reason or fact external to his or her decision not to undergo the treatment in question. On the contrary, the emphasis is on subjective good faith, or the lack thereof, in the person's decision, however irrational it may seem. This view of Dragojlovic is confirmed by what the Full Court said in Koutsakis . 26 If the Tribunal came to the view that Mr Jansen was not acting bona fide but rather, in the words of Smithers J as "the result of a tactical exercise designed to obtain a pension" ( Dragojlovic at 305), fairness would demand a clear finding to that effect, with reasons. The lack of such a finding points to a conclusion that the Tribunal misunderstood the correct test. 27 McKinnon had nothing to do with social security. It was a claim for damages for personal injuries allegedly caused by the negligence of the Commonwealth and New South Wales Governments (proceeding NG 518 of 1996). The question before Hill J was whether the proceeding should be stayed until the applicant attended a medical examination arranged by the respondents. The Tribunal's citing of McKinnon strongly suggests that it misunderstood the question for its decision. A point made at some length in Dragojlovic is that the objective reasonableness of proposed medical treatment will be relevant for common law in workers compensation claims but not under a social security regime.