Jenkins v National Disability Insurance Agency [2026] FCA 1307 (Link to AUSTLII).
With thanks to Anna Sundararajan for drawing attention to this decision where the Federal Court was called upon to consider the powers of the NDIA to recover past supports paid by the Agency to an NDIS participant out of any compensation to be paid to the participant in respect of a personal injury that has caused the impairment which qualified the participant for those supports.
Ms Jenkins became an NDIS participant in relation to a mobility issue following a knee replacement followed by an above knee amputation. She later brought a claim for medical negligence for injury (including the amputation) and recovered compensation as set out in a Deed. The CEO issued a recovery notice to the indemnifying insurer. It required most of the settlement amount that was paid under the terms of the deed to be paid to the Agency.
Ms Jenkins brought an internal review which upheld the decision to recover an amount from the settlement to be paid under the terms of the deed. She then sought external review the decision and in due course the ART affirmed the decision of the CEO to issue the recovery notice.
The available statutory review by the Federal Court is confined to a question of law. Ms Jenkins said that the relevant questions of law concern the construction and application of s 107 of the NDIS Act, a provision which concerns the circumstances in which past NDIS amounts may be recovered by the Agency when a participant receives compensation under a consent judgment or settlement.
Appeal ground 3: Did the Tribunal err by applying an incorrect threshold as to the causal link that was required under s 107(1)?
There were three grounds of appeal, however Ms Jenkins succeeded only in relation to the third – did the Tribunal err by applying an incorrect threshold as to the causal link that was required under s 107(1). At [96] the Court said:
The fundamental question raised by Ground (3) is whether the Tribunal properly undertook the statutory task of reasoning as to the required causative link between the compensation to be paid under the deed and a cause of action of the required kind. For reasons that have been given, if part of the settlement was in respect of some other kind of personal injury then it was necessary to determine the part of the compensation that was in respect of the personal injury of the required kind. The Tribunal could not affirm the decision to issue the recovery notice on the basis that to an extent the amount of compensation to be paid to Ms Jenkins under the deed was in respect of the required kind of personal injury. The whole of the amount sought to be recovered had to be of the required kind. This was the required threshold for establishing causation.
And at [104]:
… the Tribunal focussed upon whether the amount of compensation was to any extent for the amputation. At this point in the reasons this can be seen in the emphasis upon the ‘to any extent’ language which indicates that the Tribunal was approaching the causation aspect of its decision on the basis that any extent of connection between the claim made in the statement of claim and the compensation was an adequate foundation for the Agency to be able to issue the recovery notice to the indemnifying insurer. That is not what s 107(1) says.
Before the Tribunal, both parties accepted that the amputation was the cause. On the basis that s 107(1) was the relevant provision, the real issue for the Tribunal to determine was whether the compensation under the deed was ‘in respect of’ the amputation, an issue that the Tribunal appears to have incorrectly reframed as whether the compensation was to any extent for the amputation.
And then at [118]:
In order to apply s 107(1) it was necessary to consider what personal injury the compensation was ‘in respect of’. In particular, was there an amount of compensation in respect of the required kind of personal injury? The failure by the Tribunal to apply the statutory language as to causation meant that it failed to consider whether all of the amount of compensation the subject of the recovery notice was in respect of the required type of personal injury. The Tribunal did not consider whether there was an amount of compensation that was actually ‘in respect of’ a personal injury for which Ms Jenkins had received no amount as a participant in the NDIS, namely the injury in the form of the ongoing untreated infection which led to pain and suffering but no impairment through disability.
At [122] the court concluded that there was a fundamental respect in which the Tribunal failed to apply the causation terms of s 107(1) that has permeated its reasoning. Although it concluded that the compensation to be paid under the deed was to an extent for the amputation, that conclusion was insufficient for the Tribunal to be able to apply the statutory provisions. That is because the Tribunal had to reach a conclusion that there was an amount of compensation payable under the deed that was in respect of the required kind of personal injury. To conclude that the compensation was to an extent for the amputation meant that there remained the possibility that it was also to an extent for the personal injury in the form of the untreated PJI. There is no indication in the reasons of the Tribunal that it concluded that the compensation in the deed was to be paid only for the amputation. On the contrary, the Tribunal’s analysis and terminology shows that it proceeded on the legally incorrect premise that compensation that was to any extent for the amputation was compensation that could be the subject of a recovery notice. As has been explained that was a legally incorrect approach. (Italics added for emphasis.)
Outcome
There was no issue between the parties that if any of the appeal grounds were upheld, the appropriate outcome was for the proceedings to be remitted to the Tribunal for determination according to law.
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