FEDERAL COURT OF AUSTRALIA

Comcare v Singh [2012] FCA 136

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The decision of the Administrative Appeals Tribunal in application 2010/3084 be set aside.

3.    Application 2010/3084 be remitted to the Administrative Appeals Tribunal for determination in accordance with law.

4.    The respondent pay the applicant’s costs of this appeal, as agreed or taxed.

5.    Pursuant to s 6(1) of the Federal Proceedings (Costs) Act 1982 (Cth), a costs certificate be granted stating that, in the opinion of the Federal Court of Australia, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of:

(a)    the costs incurred by the respondent in relation to the appeal, and

(b)    any costs payable to the applicant, Comcare, as a result of Order 4.

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

REASONS FOR JUDGMENT

1    The applicant, Comcare, appeals from a decision of the Administrative Appeals Tribunal (the AAT) in which, relevantly, the AAT set aside Comcare’s decision under s 37(7) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the Compensation Act). In that decision, Comcare decided that the respondent, Samuel Singh, had refused or failed, without reasonable excuse, to undertake a rehabilitation program, with the consequence that Comcare suspended Mr Singh’s compensation payments (Singh and Comcare [2011] AATA 533).

2    By s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) a “party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding”.

3    Comcare’s notice of appeal poses three questions as follows:

1.    Whether, on a proper construction of s 37(7) of the Safety Rehabilitation and Compensation Act 1988 the Tribunal was precluded from making a finding that the Respondent did not have a reasonable excuse for not continuing with a return to work plan, because the Respondent developed an anxiety state and his treating psychiatrist certified as to his unfitness for work.

2.    Whether the facts fully found by the Tribunal fell within the provisions of s 37(7), properly construed.

3.    Whether the Tribunal complied with its duty under s 43(2B) of the Administrative Appeals Tribunal Act 1975 to give reasons for concluding that it could not find that the Respondent did not have a reasonable excuse for not continuing to undertake a return to work plan.

4    To understand these questions it is necessary to consider the AAT’s decision.

THE AAT’S DECISION

5    At [1] of its reasons the AAT explained:

Before the Tribunal were two applications for review, namely:

Application 2010/1016 seeking review of a “reviewable decision” of 17 February 2010, which affirmed a prior determination of 2 October 2009 directing the Applicant to participate in a rehabilitation program commencing 7 October 2009; and

Application 2010/3084 seeking review of a “reviewable decision” of 9 July 2010 which affirmed determinations dated 1 and 9 April 2010. The determination of 1 April 2010 ruled that the Applicant had refused or failed to undertake a rehabilitation program, and that the Applicant’s rights to compensation were suspended pursuant to subsection 37(7) of the Safety, Rehabilitation and Compensation Act 1988 (“SRC Act”). The determination of 9 April 2010 denied payments of compensation to the Applicant, pursuant to s 19 SRC Act for the period 19 October 2009 to 19 February 2010.

6    The AAT identified the relevant provisions of the Compensation Act at [2], including the following parts of s 37:

(1)    A rehabilitation authority may make a determination that an employee who has suffered an injury resulting in an incapacity for work or an impairment should undertake a rehabilitation program.

…

(7)    Where an employee refuses or fails, without reasonable excuse, to undertake a rehabilitation program provided for the employee under this section, the employee’s rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the employee begins to undertake the program.

7    The AAT correctly identified the issues to be determined in these terms (at [3]):

(i)    Was the rehabilitation program the Applicant was directed to undertake a suitable program to direct the Applicant to undertake; and

(ii)    If yes to (i) above, did the Applicant have a reasonable excuse for failing to continue to undertake the said rehabilitation program.

8    The AAT dealt with the material before it, commencing at [4]. At [8] the AAT noted that:

By determination dated 12 September 2007, the Respondent accepted the Applicant’s claim for compensation, the compensable injury being stated as “adjustment reaction with mixed emotional features”.

9    After identifying other relevant facts concerning the efforts made to enable Mr Singh to return to work, the AAT (at [33]) recorded that:

The Applicant’s evidence was that he attended for work during the second week, namely the week commencing 12 October 2009 and was distressed to find that Mr Nadazdy was not there to support him and he began to have negative thoughts regarding his position and felt stressed. He lost his appetite, would wake up at 2:00am and could not go back to sleep. He saw Dr Stanley on 19 October 2009 who provided the Applicant with a certificate stating he was totally incapacitated for work. The Applicant has continued to receive certificates from Dr Stanley certifying his incapacity for work.

10    At [45] the AAT said:

That the Applicant was permitted to cease work in October 2009 was the decision of his treating psychiatrist Dr Stanley. We were unimpressed with Dr Stanley’s evidence as it became clear that Dr Stanley had become an advocate for his patient. Furthermore, particularly given the contents of the documents that became Ex R 6, we are satisfied that Dr Stanley has permitted his professional judgement to be influenced by what the Applicant perceives to be in his own interests.

11    The AAT added to this at [51] saying that:

As stated above we do not accept Dr Stanley’s evidence as objective opinion…

12    At [52] the AAT recorded the following:

We are satisfied given the duties performed by the Applicant as an officer at APS6 level prior to 2006 and his own self-assessment as having wide ranging features such as communication, results orientation, stakeholder management, personal drive and responsibility, autonomy, decision making, self-development etc (see Applicant’s email of 17 September 2009 to Ms Damar), that the RTWP [return to work program] dated 2 October 2009 was entirely suitable for the Applicant to undertake.

13    The AAT then said:

[53] Both Dr Champion and Dr Phillips assessed the Applicant as having obsessional character traits. What is abundantly clear is that the Applicant was only prepared to return to work at the ATO on his terms. When he was unable to do this that fact combined with the other difficulties he was experiencing with the ATO induced in him an anxiety state.

[54] As pointed out by Dr Champion, the correct treatment would have been to have given support to the Applicant to work through the perceived difficulties whilst remaining in the workforce, but instead the Applicant attended upon Dr Stanley and Dr Stanley certified him as unfit for work.

…

[56] Here the Applicant developed an anxiety state (albeit mild) because he was not prepared to undertake a reasonable RTWP. His failure to continue to undertake the program was aided and abetted by his treating psychiatrist Dr Stanley who was prepared to certify his unfitness for work.

[57] All medical professionals who have given opinions in this matter do not doubt that the Applicant did develop an anxiety state; they differ in their views as to its mode of treatment and duration. As the Applicant did develop an anxiety state and that his treating psychiatrist certified as to his unfitness for work, we cannot find that the Applicant did not have a reasonable excuse for not continuing with his RTWP, even though that excuse was one manufactured by him.

[58] The net result of our findings is that the decision in matter 2010/1016 is affirmed and the decision in matter 2010/3084 is set aside and remitted to the Respondent.

SUBMISSIONS

14    Comcare submitted that: - (i) in the absence of any explanation by the AAT for its apparent rejection of Dr Champion’s opinion, it can only be concluded that the AAT regarded itself as bound to treat the medical certificate from Dr Stanley as if it were conclusive evidence, despite the AAT’s apparent rejection of Dr Stanley’s evidence, (ii) if this is so, the AAT acted in a manner inconsistent with its obligation to conduct a merits review including in respect of the question whether Mr Singh’s refusal or failure to undertake the rehabilitation program was “without reasonable excuse”, (iii) nothing in the AAT’s reasons casts light on the finding at [57] that “[a]s the Applicant did develop an anxiety state and that his treating psychiatrist certified as to his unfitness for work, we cannot find that the Applicant did not have a reasonable excuse for not continuing with his return to work program (RTWP), even though that excuse was one manufactured by him”, (iv) the principles that the AAT is not required to be exhaustive in its reasons and that its reasons should not be scrutinised too closely with an eye to finding error are accepted, but beside the point; the finding, in context, cannot be understood as a mere finding of fact, and (v) there is no requirement that the questions in the appeal be enunciated as “pure” questions of law as opposed to questions of law.

15    Mr Singh submitted that: - (i) Comcare’s questions are not pure questions of law, (ii) the questions leave open the possibility that the finding in [57] is one of fact, and this conclusion should be drawn in the context of the reasons as a whole, (iii) the consequence is that Comcare cannot succeed unless this Court concludes it is impossible for the finding in [57] to be a finding of fact, (iv) even if there is some room for argument about the meaning of what the AAT said, this would only serve to illustrate that Comcare has not enunciated a pure question of law, (v) hence, an answer to question 1 does not assist Comcare, (vi) Comcare does not argue that it was not open to the AAT to find that Mr Singh acted with reasonable excuse so the answer to question 2 must be “yes”, (vii) question 3 is a mixed question of fact and law because it cannot be answered without first finding or assuming a position about whether the AAT’s finding in [57] was one of fact or law, and (viii) the AAT’s reasons are “abundantly clear” when considered in context. It was also submitted for Mr Singh that a “reasonable excuse” is one that merely has some rational foundation, in the sense of not being irrational.

DISCUSSION

16    The submissions for Mr Singh have a superficially persuasive quality. However, analysis of the submissions does not bear this out. Leaving aside questions 1 and 2 in the notice of appeal for the moment, question 3 asks whether the AAT complied with its duty under s 43(2B) of the AAT Act to give reasons for concluding that it could not find that Mr Singh did not have a reasonable excuse for not continuing to undertake a RTWP.

17    Section 43(2B) provides as follows:

Where the Tribunal gives in writing the reasons for its decision, those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.

18    Section 43(2) is also relevant and is in these terms:

Subject to this section and to sections 35 and 36D, the Tribunal shall give reasons either orally or in writing for its decision.

19    Perram J considered these provisions in Civil Aviation Safety Authority v Central Aviation Pty Ltd (2009) 253 ALR 263; [2009] FCA 49 (a decision which was reversed on appeal in Civil Aviation Safety Authority v Central Aviation Pty Ltd (2009) 179 FCR 554; [2009] FCAFC 137 but on a limited ground relating to Perram J’s decision to set aside only the AAT’s reasons and not its decision). Perram J, at [29], noted that s 43(2B) has been held to require “the Tribunal to do no more than to state the findings which it has actually made. It does not require the Tribunal to make the findings which it ought to have made”. At [30] Perram J said:

The issues which arise from s 43(2) are more subtle. There is no doubt it requires the Tribunal to provide reasons which are adequate. There is also little question but that the question of adequacy, in the present circumstances, directs attention at least to the efficacy of the appeal process contemplated by s 44. The reasons must be at least sufficient in quality to permit that appeal process to be efficacious. However, the appeal process under s 44 is subject to the constraint that there be present a “question of law”. Debate exists as to whether a failure to provide reasons is an error of law. There is an obiter dictum of Brennan J in Repatriation Commission v O'Brien (1985) 155 CLR 422 at 445–6 which suggests that a failure by the Tribunal to provide adequate reasons does not result in the invalidity of its decision and that the proper remedy is a mandatory order that reasons be provided. That view has not prevailed in this Court where it has instead been held that a failure to provide adequate reasons is an error of law: Dornan v Riordan (1990) 24 FCR 564 at 573 per Sweeney, Davies and Burchett JJ. The contrary view is set forth in Comcare v Lees (1997) 151 ALR 647 at 658–9 by Finkelstein J. The existence of the debate about the correctness of Dornan has been noted on a number of occasions by Full Courts of this Court, but none have thought it necessary to resolve it.

20    At [34] Perram J concluded about this issue:

…as I have said, the question of whether the Tribunal’s reasons are adequate is a “question of law”. More formally, the question is whether the Tribunal has complied with its statutory duty under s 43(2) of the AAT Act. That is, without any doubt, a question of law.

21    The Full Court at [50] also made this observation:

Common to the conclusions expressed in O’Brien by Brennan J and by the Full Court in Dornan remains the prospect of setting aside a decision of the Tribunal in circumstances where the inadequacy in the reasons permits an inference that the decision-making power has not been exercised in accordance with law, or where the deficiency is such that it is impossible to ascertain whether there was any other error in the decision-making process. In such circumstances it may be doubted whether there is such a stark difference in result as may have been assumed between the approach of Brennan J in O’Brien and that of the Full Court in Dornan.

22    Consistent with the approach of Perram J and the Full Court as set out above, I proceed on the basis that an alleged failure to give reasons in accordance with either ss 43(2) or 43(2B) of the AAT Act (recognising that the construction of each is affected by the other) involves a question of law. In the present case Comcare relies on s 43(2B). This is appropriate. Comcare’s case is that the AAT made a finding (that Mr Singh’s refusal or failure was not “without reasonable excuse”) but did not provide reasons for that finding as required by s 43(2B). I am also satisfied that the third question posed by Comcare in the notice of appeal is appropriately drafted as a pure question of law.

23    The difficulty for Mr Singh is exposed in his own submissions. In particular, in answer to question 3, which raises the issue of the adequacy of the reasons, the submissions for Mr Singh are that the question is not a pure question of law because the question cannot be answered without first finding or assuming that the AAT was intending to draw a conclusion of law and was not making a finding of fact. This, however, is the essence of the inadequacy of the AAT’s reasons. Read in context, without any inappropriate expectation of an exhaustive set of reasons or an eye attuned to the finding of error, the AAT’s conclusion at [57] remains inscrutable. It may be that the AAT was merely making a factual finding. If this is so, however, it is difficult to understand some of its other interim findings, particularly those to the effect that the RTWP was “entirely suitable” for Mr Singh (at [52]) and that Dr Stanley was an advocate for Mr Singh whose evidence the AAT did not accept (at [45] and [51]). These findings were relevant not only to the suitability of the rehabilitation program, but also the “without reasonable excuse” issue. It may be that the AAT was drawing a conclusion of law. This is supported to some extent by the use of the word “cannot” in the key finding in [57] and the fact that the AAT found the RTWP suitable and rejected Dr Stanley’s evidence.

24    It may be accepted, as the submissions for Mr Singh put it, that the AAT made what might be termed interim factual findings in the preceding paragraphs which would have left it reasonably open to the AAT to ultimately find, as a matter of fact, that Mr Singh had not acted “without reasonable excuse”. While that ultimate finding would have been reasonably open on the facts as found, it is not apparent that the AAT reasoned from the interim findings to the ultimate finding in the way the submissions for Mr Singh put it. This is not a case of focusing on a few words or mere infelicitous drafting. The words at [57] are the entire explanation of the ultimate finding. Insofar as it is necessary to say so, I do not accept that the status of the presiding member of the AAT (apparently, a legally qualified person) should lead to a more beneficial construction of the AAT’s reasons than would otherwise be the case. In all cases, reasons of an administrative decision-maker are not to be subject to over-zealous scrutiny. I should also say that I do not accept that a reference to the transcript can overcome the inadequacy of the AAT’s reasons.

25    The relevant point is this: it is simply impossible given the state of the AAT’s reasons to know whether it was making a factual finding or drawing a conclusion of law. If the latter, the AAT undoubtedly erred. The mere fact that Mr Singh did develop an anxiety state and that Dr Stanley certified his ongoing unfitness for work did not mean that the AAT could not find that Mr Singh acted “without reasonable excuse”. Given the other findings of the AAT, particularly about the RTWP being suitable and Dr Champion’s approach being “the correct treatment” (involving Mr Singh returning to work), it would have been reasonably open to the AAT to find that Mr Singh acted without reasonable excuse. If the former, the reasons for the AAT’s conclusion remain inexplicable. It might be that the AAT considered that, notwithstanding the suitability of the RTWP and Dr Champion’s evidence, the very facts that Mr Singh had developed an anxiety state and Dr Stanley had certified him as unfit for work, led to the conclusion that Mr Singh did not act “without reasonable excuse”. This conclusion also would have been reasonably open to the AAT. But this involves mere speculation. It is not possible to glean from the AAT’s reasons whether it considered it was making a factual finding or drawing a conclusion of law. This demonstrates the inadequacy of the AAT’s reasons. It means that question 3 must be answered “no”.

26    In the course of my process of reasoning, I have also answered question 1, to which the answer is “no”. The AAT was not precluded from making a finding that Mr Singh did not have a reasonable excuse for not continuing with a RTWP because Mr Singh developed an anxiety state and his treating psychiatrist certified as to his unfitness for work. Strictly speaking, however, this question does not arise in the appeal because of my approach to question 3. As to question 2, the necessary answer is that it cannot be answered because the AAT did not fully find the facts or, more to the point, if the AAT did so it did not explain the facts it found in its reasons.

27    It is also convenient to observe here that I should not be taken as accepting the propositions put for Mr Singh that the phrase “without reasonable excuse”, in the context of s 37(7), requires nothing more than an excuse which has some rational foundation, as opposed to one which is irrational, considered from the perspective of the employee. No authority was cited for this approach. It is not supported by the concept that the reason must be “personal to the employee”, discussed in Telstra Corp Ltd v Administrative Appeals Tribunal (2003) 37 AAR 40; [2003] FCA 102 at [11] and Pascoe v Australian Postal Corporation (2004) 77 ALD 464; [2004] FCAFC 4 at [18] – [21], the latter of which also emphasises the need for the AAT to “evaluate the reasonableness of any excuse presented…” (at [21]). On first consideration, the submission put for Mr Singh would seem to give no work to the qualification of “reasonable” which generally involves an element of objectivity, even if applied in the circumstances as known to the employee at the time. It cannot be, however, that the subjective state of mind of the employee is the sole dictate of what is a reasonable excuse provided that there is some rational foundation for the employee’s state of mind. As I did not hear argument on this issue it is inappropriate to say more.

28    I am satisfied that the appeal should be allowed and the decision of the AAT in application 2010/3084 set aside, with consequential orders for remittal to the AAT for determination of that application. The decision in 2010/1016 is not affected by these orders.

Associate:

Dated:    27 February 2012