FEDERAL COURT OF AUSTRALIA

Hollis v Comcare [2017] FCA 558

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The decision of the Administrative Appeals Tribunal dated 24 January 2017 be set aside.

3.    The matter be remitted for rehearing according to law before a differently constituted tribunal.

4.    Unless the Tribunal otherwise orders or the parties agree, except for additional medical evidence, the rehearing be conducted on the evidence adduced in the previous hearing.

5.    The respondent pay the applicant’s costs as agreed or taxed.

THE COURT NOTES THAT:

6.    The decision is set aside on the agreed basis that the Tribunal failed to consider, in accordance with the decision in Comcare v Martin [2016] HCA 43; (2016) 91 ALJR 29 at [42]–[47], whether in relation to the instances it identified of “reasonable administrative action”, the applicant would not have suffered from her disease or its aggravation if that action had not been taken.

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

REASONS FOR JUDGMENT

1    Janelle Hollis was a Commonwealth employee for some 22 years. In October 2013 she lodged a claim for compensation for anxiety and depression, which she attributed to a number of events at her workplace over an 11-month period. Her right to compensation is governed by the terms of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act). Generally speaking, compensation is payable in respect of an injury suffered by an employee if the injury has certain consequences, including if it results in incapacity for work (s 14), and/or the need for medical treatment (s 16). “Injury” includes, relevantly, a disease or a mental injury arising out, or in the course, of the employee’s employment. It also includes an aggravation of a disease or a mental injury where the aggravation arises out, or in the course, of the employee’s employment. But it does not include a disease, injury or aggravation suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee’s employment: SRC Act, s 5A(1). “Disease” means an ailment or an aggravation of such an ailment “that was contributed to, to a significant degree, by the employee’s employment by the Commonwealth”: SRC Act, s 5B(1).

2    Comcare accepted that Ms Hollis had suffered from an injury in the nature of anxiety and depression but disallowed her claim on the basis that the injury preceded the workplace events and, to the extent that her employment was an aggravating factor, the workplace events that significantly contributed to the aggravation involved “reasonable administrative action”.

3    At Ms Hollis’s request, Comcare reconsidered its decision, but the outcome was no different. Ms Hollis applied to the Administrative Appeals Tribunal for review of the reconsideration decision. On the review, Ms Hollis had a measure of success. Senior Member Taylor found that she suffered “the aggravation of an ailment” in about September 2012 to which her employment made a significant contribution, that the aggravation was an injury for the purposes of the SRC Act and for that reason set aside the decision under review and remitted the matter to Comcare for determination in accordance with the Tribunal’s reasons. The difficulty for Ms Hollis was twofold. First, the Senior Member considered that the aggravation was short-lived. Secondly, he found that four of the five work episodes upon which she relied constituted “reasonable administrative action taken in a reasonable manner”, that the conditions from which she suffered following each of them resulted from that action, and that they were not therefore injuries for the purposes of the Act.

4    Ms Hollis appealed. In her notice of appeal she alleged that the Tribunal made a number of legal errors. Following the publication of the judgment in Lim v Comcare [2017] FCAFC 64, Comcare accepted that the Tribunal erred in one important respect, that the appeal must be allowed, and that the matter must be remitted to the Tribunal. Two matters remain in dispute: the scope of the remittal and the constitution of the Tribunal. Comcare submitted that there should be only a partial remittal. Ms Hollis submitted that there should be no limit and that the Court should order that the matter be heard by a differently constituted tribunal.

5    I am satisfied that the appeal should be allowed and the matter remitted to the Tribunal for reconsideration according to law. As Comcare acknowledged and I accept, the Tribunal erred in law by applying the wrong test for determining whether Ms Hollis’s injury was suffered “as a result of” reasonable administrative action. In particular, the Tribunal failed to consider whether Ms Hollis would not have suffered the injury if the administrative action had not been taken: see Comcare v Martin [2016] HCA 43; (2016) 339 ALR 1; 91 ALJR 29. This is the error identified in para 2(a) of the amended notice of appeal.

6    Quite properly, neither party asked the Court to determine the remaining grounds of appeal. As RD Nicholson J pointed out in Industry Research and Development Board v IMT Ltd [2001] FCA 85 (IRDB) at [22], unless there is a particular reason to do so, an appellate court which upholds an appeal on one ground will not address the remaining grounds. That is most definitely the case when the appeal is allowed by consent.

7    As for the questions in dispute, having considered the competing submissions and carefully weighed the pros and cons, I have decided that the preferable course is to remit the matter for hearing before a differently constituted tribunal without the limitation proposed by Comcare.

8    The powers of the Court on appeal are extremely broad. Upon the determination of the appeal the Court “may make such order as it thinks appropriate by reason of its decision”: Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), s 44(4). That includes an order, relevantly, remitting the case to be heard and decided again by the Tribunal, either with or without hearing further evidence, in accordance with the directions of the Court: s 44(5). If an order for remittal is made, the Tribunal need not be constituted for the hearing by the person who made the decision under appeal and, regardless of whether the Tribunal is reconstituted, the Tribunal may have regard to any record of the proceeding as long as doing so is not inconsistent with the directions of the Court: s 44(6). In the absence of an order that the matter be heard by a differently constituted tribunal, the matter is left to the President of the Tribunal who has the power to give directions as to who is to constitute the Tribunal: s 19A.

9    It follows that either of the courses proposed by the parties is open to the Court. The question is which is the more appropriate in the particular circumstances of this case.

10    Comcare argued that there is no reason in the present case why the Court should make a general remittal order and good reason to limit the order. The order it sought is that the matter be remitted to the Tribunal to be re-heard “to the extent necessary in order for it to decide, according to law”, whether, in relation to the instances of “reasonable administrative action” that it identified:

(a)    [Ms Hollis] would not have suffered “an ailment” [or the aggravation of such an ailment] if the specified instances of “administrative action” had not been taken; or

(b)    if [Ms Hollis] would still have suffered “an ailment” [or the aggravation of such an ailment], that ailment [or the aggravation of such an ailment] would not have been contributed to, to a significant degree, by [her] employment if the specified instances of “administrative action” had not been taken.

11    Comcare also sought a direction that the Tribunal have regard to the evidence that has already been given in the proceeding and receive further evidence limited to that question, only if it considers it appropriate to do so. In substance, this was the order made by the Full Court in Lim.

12    Comcare argued that a number of practical and legal considerations favour a limited remittal.

13    First, Comcare pointed out, the hearing before the Tribunal extended over four days during which six witnesses were called and cross-examined at length, hundreds of pages of exhibits were tendered, more than 100 pages of submissions were filed. Furthermore, the Tribunal gave extensive and detailed reasons. Comcare submitted that the agreed error does not require that all the facts and matters in dispute in the original proceedings be revisited. The question of what, if any, further evidence might be necessary to deal with the issue which remains to be resolved should be left to the same Tribunal. That is what happened in Lim.

14    Secondly, Comcare submitted that the Court’s obligations under s 37M of the Federal Court of Australia Act 1976 (Cth) (FCA Act) “suggest the requirements this Court imposes upon the parties and the Tribunal should not be more expansive or burdensome than what is necessary to address the error of law that has been identified at this stage”. Comcare also submitted that the introduction into the AAT Act of s 44(7)–(10) to enable the Court to make findings of fact on an appeal in certain circumstances and to receive additional evidence to that end “further supports the Court confining the matter remitted to the Tribunal to the error of law that, at this stage, is apparent”.

15    Section 37M of the FCA Act relevantly requires that any statutory power with respect to the practice and procedure of the Court must be exercised in the way that best promotes the overarching purpose of the civil practice and procedure provisions conferred upon the Court. That purpose is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. It includes the objective of resolving disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. Having regard to the overarching purpose, Comcare submitted that the parties should not be put to the expense, and their witnesses to the likely stress and inconvenience, of another hearing unless and until it becomes apparent that it is necessary to do so to address any other legal errors made by the Tribunal.

16    There is force in some of these submissions.

17    The position urged on the Court for Ms Hollis for an unlimited remittal is based on the following propositions.

18    First and most importantly, there are several other grounds of appeal that have not been dealt with and “the potential for further grounds exists”. If those other grounds are not dealt with by this Court, then they will necessarily become the subject of reconsideration by the Tribunal in the remitted proceedings. Unless the Court was to order that the matter be remitted to a differently constituted tribunal, “a serious problem would arise”.

19    Secondly, consideration of the question posed in Comcare v Martin will require a reconsideration of the previous Tribunal’s criticisms of the psychiatric evidence and a re-examination of the subsequent episodes of depression and their relationship with the episode which occurred in 2012. This will require additional psychiatric evidence and arguments.

20    Thirdly, the Tribunal made findings that reflected adversely on Ms Hollis’s credit, despite the fact that Comcare did not submit that such findings be made and in one instance rejecting evidence which was not contradicted by the only two people in a position to do so, neither of whom Comcare called as witnesses. The Tribunal also used belittling and “forceful” language.

21    Fourthly, on some legal issues, the Tribunal failed to give Ms Hollis’s submissions fair and adequate consideration. In one instance the Tribunal not only failed to deal with the submission but failed to refer to it. That means it will have to be dealt with again on the remittal and this, too, raises a serious issue relating to the constitution of the Tribunal.

22    Fifthly, the Tribunal was only required to determine whether Comcare was liable to pay compensation in respect of an injury. Yet, it expressed the view that the episode of depression in 2012 had resolved within a short period (at [97]). In most cases this would be of little significance because “the operative determination made in such cases is generally that the Applicant is entitled to compensation under s 14 in respect of a disease suffered on a particular date”. In the present case, however, the Tribunal specified that Comcare reconsider Ms Hollis’s claim in accordance with its reasons.

23    Ms Hollis relied on the same reasons in support of her application for an order that the Tribunal be differently constituted.

24    A number of these arguments are unpersuasive.

25    As to the first, there was a limited remittal order in Lim notwithstanding the fact that there were other grounds which were not dealt with. Furthermore, one would not expect the matters raised by the other grounds to be the subject of a reconsideration on the remittal. Indeed, it is highly unlikely that the Tribunal would entertain any application to revisit the findings they challenge.

26    I am not in a position to assess the fourth point which, in any case, is not raised in the notice of appeal.

27    Turning to the fifth, the Senior Member’s conclusion that the effects of the workplace events on the episode of depression in 2012 were short-lived was not, as Ms Hollis contended, gratuitous. In determining whether she would have suffered an injury but for the various instances of administrative action, whether it had an enduring effect was very relevant. Indeed, Ms Hollis’s second point acknowledges as much.

28    I accept Ms Hollis’s submission that the Senior Member made adverse credit findings and that the language the Senior Member used was unnecessarily demeaning. At [21] and [24] he described Ms Hollis’s interpretation of the significance of an email as seemingly “unrealistic and contrived” and her complaints about an email exchange as “specious”. At [42] he accepted her evidence that she regarded the participation of a former employee in an indigenous training program as raising an “ethical issue” and that her view was “consistent with her belief in an overarching policy intention – that publicly funded indigenous employment programs were directed at disadvantaged and unemployed indigenous people”. At the same time, however, he described her refusal to recommend his inclusion in the program as “knowingly [defiant]” of her supervisor’s instruction (at [41]). See also [42] where he described her conduct as “sustained defiance” and at [54] as “knowingly and persistently [defiant]”. At [138] he characterised her unwillingness to comply with the direction as “wilfully, persistently, wrongly, and unjustifiably” failing to properly do her job. Moreover, at [40] he described her recollection of the sequence of certain events as “highly motivated by her own self-interest” and her insistence that she had not processed a payment as “not credible” and “unreliable” when Comcare’s own case was that she had not done so.

29    These matters, of themselves, would not justify an unlimited remittal. They are however, relevant to the question of the constitution of the Tribunal. If an order were to be made for a differently constituted tribunal to hear the case, then it is preferable, it seems to me, not to tie the hands of the Tribunal by limiting the terms of the remittal.

30    On this question, Comcare argued that the preferable course was to leave it to the discretion of the President. It referred to Comcare v Broadhurst (2011) 192 FCR 497at [4] in which Downes J, then the president of the AAT, stated, without reference to s 44 or to any authority, that it is generally inappropriate for the Court to give any directions on remittal as to how the Tribunal should be constituted on a rehearing.

31    Whatever the general position, as I have heard full argument on the matter, the parties should not be put to the expense and effort of making the same submissions to the President. Having regard to the terms of s 44, however, I do not consider that there can be any such general position. Indeed, in Broadhurst itself (at [89]) the other members of the Court, Tracey and Flick JJ referred to a number of authorities in which it has been said that the usual position is otherwise.

32    In Northern NSW FM Pty Limited v Australian Broadcasting Tribunal (1990) 26 FCR 39 at 43 for example, Davies and Foster JJ said that when a decision is set aside in toto and an order is made for the matter to be remitted to be heard and decided again “justice is in general better seen to be done if … the Tribunal is reconstituted for the purposes of the rehearing”. Earlier, at 42–43 their Honours observed:

If a decision has been set aside for error and remitted for rehearing, it will generally seem fairer to the parties that the matter be heard and decided again by a differently constituted tribunal.  This is because the member constituting the Tribunal in the original inquiry or hearing will already have expressed a view upon facts which will have to be determined in the rehearing.  The aggrieved party may think that a rehearing before the Tribunal as originally constituted could be worthless, for the member’s views have been stated.  Thus, if a decision of the Administrative Appeals Tribunal has been set aside and the matter remitted for rehearing, the President of that Tribunal ordinarily allocates to the rehearing a different member of the Tribunal.  There are, of course, cases where it is convenient for the Tribunal as previously constituted to deal with the matter.  And occasionally the Court itself expresses such a view, so as to make it clear that it would not be improper for the Tribunal as previously constituted to consider the matter again. 

33    Davies J was a former president of the Tribunal.

34    Notwithstanding these remarks, which were not expressly disapproved in Broadhurst, I respectfully agree with the observation made by Tracey and Flick JJ in that case at [94] that the manner in which the discretion should be exercised in any particular case should depend on the facts and circumstances of that case and should not be constrained by any presumptive or pre-ordained rule of thumb.

35    In the present case, a number of factors should be weighed in the balance.

36    If the matter were to be remitted to the Tribunal on the limited basis sought by Comcare, and the Senior Member, having asked himself the right questions, found in Ms Hollis’s favour, the other grounds of appeal would be academic. If, having asked himself the right questions, he was still to find against Ms Hollis, it is common ground that she could agitate the remaining grounds on appeal. While it is true, as Ms Hollis argued, that there is no evidence that an order remitting the matter to be heard by a differently constituted tribunal would take substantially longer or consume substantially more resources than if the matter were remitted to the same Tribunal, common sense would indicate that that is so. The Senior Member is familiar with it. All he need do is refresh his memory. Any new member would have to start from scratch.

37    There have already been four days of hearing in the Tribunal during which a number of witnesses gave evidence. Even if the parties agreed to a reconstituted tribunal determining the matter on the transcript, with or without additional evidence, that tribunal would not have had the benefit of seeing and hearing from the witnesses and, in particular, Ms Hollis. If there truly was no credit issue, however, that would not seem to be a problem. If there was and it only affected her, then only she would need to be called.

38    I was assured by both parties, however, that Comcare never suggested that Ms Hollis was dishonest. Yet there was a credit issue. Comcare contended that her evidence was unreliable. That said, neither party contended that the assessment of her reliability turned on her demeanour in the witness box. Both were content to have her evidence evaluated on the papers.

39    I accept, as Comcare submitted, that the parties should not be put to the expense, and their witnesses the likely stress and inconvenience, of a general rehearing unless it becomes apparent that this is necessary to address any other legal error made by the Tribunal. No such consequences will arise, however, if the hearing is confined to the papers save to the extent that it is necessary to deal with the point upon which the appeal is to be allowed.

40    I appreciate that the Full Court in Lim limited the remittal, but that was a very different case.

41    In IRDB, as in this case, the respondent conceded that the Tribunal made an error of law in relation to one of several grounds of appeal (four in that case, five in this) and that the appeal should be allowed for that reason. The agreed error was that the Tribunal failed to make an express finding as to whether the respondent’s activities were innovative or involved technical risk. RD Nicholson J said at [40]:

Approaching the matter in terms of these authorities I start from the usual position that remission to a differently constituted tribunal is the ordinary way to proceed. There are factors which make that inconvenient and those factors relate to the volume of evidence previously heard. To set against that is the consideration that it is open to either of the parties upon remission to a differently constituted tribunal to make submissions to that tribunal on the degree to which evidence given to the former tribunal may be utilised without recall by the differently constituted tribunal. Critically, however, this is a case involving credibility findings ... While it is the case here that there was no express finding of the credibility of a party or a major witness, it is clear that the Tribunal has in fact formed views in relation to that credibility or else it could not have arrived at the determination which it made. Additionally, this is a case where the existence of credibility issues was expressly recorded by the Tribunal. Those considerations make it apparent that the ordinary practice should apply.

42    IRDB is not on all fours with the present case. Moreover, I do not start from the same premise. Nevertheless, ultimately I am persuaded for similar reasons that the preferable course is for the matter to be remitted to a differently constituted tribunal and for there to be no limitation on the remittal except as to the mode of trial. The firm views apparently held by the Senior Member concerning Ms Hollis’s credibility are such that I have reached the conclusion that justice will better be seen to be done and the overall costs of the dispute potentially minimised if the matter is heard afresh before a differently constituted tribunal. In order to contain the costs of that process, I propose that, apart from allowing the parties to call additional medical evidence to deal with the Comcare v Martin point, which it is common ground will be required, the rehearing should be conducted only on the evidence adduced at the original hearing, unless the newly constituted tribunal otherwise orders or the parties agree.

43    Ms Hollis applied for the costs of the appeal. Comcare did not oppose an order for costs, provided the costs were limited to those necessarily incurred in, or reasonably related to, the preparation of the amended notice of appeal, which, it contended, “first sufficiently identified the agreed error of law disclosed by the decision of the Tribunal”. In my view there should be no such qualification. Any dispute as to the reasonableness of the costs claimed, if not agreed as I would hope, can be aired on taxation.

Associate:

Dated:    26 May 2017