FEDERAL COURT OF AUSTRALIA

Military Rehabilitation and Compensation Commission v Riley [2020] FCA 488

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The application for review be remitted to the Administrative Appeals Tribunal for redetermination according to law.

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

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

REASONS FOR JUDGMENT

GRIFFITHS J:

Introduction

1    The proceeding is an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). The appeal is from a decision dated 6 September 2019 by a Deputy President of the Administrative Appeals Tribunal (AAT). The applicant in the AAT, Mr Riley, sought compensation in respect of bladder cancer which he alleges was caused by his exposure to chemicals while he was working in the Royal Australian Navy (RAN) between 1967 and 1972. On 25 March 2015, a delegate of the applicant denied liability under the Safety, Rehabilitation and Compensation Act 1988 (Cth). That decision was affirmed by an internal review decision dated 2 March 2016.

2    Mr Riley appealed to the AAT. He was successful. The AAT found that he was entitled to compensation on the basis of the application of s 7(1) of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (Cth) (DRC Act) and Item 6 of the Safety, Rehabilitation and Compensation (Specified Diseases) Notice 2007 (1) (Notice).

3    In essence, the applicant in this Court (Commission) contends that the AAT misconstrued s 7(1) of the DRC Act, with particular reference to the different construction taken of comparable legislation by the High Court in Bird v The Commonwealth [1988] HCA 23; 165 CLR 1. This is the primary issue in the appeal.

4    Other issues are whether the AAT asked itself the wrong question and whether it also denied the applicant procedural fairness. I will elaborate upon those matters below.

Summary of background facts

5    In his compensation claim form, Mr Riley stated that he believed that his cancer was caused by “working as a painter, consuming contaminated drinking water, smoke contaminated environment work/living quarters”.

6    When he was working with the RAN, Mr Riley often worked on ship maintenance, including stripping paint, priming and painting. At certain times, approximately 70-80 percent of his working day was spent stripping paint. He used a “jason pistol”, which is a pneumatic tool designed to strip paint and rust without causing dangerous sparking. The jason pistol had vibrating copper rods which were covered with an alloy containing the heavy metal beryllium. When the rods came into contact with the painted metal surface of a ship, beryllium dust was created, particularly when the rods wore down.

7    Mr Riley did not wear any breathing apparatus, because none was supplied to him. Due to his work, he was frequently covered in beryllium dust as well as paint being removed from the surface of the ship.

The legislative context

Safety, Rehabilitation and Safety (Defence-related Claims) Act 1988 (Cth)

8    Section 14(1) of the DRC Act provides:

Subject to this Part, the Commonwealth is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.

9    Injury is defined in subsection 5A(1)(a) to include a disease suffered by an employee.

10    Subsection 5B(1) defines disease:

disease means:

(a)    an ailment suffered by an employee; or

(b)    an aggravation of such an ailment;

that was contributed to, to a significant degree, by the employee’s employment by the Commonwealth.

11    Subsection 4(1) defines “ailment” to mean:

any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development).

12    Section 7 of the DRC Act makes specific provisions relating to diseases. Subsection 7(1) provides:

Where:

(a)    an employee has suffered, or is suffering, from a disease or the death of an employee results from a disease;

(b)    the disease is of a kind specified by the Minister, by legislative instrument, as a disease related to employment of a kind specified in the instrument; and

(c)    the employee was, at any time before symptoms of the disease first became apparent, engaged by the Commonwealth employment of that kind;

the employment in which the employee was so engaged shall, for the purpose of this Act, be taken to have contributed, to a significant degree, to the contraction of the disease, unless the contrary is established.

Safety, Rehabilitation and Compensation (Specified Diseases) Notice 2007 (1)

13    The Notice specified that “the diseases in Column 2 and the employment in Column 3 of the Schedule are the specified diseases and the specified employments related to those diseases”. The Notice took effect from 1 July 2007.

14    The Schedule provided, in part:

15    The Notice was repealed by the Safety, Rehabilitation and Compensation (Specified Diseases and Employment) Instrument 2017 (Cth) (Instrument) which commenced on 3 October 2017. However, section 5 of that Instrument states that it “applies in relation to a disease that an employee sustains on or after the day this instrument commences”. It is therefore not applicable to this case.

The AAT’s decision summarised

16    The AAT identified the following four issues as requiring determination:

(a)    Has Mr Riley suffered from a disease within the meaning of s 7(1)(a) of the DRC Act?

(b)    If so, is the disease of a kind specified by the Minister as a disease related to employment of a kind specified?

(c)    If so, was Mr Riley engaged in employment of that kind at any time before symptoms of the disease first became apparent?

(d)    If so, is it established that the employment did not contribute, to a significant degree, to the contraction of the disease?

17    Each of these issues was determined in Mr Riley’s favour.

18    The critical issue for the purposes of the appeal is issue (b) above. After noting that the Minister had specified in the Notice “[d]iseases caused by beryllium or its toxic compounds”, the AAT stated at [22] that in arguing that there was no evidence to support a finding that beryllium causes bladder cancer the Commission had adopted an unduly narrow classification of the disease suffered by Mr Riley. The AAT explained that Mr Riley’s disease could be described with varying levels of specificity, whether that be bladder cancer or, more broadly as “cancer” or “malignant tumours”.

19    The AAT said at [24] (footnotes omitted):

The Notice is to be read in conjunction with the Act, which is beneficial legislation and should be interpreted accordingly. While the word “cancer” encompasses several conditions, not all of which involve the formation of malignant tumours, many cancers do involve the growth of such tumours. To interpret the word “disease” in this context as limited to a tumour at a specific site (e.g. bladder cancer or lung cancer) is an unwarranted limitation on the application of the beneficial provisions of the Act and, therefore, the Notice. In this regard, I note that Professor Fox refers to “bladder carcinoma” as an example of “solid tumours”. I will refer to his evidence in more detail later in these reasons.

20    The AAT accepted evidence given by a medical expert who was a clinical haematologist and medical oncologist, Professor Fox, that exposure to beryllium causes malignant tumours. Consequently, the AAT found at [26] that it was satisfied that the development of a malignant tumour is a disease within the meaning of Item 6 of the Notice and is therefore a disease “of a kind specified by the Minister” within s 7(1).

21    More broadly, with reference to Professor Fox’s evidence, the AAT noted that his evidence was that, while there was an increased risk of lung cancer in workers exposed to beryllium or beryllium compounds, there did not appear to be any evidence of any association with bladder cancer. The AAT stated at [35] that Professor Fox’s evidence went “no further than establishing that he is not aware of any evidence to support the proposition that there is a causative link between exposure to beryllium and the development of bladder cancer”. The AAT added that, for the Commission to avoid the application of the deeming provision in s 7(1), the AAT had to “be satisfied, on the balance of probabilities, that Mr Riley’s exposure to beryllium has not contributed, to a significant degree, to the contraction of the disease he suffered”.

22    The AAT concluded at [37] that, despite Professor Fox’s evidence, it was not satisfied on the balance of probabilities that Mr Riley’s exposure to beryllium has not contributed to a significant degree to his contraction of bladder cancer. Accordingly, the AAT concluded that the Commission had failed to establish that Mr Riley’s employment did not contribute, to a significant degree, to the contraction of the disease he suffered.

23    Mr Riley represented himself before the AAT. The Commission was represented by a solicitor. It appears that the AAT’s attention was not drawn to the High Court’s decision in Bird as there is no reference to it in the AAT’s reasons for decision.

The appeal

24    The notice of appeal identifies the following three questions of law (without alteration and noting that Mr Riley did not raise any objection to competency):

1.    Whether on the facts found, s 7(1) of the Safety, Rehabilitation and Compensation (Defence-Related Claims) Act, 1988 (the DRC Act) and Item 6 of the Safety, Rehabilitation and Compensation (Specified Diseases) Notice No 1 of 2007 (the 2007 Notice), properly construed, obliged the Tribunal to find that the bladder cancer suffered by Mr Riley was not a disease which was in fact caused by exposure to beryllium or its toxic compounds.

2.    Whether, in concluding, on the basis of findings of fact that exposure to beryllium may cause lung cancer and that both lung cancer and bladder cancer are malignant tumours, that any malignant tumour is a disease within the meaning of Item 6 of the 2007 Notice and therefore a disease within s 7(1) of the DRC Act, the Tribunal asked itself, and answered, the wrong question.

3.    Whether, in concluding that Mr Riley's bladder cancer was a malignant tumour and, as such, was a disease within the meaning of Item 6 of the 2007 Notice and therefore a disease within the meaning of s 7(1) of the DRC Act, the Tribunal denied the Commission procedural fairness.

The parties’ submissions summarised

25    To avoid duplication, I will address the parties’ relevant submissions in the next section of these reasons for judgment.

Consideration and determination

26    There are three elements in s 7(1) of the DRC Act, each of which must be satisfied before the claimant’s employment will be presumed to have contributed in a significant degree to the contraction of a disease.

(a)    The first element, in s 7(1)(a), requires the claimant to establish that he or she has suffered a disease and the disease has been identified. In the present case, there was no dispute that Mr Riley had previously suffered from bladder cancer and that that condition was a disease for the purposes of s 7(1).

(b)    The second element, in s 7(1)(c), requires the claimant to establish that, at any time prior to the symptoms of the disease becoming apparent, the claimant was engaged by the Commonwealth in employment of the kind specified in the Notice. In the present case, there was no dispute that Mr Riley’s employment as a member of the RAN involved “exposure to beryllium or its toxic compounds” and that he was engaged in employment of that kind before symptoms of his bladder cancer first became apparent.

(c)    The third element, in s 7(1)(b), requires that an employee suffer both from a disease of a kind specified in the Notice and that the disease is related to employment of a kind that is also specified in the Notice.

27    This third element is the controversial issue in the appeal. The applicant contends that the AAT’s finding at [26] that Mr Riley’s development of a malignant tumour is a disease within the meaning of Item 6 of the Notice and is therefore a disease of a kind specified by the Minister, involved a misconstruction of s 7(1). This contention must be accepted, principally because of the binding authority of Bird.

28    As Heerey J observed in Australian Telecommunications Corporation Ltd v Moffat [1992] FCA 105; 15 AAR 289 at [7], s 7(1) of the DRC Act is “relevantly indistinguishable” from the terms of s 30 of the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (1971 Act), which was the subject of consideration in Bird. Section 30 of the 1971 Act provided:

Without limiting by implication the operation of Section 29, where -

(a)    an employee has suffered or is suffering from a disease or the death of an employee results from a disease;

(b)    the disease is a disease of a kind specified in the regulations as a disease that is related to employment of a kind so specified; and

(c)    the employee was, at any time before symptoms of the disease first became apparent, engaged by the Commonwealth in employment of that kind,

then, for the purposes of this Act, unless the contrary is established, the employment in which the employee was so engaged by the Commonwealth shall be deemed to have been a contributing factor to his contraction of the disease.

29    Pursuant to this provision, reg 12 of the Compensation (Commonwealth Government Employees) Regulations (Regulations) provided:

For the purposes of section 30 of the Act, a disease of a kind specified in the first column of the First Schedule to these Regulations is related to employment of a kind specified in the second column of that Schedule opposite to the reference to that disease in the first column.

30    In Bird, the relevant item in the First Schedule was Item 4 of a group of 25 items. The First Schedule provided, inter alia, as follows:

FIRST SCHEDULE

DISEASES RELATED TO EMPLOYMENT

31    In Bird, the delegate found that Mr Bird had contracted a disease, namely right cervical node metastasis from carcinoma of the tongue. The delegate found that Mr Bird’s employment by the Department of Defence was a contributing factor to the contraction of that disease “by virtue of s 30” of the 1971 Act. Mr Bird had been a member of the Royal Australian Air Force and had fitted and removed canisters from aircraft which had collected radioactive air and dust samples after nuclear testing. He had subsequently serviced aircraft used in the testing and took part in their cleaning. The delegate did not make a finding that Mr Bird’s exposure to any radioactive substance was the cause of his condition, but simply found that the condition existed. The delegate proceeded on the basis that s 30 was sufficient to establish for the purposes of the 1971 Act that Mr Bird’s employment was a contributing factor to the condition.

32    The High Court majority (Mason CJ, Brennan and Toohey JJ) found that this involved error. The error is identified in the following extracts from the majority’s judgment at 5 to 6 (footnotes omitted, but emphasis added):

Paragraphs (a), (b) and (c) of s. 30 set out the conditions upon the satisfaction of which the section operates. When those conditions are satisfied the section deems “the employment in which the employee was ... engaged ... to have been a contributing factor to his contraction of the disease”, unless the contrary is established. This in turn brings the employee within s. 29 and imposes a liability on the Commonwealth to pay compensation: see s. 27(1). The purpose of s. 30, like the purpose of a similar provision considered in Connair Pty. Ltd. v. Frederiksen, is “to enable an employee to recover if he could show that the employment in which he was engaged involved a particular liability to, or a special risk of, contracting the disease from which he suffered, although he could not prove that he contracted the disease in the employment of the defendant employer” (per Mason J). An employee who cannot take advantage of the presumption in s. 30 may nevertheless be able to bring himself within s. 29 by showing that his employment by the Commonwealth was a “contributing factor” to the contraction of a disease or its “aggravation, acceleration or recurrence”. But s. 30 operates only when the employee has suffered or is suffering from a disease of a kind specified in the regulations. The primary question in this case is whether the disease from which the appellant was suffering “is a disease of a kind specified in the regulations”. The kinds of disease specified in the regulations for the purposes of s .30 are the kinds specified in the first column of the First Schedule to the regulations: reg.12.

In this case, the question is whether the disease which the appellant was found to have contracted is “a disease of a kind” specified in Item 4 of the First Schedule to the regulations. The words “disease of a kind” in par. (b) of s. 30 allow a description in terms more general than those which would identify a particular disease. The kind of disease specified in Item 4 is not a discrete pathological condition. It is any pathological condition which is in fact caused by one or other of the nominated substances; but it does not comprehend all pathological conditions which could be caused by the nominated substances. Unless it is found that the pathological condition was in fact caused by one or other of the nominated substances, condition (b) is not satisfied and s. 30 does not operate upon the facts of the particular case.

33    The majority noted at 7 that the respondent’s argument required that Item 4 be read as if words such as “of a kind” or “capable of being” appeared after the word “condition”. This was impermissible in the absence of the clear necessity to read words into that item. Having regard to the terms of Item 4 and the corresponding formulation used in Items 6 to 23, the majority found that Item 4 and s 30 “provide the causal link between exposure to or contact with radium or other radioactive substances or x-rays and a pathological condition which has in fact been caused by those substances”. The majority said that the Schedule did not require that the substances to which an employee was in fact exposed or in contact with during his employment be proved to be the actual cause of the poisoning or pathological condition from which a claimant is suffering. That necessity was avoided by the Schedule and s 30. But the majority held that the Schedule and s 30 required that the poisoning or pathological condition from which a claimant is suffering be caused by substances of the same description as those to which the employee was in fact exposed or in contact with during his employment.

34    Accordingly, while Mr Bird did not need to show that his exposure to radioactive substances in 1952 was the actual cause of his condition, he had to show that in fact he had a pathological condition caused by radium or other radioactive substances or by x-rays.

35    Justices Deane and Gaudron dissented. The essence of their reasoning is captured at 8:

There is nothing in the context provided by the other provisions of the Act or the Regulations which warrants or supports a reading down of what we see as the effect, as a matter of ordinary language, of the words of reg. 12 and item 4. To the contrary, to read the reference in Reg.12 to “a disease of a kind” specified in item 4 as connoting not the “kind” of pathological condition caused by exposure to radium or another radioactive substance but a pathological condition which is shown to have been actually so caused, is to ignore the significance of the heading of the first column of the Schedule, which is “Disease” and not “Kinds of Disease”, and of the context provided by s. 30 of the Act which operates upon the basis that the regulations will create a relationship between specified kinds of disease and specified kinds of employment.

36    There is no basis for distinguishing the majority’s reasoning in Bird. Even if it were accepted that the AAT found that the disease suffered by Mr Riley was not simply bladder cancer, but could be described more broadly as “cancer” or “malignant tumours”, there was no evidence that this broader description of the disease suffered by Mr Riley was in fact caused by exposure to beryllium. The highest evidence rose was that of Professor Fox, namely that exposure to beryllium may cause an increased risk of lung cancer. There was no evidence that Mr Riley had ever suffered lung cancer.

37    The central flaw in the AAT’s approach is that, applying Bird, the AAT had to be satisfied that the disease suffered by Mr Riley was caused by beryllium or its toxic compounds. As Heerey J stated in Moffat at [7], Bird requires that “before obtaining the benefit of the statutory reversal of onus under s 7(1) the respondent would have to show that his admitted mesothelioma was in fact caused by asbestos” (emphasis added). Accordingly, applying Bird, the proper construction of s 7(1)(b) required that the disease suffered by Mr Riley not merely be “a malignant tumour”, but a malignant tumour caused by exposure to beryllium or its toxic compounds. That provides a sufficient basis to allow the appeal.

38    I reject Mr Riley’s contention that the first question of law is not truly a question of law. In particular, I do not accept that the Commission’s challenge is properly characterised as a “fundamental disagreement with the basic facts found”. It is well established that the question whether or not facts fully found fall within the terms of a statutory provision, properly construed, is a question of law (see Hope v Bathurst City Council [1980] HCA 16; 144 CLR 1 at 7 and Collector of Customs (Tas) v Flinders Island Community Association [1985] FCA 232; 7 FCR 205 at 214 per Sheppard, Wilcox and Everett JJ).

39    If necessary, I would also uphold the second question of law, noting that, as the Commission correctly pointed out in its reply submissions, grounds 1 and 2 are “closely entwined”. This is because the AAT asked itself the wrong question. Rather than asking whether the disease suffered by Mr Riley was in fact caused by exposure to beryllium or its toxic compounds, it asked whether such exposure may cause a malignant tumour situated elsewhere in the body. Mr Riley acknowledged that the second question of law was “really a variation” on the first question of law.

40    Having regard to the applicant’s success on both questions of law 1 and 2, it is unnecessary to determine the third question of law, which relates to procedural fairness.

Conclusion

41    For these reasons, the appeal should be allowed. The matter should be remitted to the AAT for reconsideration according to law. The Commission contended that the matter should be remitted to a differently constituted AAT, particularly if it succeeded on question of law 3.

42    Mr Riley contended that the reconsideration should include consideration of other causes of bladder cancer which were raised by him but not determined by the AAT, in particular passive smoking. Even if that question had been determined in Mr Riley’s favour, that would not have provided a sufficient basis to order that the reconsideration be conducted by a different AAT member. That question is a matter ultimately for the President of the AAT.

43    The parties had agreed that the Commission will pay Mr Riley’s reasonable costs of the appeal, irrespective of the outcome.

Associate:

Dated:    16 April 2020