JUDGMENT No. sseucd Soul ood tree CATCHWORODS ADMINISTRATIVE LAW - denial of natural justice of workers compensation payments - termination whether person incapacitated - decisions of Administrative Appeals Tribunal based on own observations of person - failure to inform party of observations Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 Marelic v Comcare (1993) 18 AAR 392 Australian Postal Commission v Idriss (1992) 26 ALD 257 Australian and Overseas Telecommunications Corporation Ltd v McAuslan, (1993) 47 FCR 492 No. NG 788 of 1993 JOSEPH FARAH v AUSTRALIAN POSTAL CORPORATION MOORE J SYDNEY 11 OCTOBER 1994 RECEIVED 11 OCT 1994 FEDERAL COURT OF AUSTRALIA PRINCIPAL REGISTRAR IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 788 of 1993 ) ) GENERAL DIVISION BETWEEN: JOBEPH FARAH Applicant AND: AUSTRALIAN POSTAL CORPORATION Respondent JUDGE: Moore J PLACE: Sydney DATE: 11 October 1994 ORDER OF THE COURT THE COURT ORDERS THAT: 1. The proceedings stand over to a date to be advised for the bringing in of short minutes to give effect to the Reasons for Judgment delivered today. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN Tf FED: COURT OF AJ: LIA NEW SOUTH WALES DISTRICT REGISTRY No. NG 788 of 1993 GENERAL DIVISION Sd BETWEEN: JOSEPH FARAH Applicant AND: AUSTRALIAN POSTAL CORPORATION Respondent JUDGE: Moore J PLACE: Sydney DATE: 11 October 1994 REASONS FOR JUDGMENT This is an application by way of appeal, so styled, under s44 of the Administrative Appeals Tribunal Act 1975 against a decision of the Administrative Appeals Tribunal ("the Tribunal") of 15 September 1993. The decision affirmed a determination by a delegate of the Australian Postal Corporation ("the respondent") that had terminated payments to Mr Joseph Farah ("the applicant"), a former employee of the respondent. The applicant had injured his back at work in early 1987 for which he received worker's compensation payments until 1991 when the decision was made to terminate then. The payments were made by reference to the provisions of the Compensation (Commonwealth Government Employees) Act 1971. The Tribunal had to determine whether the applicant continued to be incapacitated as a result of the work related injury. Its conclusion on that issue is found in the fourth sentence of the penultimate paragraph of its decision, paragraph 46, which reads: "The Tribunal notes the opinions of Doctors Wurth and Patrick that the Applicant magnified his symptoms. This 18 consistent with Dr Thomson's examination on 22 January 1991. On the basis of all the medical evidence and the Tribunal's observation of the Applicant at the hearing, we find that the Applicant is not disabled to the extent he would have us believe. We find that the effects of the work incident on 14 January 1987 have ceased. The evidence supports the finding that the Applicant is restricted to light work not involving bending or lifting but any disability which now precludes the Applicant from undertaking his pre-injury employment does not arise from his work injury." It can be seen that the Tribunal relied on observations it had made of the applicant during the three days it heard the matter. The Tribunal had referred to those observations on two earlier occasions in its decision, first in paragraph 28 which reads: "The applicant was observed by the Tribunal during the time he was giving evidence and during the time he was in the hearing room during most of the three days of the hearing on 24 and 25 February 1993 and 25 May 1993. He did not demonstrate any sign that he was suffering physical discomfort or attempt to alternate his position by standing up at any stage." and secondly, in paragraph 43 which reads: "In considering all the evidence before the Tribunal we find that the Applicant sustained an injury to his back at work on 14 January 1987. He had a pre-existing degenerative back condition which was aggravated by this work injury. He also had a protrusion and herniation of the disc at L4-5, which we find arose out of the work injury. The oral evidence of the Applicant was not consistent in respect to the symptoms he suffered, and we find that his evidence was not consistent with medical opinions provided to the Tribunal. His operating the lawnmower is not consistent with the severity of symptoms he describes, and his practice of resting with his legs raised as described in his evidence would produce pain and discomfort if hia back condition was of the severity he seeks to present. He showed no physical discomfort either when giving his evidence from the witness box or when observed by the Tribunal while sitting 1n the hearing room over the duration of the three day hearing." The Tribunal did not raise with the applicant or his counsel at the hearing that it had made these observations or that it saw them as relevant. After approximately an hour on the second day of hearing the Presiding Member asked a series of questions of one of the expert medical witnesses, Dr Patrick, on the extent to which the applicant would be able to work sitting down without getting up and moving about and the nature of the discomfort that might be experienced if he did not. These questions were, on their face, directed to the applicant's capacity to perform certain tasks though a question was asked: "If there was not that sort of apparent discomfort in that period, would you have questions about the genuineness of your findings?". In the course of final addresses on the third day of hearing, which occurred three months after the principal part of the hearing had been conducted, counsel for the respondent referred to the fact that the applicant "had claimed that he is uncomfortable if he drives a car, sometimes for as little as five minutes, and finds when he tries to stand up he cannot straighten up right away, and yet during the course of the hearing on the last occasion Mr Farah sat for some several hours in the witness box and went to sleep in a sitting position at the back of the Tribunal after he had given his evidence". Counsel for the applicant responded to this submission by saying, correctly, that these matters had never been put to the applicant or otherwise raised in the context of the earlier hearing. Counsel for the applicant then referred to the decision of "Bailey v GIO" and submitted that it was a decision that "says that there is an obligation particularly in relation to matters which occur outside the witness box which may not be the observations to the parties for those matters to be put". Nothing was then said by any member of the Tribunal about observations they had made. I was informed by counsel for the applicant, and must accept, that the citation to Government Insurance Office of New South Wales _v Bailey (1992) 27 NSWLR 304 was later given to the Tribunal by phone. The applicant submits that the failure of the Tribunal to inform the applicant and his counsel of its observations and that it might subsequently rely on them constituted a denial of natural justice and accordingly the Tribunal's decision should be set aside. The respondent submits that the Tribunal did not rely on its observations in determining what was in issue, namely whether the applicant was then incapacitated as a result of a work related injury or, as I understood the submission, the decision the Tribunal made was nonetheless reasonably open to it and should not be set aside even if the Tribunal had relied on its observations in deciding what was in issue. The authorities concerning the use that might be made by the Tribunal of its observations of a party and the obligation of the Tribunal to disclose to the parties its observations have recently been considered in detail by Beazley J in Marelic v Comcare (1993) 18 AAR 392. In the present case the Tribunal reached a conclusion found in paragraph 46 that the effects of the work incident on 14 January 1987 on the applicant had ceased. It thus concluded the applicant was no longer incapacitated as a result of a work related injury. That was immediately preceded by the expression of the conclusion that the applicant was not "disabled to the extent he would have us believe". That conclusion, in turn, is said to be founded on the medical evidence and the Tribunal's observations at the hearing. I accept that the decision of the Tribunal should be read fairly and in a balanced way: see Australian Postal Commission v Idriss (1992) 26 ALD 257 at 258 per Foster J. However the conclusion, in my opinion, to be drawn from that paragraph, viewed in the context of the decision as a whole, is that the extent of the disabilities perceived by the Tribunal to be suffered by the applicant both from the medical evidence and the Tribunal's observations, were viewed by the Tribunal as relevant to and supportive of their conclusion that the "effects of the work incident had ceased". The observations the Tribunal made were thus seen to be a relevant matter in resolving the issue before it. In those circumstances the Tribunal was obliged to raise with the applicant or his counsel the nature of the observations that had been made and that they might be relied upon. It is unnecessary to give any detailed consideration as to how and when this should have been done as it was not done at all. At the very least it should have been raised with counsel for the applicant when he expressed concern about the remarks made by counsel for the respondent based on her observations, if it was something that any member of the Tribunal then thought was relevant. If it was only seen as relevant after the decision had been reserved, the Tribunal's observations should have been disclosed to the parties and an invitation should have been extended to them to make submissions on those observations. The Tribunal would have also had to entertain any application to call further evidence that the parties might have then made. The authorities referred to by Beazley J in Marelic, supra, make clear that the requirement that such observations be disclosed is not intended to impose an unrealistic or oppressive burden on decision makers whether courts or tribunals such that any observation that might be relied upon need be disclosed or disclosed immediately. However the present case is one where, in my opinion, the Tribunal was required to disclose its observations, given the reliance placed upon them, if the application was to be determined fairly. Should the failure of the Tribunal to raise with the applicant or his counsel its observations, result in its decision being set aside? In my opinion it should. I am not able to say with any confidence that had the Tribunal not relied on its observations, it could not "possibly have made any difference": see Marelic, supra at 405, or even "that there is no reasonable possibility that a new trial would make any difference" to adopt what might be a lesser standard propounded by Miles a in Australian and Overseas Telecommunications Corporation Ltd v_McAuslan, (1993) 47 FCR 492 at 516. The Tribunal itself identifies the significance of their observations in paragraph 46. One difficulty I have in dealing with this issue is that the reasons of the Tribunal as to why it concluded that the effects of the work incident on 14 January 1987 had ceased are not detailed in the decision at least at the point when that conclusion is expressed. I accept that in earlier parts of the decision the Tribunal records evidence that might sustain that conclusion independently of the observations of the applicant they made and upon which they relied. However the way the Tribunal has expressed itself, approaching its decision as generously as I am able, indicates that the observations were of importance. Had there been no reliance placed on those observations, the balance that resulted from the evidence may have changed. Accordingly the decision of the Tribunal should be set aside. It is unnecessary to deal with the other grounds of appeal raised by the applicant. The observations I just made about the reasons of the Tribunal should not be taken to be an acceptance by me that the applicant has made out the ground alleging that the Tribunal had failed to give reasons. The applicant submitted that if it was successful in establishing that it was not accorded procedural fairness then the matter should be remitted to the Tribunal for redetermination, but differently constituted. This course was not opposed by the respondent. Accordingly I will order that the decision of the Tribunal be set aside and that the matter be remitted to the Tribunal for redetermination and that the respondent pay the applicant's costs. The matter should be heard by a differently constituted Tribunal. I will hear submissions as to whether the order should allow for the calling of further evidence. I will then adjourn the matter for the purpose of the parties bringing in short minutes. I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore. Associate: _ Date: 1 October 1994 Counsel for the Applicant: Mr J. Hatzistergos Solicitor for the Applicant: Steve Masselos & Co counsel for the Respondent: Ms R. Henderson Solicitor for the Respondent: Australian Government Solicitor Date of hearing: 10 October 1994 Date of judgment: 11 October 1994