FEDERAL COURT OF AUSTRALIA Comcare v Forbutt [2000] FCA 837 ADMINISTRATIVE LAW – appeal from Administrative Appeals Tribunal – claim for compensation by Commonwealth employee – assaults and intimidatory treatment while respondent serving in Army – whether failure by Tribunal to give adequate reasons – whether failure to deal with arguments advanced by Comcare Administrative Appeals Tribunal Act 1975 (Cth) ss 43(2), (2B), 44 Addo v Minister for Immigration and Multicultural Affairs [1999] FCA 940 followed Re Minister for Immigration and Multicultural Affairs; ex parte Durairajasingham (2000) 74 ALJR 405 at par 64 to 65 followed Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 359-360 mentioned Dornan v Riordan (1990) 24 FCR 564 at 567 applied Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385-386 followed Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 273 followed Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 666-667 Warren v Coombes (1979) 142 CLR 531 mentioned State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liquidation) (1999) 160 CLR 588 mentioned Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267 discussed COMCARE v ANNE LISA FORBUTT NO. T 1 of 2000 HEEREY J 22 JUNE 2000 MELBOURNE (HEARD IN HOBART) IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY T 1 of 2000 BETWEEN: COMCARE Applicant AND: ANNE LISA FORBUTT Respondent JUDGE: HEEREY J DATE OF ORDER: 22 JUNE 2000 WHERE MADE: MELBOURNE (HEARD IN HOBART) THE COURT ORDERS THAT: 1. The application is dismissed. 2. The applicant pay the respondent's costs including reserved costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY T 1 of 2000 BETWEEN: COMCARE Applicant AND: ANNE LISA FORBUTT Respondent JUDGE: HEEREY J DATE: 22 JUNE 2000 PLACE: MELBOURNE (HEARD IN HOBART) REASONS FOR JUDGMENT 1 Comcare appeals from a decision of the Administrative Appeals Tribunal constituted by Deputy President A M Blow OAM QC (now a Judge of the Supreme Court of Tasmania) and Ms A F Cunningham. The respondent was a soldier in the Australian Regular Army from 12 February 1985 until 11 February 1988. On 23 March 1994 she lodged a claim for compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the 1988 Act") in respect of a condition which she described as "emotional distress, probably post-traumatic stress disorder". In particular, her claim alleged intimidatory behaviour and assaults by a non-commissioned officer when she was in a military detention centre. 2 A delegate of Comcare determined that the Department of Defence was not liable to pay compensation and another delegate confirmed that determination. On 23 December 1999 the Tribunal, after a hard fought hearing extending over eight days, set aside the decision under review and remitted the matter to Comcare for reconsideration in accordance with directions that (a) Comcare was liable to pay the respondent compensation in accordance with the 1988 Act in respect of an injury suffered by her, namely a post-traumatic stress disorder; (b) the respondent was deemed to have suffered that "injury" in November 1988; (c) the respondent was incapacitated for work as a result of the said "injury" and had been so incapacitated since November 1988; (d) the compensation payable to the respondent was to be assessed. (In the legislation "injury" is given an artificially extended sense which includes mental ailment and disorder.) 3 Pursuant to s 67(9) of the 1988 Act the Tribunal ordered that the costs of the proceedings incurred by the respondent be paid by Comcare. Liberty to reply was reserved as to that order and on 16 March 2000 the Tribunal delivered a ruling rejecting the submissions of Comcare for a reduction in the percentage of Federal Court scale costs directed. 4 In essence, the case of Comcare on the present appeal is that the Tribunal failed to give adequate reasons for its decision. Legislation 5 Section 14(1) of the 1988 Act provides: "Subject to this Part, Comcare 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." "Injury" is relevantly defined in s 4(1) to mean: "(a) a disease suffered by an employee; or (b) … (c) … but does not include any such disease … suffered by an employee as a result of reasonable disciplinary action taken against the employee or failure by the employee to obtain a promotion, transfer or benefit in connection with his or her employment." Also in s 4(1) "disease" is defined to mean: "(a) any ailment suffered by an employee; or (b) the aggravation of any such ailment; being an ailment or an aggravation that was contributed to in a material degree by the employee's employment by the Commonwealth …." "Ailment" is defined as: "… any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development)." 6 The commencing day of the 1988 Act was 1 December 1988. Part X of the 1988 Act contained certain transitional provisions. Subject to that Part, the 1988 Act was to apply to injury, loss or damage suffered by an employee whether before or after the commencing day: s 124(1). If injury, loss or damage occurred before the commencing day the person would be entitled to compensation under the 1988 Act if compensation was or would have been payable to that person in respect of that injury, loss or damage under certain earlier legislation including the Compensation (Commonwealth Government Employees) Act 1971 ("the 1971 Act"): s 124(1A). Section 123A provided that a reference in Pt X of the 1998 Act to an injury suffered before the commencing day was a reference to an injury within the meaning of that earlier legislation. Section 29 of the 1971 Act provided that where an employee of the Commonwealth contracted a disease, or suffered an aggravation, acceleration or recurrence of a disease, and Commonwealth employment was a contributing factor, and total or partial incapacity for work resulted, then the contraction, aggravation, acceleration or recurrence was deemed to be a personal injury to the employee arising out of the employment of the employee by the Commonwealth. The date of the "injury" was deemed to be the date of the commencement of the incapacity or the date on which medical treatment was first obtained, whichever was the earlier: s 29(2)(g). It was common ground that a psychiatric disorder of the kind alleged by the respondent was a "disease" for the purpose of both the 1971 and the 1988 Acts. The 1971 Act definition of "disease" was in the same terms as the definition of "ailment" in the 1988 Act. 7 Section 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") provides: "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." 8 Section 43(2) of the AAT Act provides that the Tribunal shall give reasons either orally or in writing for its decision. Section 43(2B) is 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." The respondent's case before the Tribunal 9 The respondent was born in 1960. Her father was an officer in the Department of Foreign Affairs and during her primary school years the family lived in the United States, Greece and Indonesia as well as Canberra. She attended High School in Canberra but did not complete secondary education. She became a political activist after leaving school and was involved in demonstrations. She was arrested a number of times. 10 In April 1982 the respondent moved from Canberra to Townsville. She completed her secondary education at a TAFE College. She joined the Army Reserve and socialised with young people in army circles in Townsville. On 12 February 1985 she joined the Regular Army. 11 She was first posted to a Recruit Training Battalion at Kapooka in New South Wales. This was the first intake of female soldiers to undergo recruit training there. On 5 March 1985 the respondent assaulted Recruit Dodd, another female recruit, by punching her several times and then kicking her when she fell to the floor. The respondent's explanation was that other recruits had complained to her about their treatment by Recruit Dodd. She had raised these matters with Recruit Dodd who then swore at her. The respondent, exhausted after work that day, lost her temper. 12 The respondent was arrested, charged and sentenced to one week's military detention. She served that term in the military detention centre at Kapooka. She was the first woman to be imprisoned there. The Regimental Police Officer in charge was a Cpl Modystack. Cpl Modystack warned her a number of times that if she escaped he would "hunt her down like a dog". He was always shouting and swearing at her. He kept pulling the bedclothes off her bed and requiring her to remake it to military standard. He made her air the blankets by running around a courtyard holding each blanket by the two corners above her head, wearing unlaced boots and making 36 circuits of the courtyard with each blanket. One day at lunch she was served fish and cabbage which she found herself unable to eat. Cpl Modystack repeatedly screamed at her to eat the food and threatened to shove it down her throat. He grabbed her by the throat with one hand and held his other hand in a clenched fist near her cheek. Two other soldiers took him away. Later he came back, marched her to her cell, swore at her, slammed the door and left her standing in the cell. She was required to stand until given permission to sit. 13 As a result of missing a week's instruction while in detention she spent four months in recruit training at Kapooka instead of the usual three. Thereafter she was posted to the Royal Australian Survey Corps at Bandiana in Victoria. The second in command of the unit there was a Warrant Officer Bulley. In August 1986 as a result of reports by WO Bulley she was charged with two disciplinary offences relating to the cleanliness of her room. While she was at Bandiana WO Bulley made repeated comments to her to the effect that women were useless, that they should not be in the Army, that they were a waste of training money, that they could not keep up with men or do the work that men did. He would make intimidatory remarks such as saying that he could have her up on any charge he wanted. 14 On 15 May 1987 the respondent got drunk with another young female soldier. They threw tables, chairs, flour, chocolate topping, and empty bottles into the swimming pool at the Sergeants' Mess and swore at the sergeants who tried to restore order. The respondent was again charged and sentenced to four days imprisonment which she served at Victoria Barracks in Melbourne. When she commenced that sentence two guards started shouting at her and pulling her bedding apart. She was so terrified she was shaking. However the Regimental Sergeant Major intervened and arranged for her to do work during the day away from the cells. There was no repetition of the initial behaviour. 15 After the respondent's discharge from the Army on 11 February 1988 she moved to Tasmania. In one part of her statement she put the month of her arrival as March, in another part as May. The timing and sequence of what the respondent did after her arrival in Tasmania, and where she lived and worked, and the Tribunal's findings in relation to such matters, were the subject of argument on the present appeal. At the moment suffice it to say that she first lived at Palmer's Lookout near Port Arthur with a Mr Neville Curtis who was a friend from her Canberra days. She then moved to Hobart and obtained a job working for Stepping Stones, an organisation working to help homeless young people. She left that organisation, as the Tribunal found, in November 1988. She resigned because she realised she could not cope and could not do the job properly. She said "In a way I was more confused than half the street kids were". Thereafter she obtained employment only twice, casual household cleaning for an agency in Hobart in 1989 and in October 1989 at Redwood Retirement Village as a gardener. 16 She lived an unstable and itinerant existence. She lived or stayed at numerous addresses and spent some time in camping in the bush. She made no close friendships. 17 On 13 August 1988 the respondent was arrested and charged with driving with a blood alcohol concentration exceeding 0.05 per cent. The reading was 0.115 per cent. She was convicted and disqualified for a period. On 17 December 1989 she was again arrested and charged with driving while disqualified and also exceeding .05 per cent (0.111 per cent). On 3 January 1989 she was sentenced to 144 hours community service. 18 On 19 June 1992 the respondent consulted a general practitioner Dr Mark Pickering. She had already seen him about other health matters. But on this occasion she sought help because of her involvement in two violent incidents, one of which occurred in March 1990 and the other in April 1992. On the first occasion she was staying at a house in Mornington. She came home and was told that a woman had thrown a rock through the window of a baby's bedroom in the house where the respondent was staying. The baby's cot was near the broken window although the baby was not in it at the time and was not injured. The respondent went to the woman's house and assaulted her, fracturing her nose. On the second occasion she was staying at a house in Moonah and a neighbour had been teasing her dog, despite repeated requests for him to stop. She went inside, got a .22 rifle, and fired a shot through a window of the neighbour's house. As a result of the second incident she realised she had a problem and sought medical help. Dr Pickering saw her on eleven occasions over the ensuing four and a half months and referred her to a consultant psychiatrist, Dr Ian Sale, who saw her on twenty-one occasions from 26 November 1992 until April 1994. 19 At this stage it should be mentioned that there was evidence of the respondent's involvement in some episodes of seriously dishonest conduct. In April 1981 she and a friend hired a motor cycle and then falsely reported it stolen. They put false number plates on it and forged a receipt for the price. Police officers made some enquiries and the respondent produced the forged receipt. However she was charged, convicted and released on entering into a good behaviour bond. She was twenty years old at the time. When she was asked about this episode in cross-examination she first, in the words of the Tribunal, "tried to conceal the full extent of her dishonesty" and "lied to us". 20 In 1986, while she was in the Army, she purchased a block of land on Bruny Island. On 16 November 1989 she obtained a personal loan of $6,000 from the Commonwealth Bank of Australia. She repaid little or nothing of the loan and the bank sued her. The bank's solicitors had difficulty serving the writ and an order for substituted service was obtained on 21 December 1990. In the meantime the respondent had transferred the property to a friend by a transfer dated 6 December 1990. The transfer purported to show a consideration of $9,000 but no money changed hands. The transaction was a sham. The friend became the registered proprietor of the property on 7 January 1991 and subsequently sold it to a bona fide purchaser for value without notice. That sale took place on 20 February 1992. The proceeds of the sale were given to the respondent . On 12 March 1992 she was made bankrupt on her own application but her statement of affairs verified by affidavit made no mention of the proceeds of sale of the Bruny Island property. 21 On 14 October 1989 the respondent was arrested and charged with six counts of burglary and six counts of stealing. The offences were committed between July and October 1989 in the Sandy Bay area. Over $10,000 worth of property was stolen. One of the houses from which she stole was one where she was doing casual cleaning work on behalf of an agency. According to a probation officer who interviewed her she was "dismissive" of the need for restitution. When the effect of her offences on the victims was put to her she referred "to the location of their homes and possible insurance policies". Issues before the Tribunal 22 The Tribunal heard evidence from Dr Sale and another psychiatrist, Dr Russell Pargiter, who was called by Comcare. The Tribunal observed, in a passage that was not the subject of any complaint on the present appeal, that both Dr Sale and Dr Pargiter accepted that the respondent had a chronic psychiatric problem which had severely curtailed her capacity for work, to the extent that she could only work in socially isolated circumstances. The contest before the Tribunal turned on the question of causation. First, there was a conflict as to the respondent's account of her treatment in the Army, especially the allegations against Cpl Modystack and WO Bulley. Secondly, there was a dispute as to whether her present condition was caused by anything she might have undergone in her Army service, as opposed to her pre-existing personality. Thirdly, there was an issue which I was told did not really emerge until final submissions, namely the date of the commencement of the incapacity and in particular whether that was about the time of her ceasing work with Stepping Stones. If it was, then the "injury" occurred before 1 December 1998 and the exclusions of liability for injury caused by "reasonable disciplinary action" or promotion disappointment were inapplicable, such exclusions not being provided for in the 1971 Act. The Tribunal's reasons 23 The Tribunal's narrative of the respondent's history was substantially as set out above. The Tribunal noted the evidence of Mr Modystack, now a civilian, who virtually conceded raising his voice to the applicant and threatening to "hunt her like a dog". He did admit making the applicant remake her bed a number of times. He denied requiring her to run around holding blankets as she described. He did not remember her refusing to eat lunch. He denied grabbing her around the throat or threatening to shove her lunch down her throat. He denied that he had been trying to break her. The Tribunal noted the evidence of Mr Bulley, who had also left the Army. He denied the making of any improper comments to the applicant or discrimination or prejudice on the grounds of sex. He denied any impropriety in relation to the disciplinary charges of August 1986. 24 In dealing with the evidence as to the respondent's movements in 1988 after her arrival in Tasmania, the Tribunal said (in this and subsequent passages quoted from the Tribunal's reasons "the applicant" is of course a reference to the present respondent): "19. In a statement she signed for her solicitor on 9 May 1995, the applicant said that she had that job [at Stepping Stones] from June to November 1988. In her oral evidence the applicant said she stayed with Mr Curtis for about six months and then worked for Stepping Stones for approximately 3 or 3 ˝ months. The statement of 9 May 1995 suggests that she may still have been living near Port Arthur some months after starting work at Stepping Stones. Mr Curtis gave evidence that he was living in the Hobart suburb of Glebe from April 1988 until September 1988 and that the applicant used to stay there on occasions. There is other evidence as to the activities of the applicant, and of Mr Curtis, in late 1988, but none of that other evidence is of any assistance in relation to the date the applicant left her employment with Stepping Stones. The most reliable evidence as to when she left is in the statement of 9 May 1995 which was submitted to Comcare by the applicant's solicitor. On the basis of that unchallenged and uncontradicted evidence, we find as a fact that the applicant left her employment with Stepping Stones in November 1988." 25 The Tribunal referred to the medical evidence. Dr Sale's view was that there was no indication of any emotional disturbance before the respondent entered the Army and that she was suffering from an atypical post-traumatic stress disorder which was of chronic condition. She was incapacitated for any work involving others. The impairment was permanent. Her difficulties were a consequence of her Army service, particularly the period of imprisonment at Kapooka and her service under WO Bulley. 26 The Tribunal noted Dr Pargiter as disagreeing with that diagnosis and expressing a belief that the respondent was suffering from a dysthymic disorder and an atypical personality disorder. The precipitating cause of her problems was her failure to achieve her ambition of being selected for officer training. At the hearing, he suggested the onset of her dysthymic stress disorder might have occurred prior to her Army service. Also, the failure for selection aggravated her pre-existing condition. She needed treatment, including anti-depressant medication, cognitive behaviour therapy and long term psychotherapy. Without rehabilitation she was fit only to work in socially isolated circumstances. He did not believe that there was any nexus between the treatment the respondent received and the Army and her psychiatric condition or symptoms. As already mentioned, the Tribunal observed that there was much common ground between Dr Sale and Dr Pargiter as to the respondent's present condition. 27 The Tribunal recorded the submission of counsel for Comcare that Dr Sale's evidence should be rejected because his conclusions were dependent on an untruthful or unreliable history given to him by the respondent and Mr Curtis. The Tribunal noted that it needed to make findings in relation to disputed factual issues. It commenced by an assessment of the respondent's credibility. The Tribunal thought the respondent's evidence had to be treated "with great caution, not just because she has psychiatric problems, but also because of her capacity for dishonesty". After referring to the evidence about the motor cycle theft and the Bruny Island land, the Tribunal said: "Her evidence as to where she has lived since leaving the army, when, and with whom, was vague, confused and disjointed. As the hearing progressed, we learned of more and more addresses and more and more individuals with whom the applicant had shared accommodation. In relation to the alleged incident when the applicant fired a shot through a window, counsel for the respondent made a very forceful submission, pointing out that Mr Curtis was her landlord at the relevant premises, that he had heard nothing of any such incident and that that fact suggested that it had never occurred. Further, aspects of the applicant's evidence of events that occurred when she was in the army were contradicted by Miss Dodd, Mr Modystack, Mr Bulley and Mr Stephens." 28 Despite all of these matters the Tribunal nevertheless came to the conclusion that the respondent was "generally honest in the evidence that she gave". Her lie to the Tribunal about the motor cycle theft "seemed impulsive and opportunistic". If her claim for compensation was a fraudulent one, she would have probably made it at an earlier stage. Under cross-examination she seemed to be doing her best to recall dates, people and events, but seemed not to have a good memory in relation to such things. Dr Sale had observed that he had great difficulty extracting a history from her and that "one needed to ask the right questions in order to get any information from her". 29 The Tribunal then embarked on a detailed analysis of the evidence of Mr Modystack. The Tribunal reviewed his evidence and noted some discrepancies. Since much of Comcare's case on the present appeal has rested on an alleged lack of "transparency" in the Tribunal's reasons, it is useful to quote a substantial passage, which itself is only about a third of the space taken up with an analysis of Mr Modystack's evidence. The Tribunal said: "Given the culture of strict discipline in the detention centre, (Mr Modystack's) lack of appropriate training, his inexperience with female prisoners and his assessment of the applicant's character, it would not be surprising for him to have behaved as alleged by the applicant. We were somewhat unimpressed by the way he gave his evidence in particular by his apparent keenness to have us believe that the accessibility of a padre made any misconduct on his part unthinkable. There was no suggestion that the applicant's psychiatric condition has ever caused her to suffer from delusions or to invent stories of persecution. We accept Mr Curtis' evidence as to her confidence and ability before she joined the army, and as to the state she was in after she left the army. All of these matters have led us to accept her evidence in preference to that of Mr Modystack as to his conduct towards her." 30 The Tribunal was less confident as to the accuracy of the respondent's memory in relation to the behaviour of WO Bulley, but having seen and heard Mr Bulley as a witness, the Tribunal thought it likely that he was tougher in his conduct towards the respondent than he was prepared to admit. However it was the effect his behaviour had, rather than its propriety or otherwise, that was important. The Tribunal found that his behaviour towards her was seen by her to be so harsh that it troubled her. The drunken incident at the swimming pool was a result of her feeling that he had been giving her too hard a time. 31 The Tribunal accepted Dr Sale's evidence as to the causation of the respondent's psychiatric disorder and rejected the evidence of Dr Pargiter that it was self-generating and/or the result of the respondent's reaction to her not being selected for officer training. Dr Pargiter seemed to have seized on a comment given by the respondent in relation to officer training and given her non-selection an importance that could not be justified by the evidence. There was no evidence of any strong ambition to become an officer, nor of her having been told at any particular time that she could not undertake officer training, nor of any significant disappointment or concern as a result of officer training being unavailable to her. The Tribunal thus rejected non-selection as a factor causing or aggravating her mental disorder. The only other explanations for her disorder were that it could have been self-generating or that it could have been caused by harsh treatment when she was in the Army. The Tribunal accepted the evidence of Dr Sale as to harsh treatment in the Army being the cause for a number of reasons. First, Dr Sale knew far more about the respondent, having seen her on numerous occasions as a treating doctor whereas Dr Pargiter saw her only once. Secondly, Dr Pargiter's views as to the degree of the respondent's incapacity was more optimistic than his recommendations for treatment would suggest. He was, in the Tribunal's view, too ready to treat the respondent's political activism in her youth as evidence of a disturbed personality. The Tribunal thought that Dr Pargiter made a mistake in accepting without question certain comments as to the respondent's personality in a "so-called psychological report" of 7 March 1985 written by an unknown author of unknown qualifications in the Army shortly after the respondent assaulted Recruit Dodd. The Tribunal attached some significance to the fact that another psychiatrist, Dr Woo, agreed with Dr Sale's diagnosis. Dr Woo had seen the respondent as part of an assessment following her burglary charges. 32 The respondent's psychiatric symptoms as observed by Dr Pargiter included depression, dysfunctional relationships, social isolation, an explosive temper, insomnia with morbid dreams, anergia, a tendency to easily become agitated, anxiety and a need for reclusiveness. As well there was a flattened affect, something conspicuous both to Dr Sale and the Tribunal. The challenge to Dr Sale's diagnosis on the basis of one essential criterion being absent, namely experiencing events involving actual or threatened death or serious injury, the Tribunal thought no more than a question of labelling. If the respondent was incapacitated as a result of the psychiatric condition with the requisite connection to her employment as a soldier, the appropriate name for her condition was immaterial. However, the Tribunal accepted Dr Sale's evidence to the effect that her condition was an atypical post-traumatic stress disorder. The Tribunal also accepted Dr Sale's evidence to the effect that the respondent's experiences under military detention at Kapooka caused her to feel under threat to such an extent that his diagnosis was appropriate. 33 The Tribunal said it was reasonably satisfied on the basis of the evidence of the respondent, Dr Sale and Dr Woo that the respondent was incapacitated for work, except in jobs where she does not have to deal with other people, as a result of the treatment that she received in the Army from Cpl Modystack and, to a lesser extent, WO Bulley. The Tribunal found that her psychiatric condition first had an impact on her ability to work when she resigned from Stepping Stones in November 1998. The Tribunal accepted her evidence that she resigned because she was not coping and was more confused than those she was meant to help. This was consistent with Dr Sale's evidence that by his best estimate the time when the respondent first had a condition that required treatment was sometime during 1988 when she started living under rather frugal circumstances on the Tasman Peninsula. This was at a stage prior to her obtaining work with Stepping Stones. 34 The Tribunal then quoted the relevant legislation and found that the respondent's atypical post-traumatic stress disorder was a mental ailment, disease or morbid condition and therefore within the definition of "disease" in the 1971 Act. She suffered a partial incapacity for work as a result of that condition at the time she resigned from Stepping Stones in November 1988. As her employment by the Commonwealth was a contributing factor to the contraction of her condition, it followed that her condition constituted an "injury" within the meaning of the 1971 Act and compensation would have been payable under that Act in respect of her incapacity for work from the time she left Stepping Stones. Therefore, by virtue of s 124(1A) of the 1988 Act she was entitled to compensation under that Act. It was therefore not necessary to consider the exclusion in relation to reasonable disciplinary action as that did not form part of the definition of "injury" in the 1971 Act. 35 The Tribunal then remitted the matter with the directions already referred to at the outset of these reasons. 36 As to costs, s 67(9) of the 1988 Act provides: "Where the Administrative Appeals Tribunal gives a decision setting aside a reviewable decision and remitting the case for re-determination by the determining authority, the Tribunal shall, subject to this section, order that the costs of the proceedings before it incurred by the claimant shall be paid by the responsible authority." 37 A general practice direction issued by Matthews J as President of the Tribunal on 18 May 1998 directed that costs payable under, inter alia, s 67(9) should include witnesses expenses at the prescribed rate, all reasonable and proper disbursements, and 75 per cent of all professional costs, including counsel fees, which would be allowable under the Federal Court scale. 38 Counsel for Comcare submitted that in various respects the respondent and/or her counsel had wasted time during the hearing and that as a result Comcare's legal representatives were caused to waste their time. Counsel in particular referred to adjournments for the purpose of the respondent seeking legal advice and to adjournments for the purpose of her counsel having discussions with witnesses. 39 In a ruling given on 16 March 2000 the Tribunal noted it was clear from the wording of the 1988 Act that the policy of Parliament was that costs orders were not to be made in favour of respondents. For a reduction to be made in the percentage of Federal Court costs on such grounds would be to compensate the respondent for costs incurred by it and that would be contrary to the will of Parliament. After referring to the circumstances of Major General Dunne's evidence, the Tribunal made a finding that any delay would not have any impact on the quantum of the respondent's party and party costs. The Tribunal rejected the Comcare submission and ordered that the respondent's costs be taxed by the District Registrar in accordance with the practice direction. Comcare's argument on the appeal 40 The errors of law attributed to the Tribunal were failure to provide adequate and proper reasons for its decision, including failure to comply with the requirements of s 43(2B) of the AAT Act to make material findings of fact and refer to the evidence or other material on which those findings were based. 41 As will be seen, counsel advanced many detailed criticisms of the Tribunal's reasons. A constant theme of that criticism was what was said to be the lack of "transparency". The Tribunal did not "expose its reasoning", both in regard to the apparent rejection of evidence favourable to Comcare and rejection of arguments advanced on its behalf. 42 The following account of the submissions made on behalf of Comcare is not exhaustive. Nevertheless it is, I think, fairly representative of the arguments, which were advanced in great detail. 43 First, it was said that the Tribunal "jumped to an acceptance" of the credibility of the respondent as being "generally honest" without any "transparent process" of reasoning as to how that finding was arrived at in conflict with the evidence of dishonesty such as the motor cycle incident and the sham transfer of the Bruny Island land. 44 Secondly, there was no "precise finding" as to the alleged assault by Cpl Modystack. 45 Thirdly, the respondent had said to Dr Pargiter in 1997 that the Modystack assault occurred on the fifth day of her imprisonment. It was common ground that she commenced her term of imprisonment on a Tuesday but it was established that Cpl Modystack was not on duty over the weekend. Thus even on her story there was an inherent conflict and the Tribunal failed to advert to that conflict. 46 Fourthly, the respondent's aunt Mrs Glenda Sebbens gave evidence that the respondent never told her that she had been subject to military detention or assaulted while in the Army. Mrs Sebbens said that the respondent had told her that when she lived in Canberra "one of the Federal Police officers was very rough with her and just advised them to get out of town, the lot of them". On this occasion "it looked as if he was going to punch her only one of the others stopped him". It was said that this evidence was not referred to by the Tribunal, that the Tribunal was bound to deal with it because it was in conflict with the respondent's account. The Canberra incident may have been really what happened to her, rather than the alleged assault by Cpl Modystack. The respondent had never told Dr Sale about the Canberra incident and it was never part of her examination in chief. The Tribunal should have found she was keeping this matter to herself. The Canberra incident "might have been the trigger" for her condition. But the Tribunal never analysed this. 47 Fifthly, there was an issue as to whether the respondent's disorder manifested itself in terms of an impact on her ability to work by her leaving Stepping Stones in November 1988. Relevant to this was the question whether, upon leaving that work, she became a recluse. This was an assumption on which Dr Sale's diagnosis depended. There was evidence tending against this conclusion. Mrs Cherylyn O'Doherty said that the respondent lived with her for about five months before leaving to live on a tent on her block on Bruny Island. During the time with her the respondent helped with household chores and would eat her meals with Mrs O'Doherty and her family. According to the respondent's bankruptcy statement of affairs signed on 11 March 1992 she had at that stage been living "temporarily only" with Mrs O'Doherty for one week. Also there was evidence that the respondent had in 1989 been involved in a Karate Club. A statement from a member (apparently tendered as character evidence on the hearing of her burglary charges) described her as "quiet, reserved, almost shy". The instructor said that she was "always respectable (sic) to her elders and the senior students of our club and is active in helping younger students whenever a request is made of her". There was also evidence that for some time from February 1989 she lived in a house with two others at Alcides Avenue, Lenah Valley and had a sufficient degree of permanency to subscribe for a telephone connection. Thus it was argued there was evidence that after leaving Stepping Stones she did not, as Dr Sale assumed, go into an isolated condition and withdraw from society. The Tribunal did not give any explanation of this conflict. 48 Sixthly, the respondent's living with Mrs O'Doherty in April 1992 was inconsistent with her account of the incident of firing a gun through the window. According to Mr Curtis, at that time she was in Hopkins Street, Moonah, but then she went to Alcides Avenue, Lenah Valley. However the respondent had been in Alcides Avenue since 1989. 49 Seventhly, the respondent said in her evidence before the Tribunal that she worked at Stepping Stones for approximately three to three and a half months and that she commenced this job about six months after she started living at Mr Curtis' property at Palmer's Lookout. So it was said even if she came to Tasmania in March 1998 (one of the two dates in her statement) she would not have finished at Stepping Stones before December rather than November as she said. The Tribunal did not deal with this. Findings of fact and referring to evidence 50 The language of s 43(2B) of the AAT Act suggests that the only evidence or other material which the Tribunal is obliged to refer to is evidence or material which provides a basis for the findings of fact made. If there is evidence or other material which is inconsistent with such findings there is no obligation to refer to it. There is clear authority for this conclusion in decisions made in the context of s 430(1) of the Migration Act 1958 (Cth) which is in terms not substantially different from s 43(2) and (2B) of the AAT Act. In Addo v Minister for Immigration and Multicultural Affairs [1999] FCA 940 the Full Court said (at par 24): "Section 430(1) does not impose an obligation to do anything more than to refer to the evidence on which the findings of fact are based. Section 430 does not require a decision-maker to give reasons for rejecting evidence inconsistent with the findings made." 51 In the same vein the Full Court said (at par 31): "It is not necessary, in order to comply with s 430(1), for the [Refugee Review] Tribunal to give reasons for rejecting, or attaching no weight to, evidence or other material which would tend to undermine any finding which it made." 52 Those passages were approved by McHugh J sitting as a single justice of the High Court in Re Minister for Immigration and Multicultural Affairs; ex parte Durairajasingham (2000) 74 ALJR 405 at par 64 to 65. At par 65 his Honour said: "… whenever rejection of evidence is one of the reasons for the decision, the [Refugee Review] Tribunal must set that out as one of its reasons. But that said, it is not necessary for the Tribunal to give a line-by-line refutation of the evidence for the claimant either generally or in those respects where there is evidence that is contrary to findings of material fact made by the Tribunal." 53 Later his Honour said (at par 67): "… the prosecutor alleges that the [Refugee Review] Tribunal breached s 430(1) by failing to set out reasons for its finding that the prosecutor's claim that members of PLOTE tried to recruit him were 'utterly implausible'. However, this was essentially a finding as to whether the prosecutor should be believed in his claim – a finding on credibility which is the function of the primary decision maker par excellence. If the primary decision maker has stated that he or she does not believe a particular witness, no detailed reasons need to be given as to why that particular witness was not believed. The Tribunal must give the reasons for its decision, not the sub-set of reasons why it accepted or rejected individual pieces of evidence." 54 In many respects the Tribunal in the present case not merely met but exceeded the standards imposed on it. For example in relation to the critical incident where there was conflict between the respondent and Mr Modystack, the Tribunal went into considerable detail in giving reasonable and reasoned reasons why it accepted the respondent's version. Of course, as the Tribunal explicitly acknowledged, the respondent's troubled life had included episodes which gave serious cause for doubting her credibility. Nevertheless the Tribunal, which saw her give evidence and be cross-examined, was entitled to accept her evidence, and it gave reasons for doing so. 55 Much of the criticism of the Tribunal's reasons for its fact finding bears an air of unreality. The Tribunal was dealing ten years afterwards with dates, places, and other details which were inherently unlikely to be the subject of consistent recollection by all witnesses. Moreover, underlying this criticism appears to be a tacit assumption that somehow the Tribunal could not accept the case of the respondent without reconciling in its reasons all the conflicts in the evidence and tying up all loose ends. Resolution of factual disputes in an administrative or judicial context often does not produce such satisfaction. 56 Comcare's submission went so far as to contend that the Tribunal's acceptance of the respondent as a credible witness was so perverse, considering the evidence, that the inescapable conclusion was that the Tribunal misdirected itself: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 359-360. This argument must be rejected. The context of the credibility issue should not be overlooked. As already mentioned, two psychiatrists agreed in substance that the respondent was suffering from a substantial psychiatric disorder which made her virtually unemployable. It was common ground that she had served in the Army, and spent a week in detention. Since military life ordinarily involves discipline not met in civilian life, military punishment needs to be even stricter and necessarily unpleasant. In that setting it was not inherently unlikely that the respondent's account of the Modystack incident was true and his was not. The Tribunal did not stop, as it could have, at a bare statement of belief in the respondent. It explained in some detail why it accepted her version. One then has a severe psychiatric condition and a specific incident occurring in the course of Commonwealth employment, which the respondent's treating psychiatrist said, with the advantage of twenty-one consultations, caused her condition. One might think that on this evidence the respondent was, so to speak, more than halfway home. Then there are the powerful circumstances, referred to by the Tribunal, of the absence of any suggestion of malingering and the likelihood that a fraudulent claim for compensation would have been made much earlier. The present case was not one where a claimant asks that a succession of improbable and uncorroborated events be accepted. On the contrary, the misdeeds of the respondent, of which Comcare (quite legitimately) made much of at the hearing, and the confusing narrative, tended to obscure the underlying strength of her case. I make these observations not for the purpose of expressing agreement with the factual conclusions of the Tribunal; that is not the Court's function. Rather it is to show how a reader can readily deduce from the Tribunal's reasons why it made the decision it did. Failure to deal with arguments 57 Comcare also relied on a failure by the Tribunal to refer in its reasons to a number of submissions made. These submissions related to various evidentiary points, such as the day on which the Modystack assault occurred (see par 45 above) and Mrs Sebbens' evidence about the Canberra incident (par 46). 58 However the Tribunal was not obliged to deal with every argument raised and every possibility that could be adverted to: Dornan v Riordan (1990) 24 FCR 564 at 567. It is not the duty of a judge to decide every matter which is raised in argument: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385-386. It will ordinarily be sufficient if a judge "apprises the parties of the broad outline and constituent facts of the reasoning on which he has acted": Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 273 per Mahony JA. The obligation in this regard on a judge is higher than that on an administrative decision-maker: Soulemezis at 261 per Kirby P, Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 666-667 per Gibbs CJ. 59 Moreover, the duty to give reasons is related "to the function to be served by the giving of reasons": Tatmar at 386, Soulemezis at 280. The appeal from the AAT to this Court is only on a question of law. For that purpose there needs to be findings of material fact and reference to the evidence or other material on which those findings are based. Findings of material fact will enable the Court on appeal to ascertain whether the law was correctly applied to those facts and whether there was evidence on which such findings could (not should) have been made. This is a fundamentally different exercise from that engaged in by an appellate court hearing an appeal from a judge: Warren v Coombes (1979) 142 CLR 531, State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liquidation) (1999) 160 CLR 588. 60 The statements of the Full Court in Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267, relied on by counsel for Comcare, need to be read in that setting. Jenkinson J, with the concurrence of Woodward and Foster JJ, said (at 276) that a submission made to the Administrative Appeals Tribunal was "worthy of serious consideration and was seriously advanced" and that the failure of the Tribunal to consider and determine it was an error of law. The case concerned the assessability for income tax of a profit made by the appellant company which acquired shares from a Mr Eastgate and resold them to Hookway Aviation Pty Ltd. One of counsel's arguments before the Tribunal was that in ascertaining whether the appellant had gained a profit, and in ascertaining the amount of that profit, there should be deducted from the proceeds of the sale to Hookway not only the price paid to Eastgate but the amount by which the value of the shares exceeded that price; arguably at least, on the evidence that this was a substantial amount. Counsel had argued that because Eastgate owned beneficially all the shares in the appellant, the price actually agreed upon was lacking in economic reality. However, since the Tribunal made no mention of this argument it was not possible to determine whether the Tribunal had rejected the factual basis of the argument (the excess of value over price) or the legal basis (assuming such an excess, the "profit" for tax purposes was affected as counsel contended). 61 It might be added that there are logical constraints on the extent to which failure of the Tribunal to deal with arguments can avail an appellant. If the argument went to matters of fact then, as already mentioned, the Tribunal need do no more than state its findings of material fact and refer to the evidence or material on which those findings were based. If there is no defect in failing to refer to contrary evidence, it is hard to see how there can be error in failing to discuss contrary argument. 62 If the argument was one of law, and the Court finds it to be correct (say, for example, the Tribunal has overlooked a relevant statutory provision advanced in argument) then the Court will set aside the decision because it was wrong in law – regardless of whether or not the argument was discussed in the Tribunal's reasons. If however the legal argument is incorrect (say a Full Court decision has held that the omitted statutory provision does not have the effect suggested) then the Court could hardly set aside a decision which was not wrong in law. Costs 63 I do not see any legal error in the way in which the Tribunal exercised its discretion as to costs. Order 64 The application will be dismissed with costs including reserved costs. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: 22 June 2000 Counsel for the Applicant: Mr B Morgan Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Mr L Sealy Solicitor for the Respondent: Legal Aid Commission of Tasmania Date of Hearing: 31 May, 1 June 2000 Date of Judgment: 22 June 2000