FEDERAL COURT OF AUSTRALIA Chapman v Australian Postal Corp [2000] FCA 1700 ADMINISTRATIVE LAW – appeal from the Administrative Appeals Tribunal – where the decision of the AAT contained an error of law – whether it would be futile to remit the matter to the AAT – where on the evidence before it various findings of fact were open to the AAT John Martin v Australian Postal Commission (1999) FCA 655 followed Commonwealth Banking Corp v Percival (1988) 20 FCR 176 followed Repatriation Commission v Nation (1995) 57 FCR 25 distinguished RAYMOND HOWARD CHAPMAN v AUSTRALIAN POSTAL CORPORATION Q 27 OF 2000 TAMBERLIN J SYDNEY 23 NOVEMBER 2000 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY Q27 OF 2000 BETWEEN: RAYMOND HOWARD CHAPMAN APPLICANT AND: AUSTRALIAN POSTAL CORPORATION RESPONDENT JUDGE: TAMBERLIN J DATE OF ORDER: 23 NOVEMBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The decision of the Administrative Appeals Tribunal is set aside. 2. The matter is remitted to the Administrative Appeals Tribunal, differently constituted, for determination in accordance with law. 3. The respondent is to pay the applicant's costs. 4. The respondent is granted a costs certificate under s 6 of the Federal Proceedings (Costs) Act 1981 in respect of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY Q27 OF 2000 BETWEEN: RAYMOND HOWARD CHAPMAN APPLICANT AND: AUSTRALIAN POSTAL CORPORATION RESPONDENT JUDGE: TAMBERLIN J DATE: 23 NOVEMBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal from a decision of the Administrative Appeals Tribunal ("the AAT") given on 8 March 2000, which affirmed a decision by an officer of the respondent. The officer had originally determined that the respondent was not liable to pay work place injury compensation to the applicant from 19 June 1999. The injury had been diagnosed as "lateral epicondylitis of the right elbow". 2 The grounds of appeal, which was brought pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act"), included an assertion that the AAT failed to provide adequate reasons for its decision. 3 On the appeal it was common ground that there had been material errors of law in the decision and no submission was made by the respondent as to the adequacy of the reasons in the AAT decision. Rather, the submission of the respondent was that notwithstanding any errors of law the AAT had nevertheless reached the correct conclusion and a referral back to a differently constituted Tribunal would be futile. Counsel for the respondent argued that there was evidence before the Tribunal sufficient to support the findings made in par 13 of the decision and referred to a number of pieces of evidence. 4 The decision under appeal recites the history of the applicant's employment with the respondent and summarises the work in which he had been engaged. It records that the applicant was accepted, for compensation purposes, as having lateral epicondylitis of the right elbow arising from the repetitive nature of his work in sorting mail. 5 After reciting the history of the matter the AAT said: "10. The Tribunal heard evidence from Dr Stabler, orthopaedic surgeon. Dr Stabler believes that certain people are susceptible to the problems of lateral epicondylitis, tennis elbow and golfer's elbow, because of their physical characteristics. He believes that Mr Chapman is one of them. Consequently, for Mr Chapman to remain free of lateral epicondylitis, he should not re-engage in the type of work he was doing when he hurt his elbow. It was the repetitive nature of the work which caused the problems. 11. It was submitted on behalf of Mr Chapman that he is entitled to compensation on the basis of the difference in wages between what he was earning as a sorter on full-time plus overtime and what he is now earning as a three day per week mail deliverer. 12. Subsection 14(1) of the Safety Rehabilitation and Compensation Act 1988, provides that compensation is payable if the injury results in death, incapacity for work or impairment. … 13. Mr Chapman cannot return to his previous work of sorting second-class mail because of his physical characteristics which make him susceptible to developing another bout of lateral epicondylitis. However, he is not impaired and he has no incapacity for work. He is ready, willing and able to work full-time. The state of the availability of the work that he would like to do is not relevant. 14. Australia Post is not liable to pay compensation to Mr Chapman." (Emphasis added) Applicable law 6 The Safety, Rehabilitation and Compensation Act 1988 relevantly provides: "14(1) 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. 19(1) This section applies to the employee who is incapacitated for work as a result of an injury, other than an employee to whom section 20, 21, 21A or 22 applies. (2) Subject to this Part, Comcare is liable to pay compensation to the employee in respect of the injury, for each of the first 45 weeks (whether consecutive or otherwise) during which the employee is incapacitated, of an amount calculated under the formula: NWE – AE where: NWE is the amount of the employee's normal weekly earnings; and AE is the amount per week (if any) that the employee is able to earn in suitable employment. (3) Subject to this Part, Comcare is liable to pay to the employee, in respect of the injury, for each week during which the employee is incapacitated, other than a week referred to in subsection (2), compensation: … (d) where the employee is employed for more than 50% but not more than 75% of his or her normal weekly hours during that week – of an amount that, when added to the amount that he or she was able to earn during that week in suitable employment, results in an amount equal to 90% of his or her normal weekly earnings; …." (Emphasis added) 7 In Arnott's Snack Products Pty Limited v Yacob (1985) 155 CLR 171 at 178 the majority of the High Court (Mason, Wilson, Deane and Dawson JJ) said: "It follows that the concept of partial incapacity for work is that of reduced physical capacity, by reason of physical disability, for actually doing work in the labour market in which the employee was working or might reasonably be expected to work. Under s. 11(1), an applicant's entitlement to compensation will depend on his loss of earning power. This flows, not from the concept of partial incapacity for work, but from the nature of the express limitation which the sub-section places on the amount of compensation payable. On the other hand, the words "partial incapacity for work" in subs-s. (2) must be given their natural and established meaning, there being no limitation or other restricting context which confines the employer's obligation to offer suitable employment to an injured employee who is suffering actual economic loss." (Emphasis added) 8 Sections 43(2) and (2B) of the AAT Act require the AAT to give reasons for its decision either orally or in writing and where it gives written reasons they must include "findings on material questions of fact and a reference to the evidence or other material on which those findings were based". It is therefore an error of law, in the sense that it is contrary to the statutory duty of the AAT, to fail to give reasons and make appropriate findings and references. The applicable principles were recently considered by Burchett J in John Martin v Australian Postal Commission (1999) FCA 655 particularly at pars 18 and 19. His Honour there pointed out that the essence of the requirement that the AAT must give reasons is that its decision is understandable so that the party affected may be able to see the basis of the decision and whether it is legally sound or affected by error. If the latter is the case then the dissatisfied party can consider an appeal. Also, as his Honour pointed out, a further basis for this approach is that the discipline of disclosing reasons helps to keep the decision-maker on the path of sound reasoning towards sound conclusions. 9 In relation to the appeal, subs 44 (4) and (5) of the AAT Act provide as follows: "(4) The Federal Court of Australia shall hear and determine the appeal and may such order as it thinks appropriate by reason of its decision. (5) Without limiting by implication the generality of subsection (4) the orders that may be made by the Federal Court of Australia on an appeal include an order affirming or setting aside the decision of the Tribunal and an order remitting the case to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the Court. 10 Generally speaking, the appropriate course for the Federal Court to adopt where it finds a material error of law in an AAT decision was considered by the Full Federal Court (Davies, Sheppard and Ryan JJ) in Commonwealth Banking Corp v Percival (1988) 20 FCR 176 at 182, where the Court said: "The Administrative Appeals Tribunal is … required by s 43 of the Administrative Appeals Tribunal Act 1975 (Cth), when giving its decision, to state the reasons for it, to set out its findings of fact and to make reference to the evidence upon which those facts were found. That is an obligation which the Tribunal undertook in the present case and its reasons are lengthy, careful and detailed. Such reasons ought not to be examined with an unduly critical or technical eye but should be read fairly with each sentence being weighed up and considered in the context of the whole. If, on the reading of such reasons, an error of law appears, either by express statement or by necessary implication and if that error of law affected the decision reached, then the decision must be set aside. If a material error of law is so identified, it is of no consequence that the decision reached could have been supported on a different basis, that there was evidence, which, if accepted, would have justified the ultimate decision."(Emphasis added) 11 Percival's case is also authority for the proposition that where evidence is complex and provides a basis for differing conclusions it is appropriate to remit a matter to the Tribunal to be heard and decided again. The contrary position can arise where there is no fact finding left for the Tribunal to do: see Repatriation Commission v Nation (1995) 57 FCR 25. Percival's case has been followed or cited with approval on many occasions. Among the more recent is Secretary, Department of Social Security v Ekis (1998) 85 FCR 382 at 389-390. Another principle relevant to the present case is that where there was only one conclusion open to the AAT upon the evidence and where it was a conclusion of law, there may be no advantage gained by remitting the matter to the AAT and the Court may therefore make the order which the Tribunal was bound to make: see McBay v Director General of Social Security (1985) 3 AAR 327. REAsoning 12 In the present case, on the face of the reasons for decision, it cannot be said that they disclose the reasoning process by which the decision was reached. Despite the fact that there was conflicting evidence given by the medical experts there was no discussion of the oral or written evidence, or the factors which provided a basis for preferring one body of evidence to another. In addition the applicant gave unchallenged evidence as to the pain suffered by him in relation to his elbow but this was not discussed in the reasons. This is not a case where the facts were so clear and undisputed that it could be said that there was in substance no issue between the parties on this point. 13 In my view, there was in this case a failure to comply with the requirements of s 43 of the AAT Act in that no proper findings were made. No reference was made to important evidence and no reasoning process was disclosed. In addition, Counsel for Mr Chapman submitted that the decision should be set aside because the AAT had decided the appeal on a basis which was not in issue between the parties on the hearing before the AAT. Counsel for the applicant says that before the AAT there was no issue that the applicant was incapacitated for his pre-injury occupation at relevant times. However, in par 14 of its decision, the AAT decided that he was not impaired and had no incapacity for work and that he was ready, willing and able at all times to work full time. It seems to me that this issue as to his incapacity for performing the work which he had previously been performing was not in dispute before the Tribunal. Nevertheless, the AAT decided that he was not impaired and had no incapacity for work because he was ready, willing and able to work full time. 14 I see considerable force in the submissions by the applicant in relation to this aspect of the case. In my view this constituted a further error of law on the part of the AAT. 15 Having regard to the above considerations the decision of the AAT should be set aside. 16 I was referred by Counsel for the respondent to evidence from the transcript and reports which, so it was said, provides a basis on which the Tribunal could have found that the applicant was not incapacitated due to lateral epicondylitis in the relevant period. It was said that this evidence made referring the matter back to the AAT futile. These references, however, do not advance the respondent's case because the relevant question is not whether the AAT, on proper reasoning, might have been able to reach the same conclusion, but whether this was the only conclusion that could be reached. It is by no means beyond argument, on the evidence to which I was referred, that the applicant did not suffer from this incapacity in the relevant period or that no other conclusion to that reached by the AAT was open to it. In particular the evidence of Dr Stabler, under cross-examination, was that he had absolutely "no doubt" that the applicant had lateral epicondylitis. This view was shared by Dr John Sweeney in his report of 4 December 1998 which was not referred to in the reasons. Dr Freeman, in a report dated 18 December 1998 diagnosed the applicant with a painful dysfunctional right arm, resulting from repetitive boring work, and in a report dated 5 July 1999 Dr Stabler also confirmed his opinion that the applicant had lateral and medial epicondylitis of the right elbow. This evidence is not discussed in the AAT reasons for the decision under appeal. 17 I do not accept that remittal would be futile or a waste of time. The application should be remitted to the AAT, differently constituted, for determination in accordance with law. 18 In relation to the terms of the remittal it was submitted for Mr Chapman that it should be on the basis that, having regard to the way the case has been conducted by the respondent, a concession had been made by the respondent as to incapacity at relevant times. In my opinion such a limitation on the remittal is not appropriate. I consider that the matter in its entirety should be remitted to the AAT in view of the fact that the primary basis for review is the failure to give reasons and make findings. It is not appropriate in this case for the Court to decide any substantive issues which involve factual considerations. The preferable course is to leave this question for consideration and determination by the AAT. 19 As to costs the respondent should pay the applicant's costs of this appeal. I am however, satisfied that the present circumstances fall within s 6 of the Federal Proceedings (Costs) Act 1981 because the appeal has succeeded on a question of law and that it is appropriate that I grant to the respondent a Costs Certificate in respect of the appeal. I am of the opinion that it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by it in relation to the appeal and the costs incurred by the appellant in respect of the appeal that have been or are required to be paid by the respondent to the appellant in pursuance of these orders. 20 Accordingly, the order of the Court is that the appeal should be allowed. The decision of the AAT should be set aside. The matter is remitted to the AAT, differently constituted, for determination in accordance with law. The respondent should pay the appellant's costs but should have a Certificate under s 6 of the Federal Proceedings (Costs) Act 1981. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin . Associate: Dated: 23 November 2000 Counsel for the Applicant: J Hislop QC R Harrington Solicitor for the Applicant: Mitchell, Playford & Radburn Counsel for the Respondent: B Skinner Solicitor for the Respondent: Graham Jones, Lawyers Date of Hearing: 10 November 2000 Date of Judgment: 23 November 2000