FEDERAL COURT OF AUSTRALIA Smith v Caltex Australia Petroleum Pty Limited [2004] FCA 480 COMPENSATION – issue estoppel – injury to applicant in 1985 – findings made by Judge concerning applicant's resultant incapacity in 1992 – whether Administrative Appeals Tribunal bound by earlier findings when determining alleged incapacity for period after 1998. Administrative Appeals Tribunal Act 1975 (Cth) ss 33, 37. Seafarers Rehabilitation and Compensation Act 1992 (Cth) s 88. Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd (2003) 202 ALR 450 referred to Commonwealth v Sciacca (1988) 17 FRC 476 referred to Egri v DRG Australia Ltd (1988) 19 NSWLR 600 referred to Miller v University of New South Wales (2003) 200 ALR 565 referred to Sande v Registrar, Supreme Court of Queensland (1996) 64 FCR 123 applied HAROLD CHARLES SMITH v CALTEX AUSTRALIA PETROLEUM PTY LIMITED N 15 of 2004 WHITLAM J 23 APRIL 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 15 of 2004 ON APPEAL FROM THE GENERAL ADMINISTRATIVE DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: HAROLD CHARLES SMITH APPLICANT AND: CALTEX AUSTRALIA PETROLEUM PTY LIMITED RESPONDENT JUDGE: WHITLAM J DATE OF ORDER: 23 APRIL 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal is dismissed. 2. The decision of the Administrative Appeals Tribunal is affirmed. 3. The applicant is to pay the respondent's costs. 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 N 15 of 2004 ON APPEAL FROM THE GENERAL ADMINISTRATIVE DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: HAROLD CHARLES SMITH APPLICANT AND: CALTEX AUSTRALIA PETROLEUM PTY LIMITED RESPONDENT JUDGE: WHITLAM J DATE: 23 APRIL 2004 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal from a decision of the Administrative Appeals Tribunal ('the Tribunal') given on 8 December 2003 in a proceeding under s 88(1) of the Seafarers Rehabilitation and Compensation Act 1992 ('the Act'), whereby it affirmed the decision of the respondent disallowing a claim for compensation made by the applicant. The claim in question was made under cover of a letter dated 31 July 2001 from the applicant's solicitors. It sought compensation for an injury, which happened on 19 September 1985 in the course of the applicant's employment on board the respondent's ship 'W.M. Leonard', resulting in partial incapacity for the period occurring after 26 October 1998. The Tribunal found that on 19 September 1985 the applicant did suffer an injury, which it described as 'a muscular strain of the thoracic spine'. However, it also found that, before the applicant recommenced work on 8 February 1989, 'the effects of [that] incident had ceased'. These key findings of the Tribunal are challenged by the applicant in the questions of law stated in his notice of appeal. 2 In order to explain how those questions can be said to arise on this appeal, I shall begin by describing aspects of the processing of the applicant's claim by the respondent and the nature of the evidence before the respondent when it made its decision disallowing the applicant's claim. That claim was supported by a medical certificate dated 16 March 2001 from a general practitioner, Dr Harry Jarvis, stating that the applicant was suffering from thoracic and chest pain caused by the incident on 19 September 1985. The first thing that the respondent appears to have done was to require the applicant, pursuant to s 66(1) of the Act, to undergo a medical examination by a surgeon, Dr Peter Burke, on 31 October 2001. The respondent rested its original determination that it was not liable to pay the compensation sought by the applicant on the report prepared by Dr Burke following that examination. When the applicant's solicitors requested the respondent to reconsider its determination, they advanced essentially two reasons. First, it was contended that Dr Burke's opinion contradicted findings made on 1 April 1992 by a District Court Judge and that the respondent was 'estopped' from disputing those findings. Secondly, the applicant's solicitors baldly stated, without any amplification, that the 'findings of Dr Peter J Burke contradict the opinions of Mr Smith's treating doctors.' (The respondent's solicitors responded straightaway to the estoppel point, expressing their own view that any 'District Court findings' could have no application to periods occurring after the date on which they were made.) In any event, the respondent put in train the statutory arrangements with Comcare for a Comcare officer to assist it in reconsidering the determination. The Comcare officer recommended that the original determination be affirmed, and the respondent made a decision to that effect on 31 March 2002. 3 An application for review of that decision was lodged with the Tribunal on 9 May 2002. This obliged the respondent to prepare a statement pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 ('the AAT Act'). Copies of that statement and the so-called 'T' documents are included in the appeal papers. These documents include the findings that the applicant's solicitors alleged gave rise to an issue estoppel. They were made in proceedings for compensation under the Seamen's Compensation Act 1911 ('the repealed Act'). Those proceedings involved two distinct claims for compensation by the applicant, one against the Australian National Line ('the ANL') in respect of an accident on one of its ships on 25 July 1983 and the other against the respondent in respect of the accident on the ship 'W.M. Leonard' on 19 September 1985. Questions as to the liability to pay compensation, as to the amount and duration of compensation, and as to 'contribution' between the ANL and the respondent were settled by arbitration before a judge of the District Court of New South Wales (McCredie DCJ) on 1 April 1992. His Honour made an award finding that (1) on 25 July 1983 in the course of his employment with the ANL the applicant sustained an injury to his thoracic spine and chest and was thereafter either totally or partially incapacitated for work for various periods, (2) on 19 September 1985 in the course of his employment with the respondent the applicant sustained an injury to his thoracic spine and chest and was thereafter totally incapacitated until 11 September 1987, (3) as a result of the injuries sustained on 25 July 1983 and 19 September 1985 the applicant was totally incapacitated for work from 12 September 1987 until 6 February 1989 and had been partially incapacitated for work from 8 February 1989 to date, and (4) the incapacity of the applicant for employment since 7 February 1989 had been caused in the proportion of 60 per cent by the injury occasioned in the employ of the ANL and 40 per cent by the injury sustained in the employ of the respondent. His Honour also made an order in the award that the two employers make weekly payments of compensation for periods from 12 September 1987 up until 22 August 1991. (The respondent had claimed weekly payments to the date of arbitration in respect of partial incapacity.) 4 Reports from doctors who treated the applicant prior to the arbitration by McCredie DCJ were included in the 'T' documents. These doctors were his general practitioner Dr John Alam, an orthopaedic surgeon Dr Thomas Claffey, the visiting medical officer at Gladstone Hospital Dr David Allen, a cardiologist Dr Andrew Hickey and a neurosurgeon Dr John Sheehy. 5 The s 37 statement also referred to a claim for compensation under the Act that the applicant had made against another employer ('Stolt'). This claim related to a 'left thoracic cervical back injury' sustained on 26 October 1998, for which Stolt had determined it would not pay compensation after 5 February 1999. That determination had been the subject of an earlier application for review in Tribunal proceeding N 1999/551. The respondent included in the 'T' documents in the present case all the 'T' documents from that proceeding together with a copy of the decision made by the Tribunal on 26 October 1999 in accordance with s 42C(2) of the AAT Act affirming Stolt's determination. Those 'T' documents included certificates from a series of general practitioners covering periods from 9 April 1996 to 18 June 1996 and from 29 October 1998 to 28 February 1999, a short report from Dr Sheehy following a consultation on 4 January 1999, reports from medico-legal examinations arranged by Stolt, and reports from four different radiologists. 6 Against that backdrop of the evidence before the respondent and of the documents considered by it to be relevant to the review by the Tribunal in the present case, I now turn to that review. On 13 March 2003 the Tribunal held a hearing at which both parties were represented by counsel. Counsel for the applicant tendered a number of reports by doctors who had treated his client. These included reports by Dr Claffey of an examination on 1 March 1985 and of a manipulation of the thoracic spine on 10 April 1985. (The reports from Dr Claffey in the 'T' documents already covered the period from 24 June 1983 to 31 January 1986. They show that Dr Claffey had suggested to Dr Alam that an independent second orthopaedic opinion be obtained, and Dr Alam had apparently referred the applicant to Dr John Collins for this purpose). A medico-legal report dated 2 July 1986 by Dr Collins was also included in the tender together with several reports of Dr Sheehy. (Two of these reports dealt with matters already covered in a medico-legal report from Dr Sheehy in the 'T' documents, another covered an examination on 15 February 1999, and the final one was a report to the applicant's solicitors following a medico-legal examination arranged by them on 14 November 2002.) A report dated 1 November 2002 by Dr Jarvis was the only other report by a treating doctor amongst the medical reports tendered by counsel for the applicant, which otherwise comprised reports from medico-legal examiners arranged by the ANL on 22 October 1984 and 1 February 1985 and by Stolt on 8 December 1998. Counsel for the respondent tendered four reports by Dr Burke, three of which were prepared prior to the arbitration by McCredie DCJ and one of which reported on an examination of the applicant on 2 December 2002. Counsel for the applicant objected to the reception of this evidence and of the report of 31 October 2001 (which was included in the 'T' documents) on the ground that the opinion expressed by Dr Burke was not posited upon an acceptance of McCredie DCJ's findings. The Tribunal determined to receive the reports of Dr Burke. Finally, counsel for the respondent tendered the heads of agreement signed on 26 October 1999 by the applicant and on behalf of Stolt in Tribunal proceeding N 1999/551 together with a deed of release between those parties signed by the applicant on 16 November 1999. (These documents reveal that the applicant was paid $50,000 in settlement of all his claims for compensation against Stolt.) The applicant and Dr Burke also gave oral evidence. 7 This mass of evidence was subjected to close analysis by the Tribunal in its reasons for decision. After referring generally to the evidence before it and specifically to the oral evidence of the applicant, the Tribunal disposed of the estoppel argument as follows (at [26]): 'The Tribunal was mindful also of the Respondent's submissions … emphasising that the claims before this Tribunal related to periods different from those in [the case before McCredie DCJ], and that accordingly … the principles in regard to re-litigation of the same issues, did not apply in this case. The Tribunal agreed with the submissions of the Respondent that the claim of Mr Smith before this Tribunal related to a different period, and that it was not a question of re-litigation of the same issues. The Tribunal also accepted that there was no issue estoppel in issue here.' The Tribunal's reasons then pick over the documentary evidence in some detail, particularly that contained in the various medical reports. The Tribunal summarized (at [58]-[62]) the contents of Dr Claffey's reports. The Tribunal stated (at [90]) its conclusions on the medical evidence in a series of dot points. Specifically, it said of Dr Claffey's evidence: '· The Tribunal accepted the evidence of Dr Claffey, Mr Smith's treating orthopaedic surgeon who back in 1983 (T17), and 1984 (T15), opined that Mr Smith's injuries were muscular strains of the thoracic spine, and again in 1987, stated that the 1985 incident constituted material aggravation of Mr Smith's underlying thoracic spondylosis. · The Tribunal also accepted Dr Claffey's statement at Exhibit A7, indicating a second time, that he did not understand the severity of Mr Smith's complaints. Dr Claffey at T17 in 1986, stated that Mr Smith's X-rays did not reveal significant pathology, and that notwithstanding complaints of pain by Mr Smith, the clinical signs were minimal. This was corroborated by Dr Burke who stated he was unable to explain the pattern of radiation of pain in rational anatomical terms.' Its final conclusion on the medical evidence stated: '· … the Tribunal could not be satisfied that Mr Smith is still suffering the effects of the 1985 incident. The Tribunal preferred the evidence of Drs Claffey and Burke that the incident was a muscular strain of the thoracic spine. Dr Burke opining that the effects would have subsided in a period of six to twelve weeks. The Tribunal was further persuaded by the opinions of Drs Claffey and Burke, Dr Claffey stating that he could not fully understand the severity of Mr Smith's complaints, and Dr Burke opining that he was unable to explain the pattern of radiation in rational anatomical terms. Accordingly, the Tribunal finds that the effects of the 1985 incident had ceased before the Applicant commenced work on "Stolt Australia" in February 1989.' 8 The applicant's notice of appeal relevantly states: '2. The questions of law raised on appeal are: 2.1 Whether it was open to the Tribunal to find that it was not bound by the principle of issue estoppel. 2.2 Whether the Tribunal erred in law in the way it approached the medical evidence. 2.3 Whether the Tribunal erred in law in the way it approached the legal issue of causation. 2.4 Whether it was open to the Tribunal to find, contrary to the findings made by the District Court of New South Wales on 1 April 1992, that the work related effects of the 1985 injury had resolved well before the Applicant returned to sea in February 1989. 2.5 Whether the Tribunal misdirected itself as to the proper test to be applied in relation to the acceptance or otherwise, of expert evidence as enunciated in Makita (Australia) Pty Limited v Sprowles (2001) 52NSWLR 705 … 4. Grounds: 4.1 The Tribunal erred in law in finding that it was not bound by the principle of issue estoppel. 4.2 The Tribunal erred in law in finding, contrary to the findings made by the District Court of New South Wales on 1 April 1992, that the work related effects of the 1985 injury had ceased before February 1989. 4.3 The Tribunal erred in law in accepting medical evidence which was inconsistent with the findings of the District Court. 4.4 The Tribunal erred in law in the way in which it approached the medical issue of causation. 4.5 The Tribunal erred in law by failing to give sufficient reasons for its decision.' 9 Counsel for the respondent challenged the validity of the questions of law so stated by the applicant. This attack was founded on the comments of Branson J in Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd (2003) 202 ALR 450 at 458-460 ([41]-[47]). The criticism of the notice of appeal is justified. Nonetheless, the oral argument of senior counsel for the applicant (who did not appear at the hearing before the Tribunal) was presented with admirable economy and was confined essentially to two points. It is easy enough to perceive whether they truly give rise to the questions of law. 10 Issue estoppel was put at the forefront of the appeal. It was submitted that the Tribunal's finding (reproduced in [7] above) that 'the effects of the 1985 incident had ceased … before February 1989' was in conflict with estoppels arising from McCredie DCJ's findings (noted in [3] above) that as a result of the injury sustained on 19 September 1985 the applicant was totally incapacitated for work until 6 February 1989 and partially incapacitated for work from 8 February 1989 to 1 April 1992. In support of this submission counsel for the applicant relied upon an unreported judgment at first instance in a case, the appeal in which is reported as Egri v DRG Australia Ltd (1988) 19 NSWLR 600. That case involved giving effect to an estoppel arising from a finding by the Workers' Compensation Commission of New South Wales in the assessment of damages in a negligence action. The Commission's finding in question, namely, that no work-related disc lesion had been established, was regarded by both the trial judge and the Court of Appeal as fundamental to the Commission's determination of the issue of incapacity. However, the Court of Appeal expressly refrained (at 610) from deciding whether ultimate findings concerning capacity in the Commission were capable of creating relevant estoppels. 11 The findings in McCredie DCJ's award are, of course, what Clarke JA referred to in Egri as 'ultimate findings concerning capacity'. They repeat the very terms of the findings of fact recorded in the 'reasons for judgment' published with his award. Those reasons do not include any other specific findings of fact which may be regarded as fundamental to those ultimate conclusions. They plainly do assume a different view of 'the effects' of the 1985 accident as at February 1989 and April 1992 than that reflected in the observations of the Tribunal about the evidence in this case. But that it is not to the point. The findings made by McCredie DCJ were not made in respect of any question that fell to be decided by the Tribunal, which was concerned with the applicant's alleged incapacity relating to the period after 26 October 1998. The Tribunal correctly understood that the issues before it did not involve the re-litigation of the question of the applicant's incapacity in the period prior to 1 April 1992. 12 Had the findings of McCredie DCJ covered matters to be decided by the Tribunal, there would still have been a problem identifying any clear estoppel as a result of the form of those findings. The attribution of joint liability to both ANL and the respondent and the consequent apportionment of responsibility between them would appear to represent an infelicitously expressed attempt to deal with the question of any liability of the ANL to make contributions to the respondent under s 5C of the repealed Act. Such findings are not apt to give rise to an estoppel against the respondent alone in favour of the applicant. 13 Finally and most importantly, there is the question whether there is any room at all for the application of the doctrine of issue estoppel in proceedings before the Tribunal. The authorities on this topic have been recently collected and examined in Miller v University of New South Wales (2003) 200 ALR 565 at 579-585 ([48]-[67]). I note that the application of the principle was left open in Commonwealth v Sciacca (1988) 17 FRC 476. 14 No doubt, Parliament could have provided in the Act that findings of an arbitrator under the repealed Act were to be accorded an estoppel-like status, but it has not done so. Instead, extensive provision is made in Parts 5 and 6 of the Act for the way in which claims for compensation are to be made and determined and in which determinations are to be reconsidered and reviewed. As has been mentioned, s 66 gives the employer power to require a medical examination. Section 70 makes it clear that legal professional privilege does not apply to a medical report such as that of Dr Burke produced after the examination on 31 October 2001. Plainly it is intended that either party may use such a report in a review by the Tribunal. The Act envisages too that information or documents given pursuant to requests under ss 67, 68 or 83 may be used on such review. The requirements of s 37(1) of the AAT Act are not modified by the Act. The admission of certain evidence in proceedings before the Tribunal requires leave under s 90 of the Act but, subject to that limitation, the provisions of s 33 of the AAT Act (to which the Full Court drew attention in Sciacca) apply. In those circumstances, even if I am wrong and the findings of McCredie DCJ were otherwise capable of giving rise to an estoppel in subsequent proceedings, I am instructed by the decision of the majority in Sande v Registrar, Supreme Court of Queensland (1996) 64 FCR 123 at 127, 145 that the Tribunal would not only be free, but bound, to arrive at its own findings of fact in order to determine any issue relating to the applicant's incapacity. The doctrine of issue estoppel thus has no application to a proceeding under s 88(1) of the Act. In my view, no relevant error of law is thus disclosed in the Tribunal's reasons for decision. 15 The other ground developed orally by senior counsel for the applicant concerned the 'finding' about Dr Claffey's evidence as it is recorded in the final dot point of the Tribunal's reasons reproduced at [7] above. It was submitted that there was no 'evidentiary foundation' for such a finding of fact and that this constituted an error of law. Counsel supported this submission by reference to a medico-legal report dated 17 July 1987 from Dr Claffey to the applicant's solicitors, in which he expressed the opinion that 'the incident of the 19th September 1985 constituted material aggravation of [the applicant's] underlying thoracic spondylosis'. The Tribunal had, of course, earlier referred to that very opinion in its 'findings' about Dr Claffey's evidence. I am bound to say that I found hard to grasp the point counsel was trying to make. The large range of evidence and of material before the Tribunal, which included recent medical opinions, has been described and, whilst I have thought it unnecessary to deal with the contents of various reports, it may be accepted that that material would permit alternative conclusions about the applicant's alleged incapacity based on different views about his condition expressed at various points of time. However that may be, no error of law can be made out by attempting to show that in making a finding of fact the Tribunal grounded its conclusion on material that was less persuasive or cogent than other material. This argument on behalf of the applicant must also fail. 16 The other grounds of appeal were quite properly not the subject of oral submissions. In particular, it would have been quite ludicrous to suggest that the Tribunal erred in some fashion in regard to its obligation to provide reasons for its decision. The failure to state proper questions of law is, in any event, otherwise fatal to the appeal. 17 The appeal will be dismissed with costs. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam. Associate: Dated: 23 April 2004 Counsel for the applicant: Larry King SC with B D Dooley Solicitor for the applicant: W G McNally & Co Counsel for the respondent: B R Ferrari Solicitor for the respondent: Ebsworth & Ebsworth Date of hearing: 5 April 2004 Date of judgment: 23 April 2004