FEDERAL COURT OF AUSTRALIA Australian Postal Corporation v Nunez [2014] FCA 1095 Citation: Australian Postal Corporation v Nunez [2014] FCA 1095 Appeal from: Re Edison Nunez and Australian Postal Corporation [2014] AATA 125 Parties: AUSTRALIAN POSTAL CORPORATION v EDISON NUNEZ File number: NSD 348 of 2014 Judge: GRIFFITHS J Date of judgment: 10 October 2014 Catchwords: ADMINISTRATIVE LAW – interpretation of s 37(7) of the Safety Rehabilitation and Compensation Act 1988 (Cth) – appeal from decision of Administrative Appeals Tribunal – whether a question of law arises – Meaning of "reasonable excuse". Legislation: Administrative Appeals Tribunal Act 1975 (Cth) ss 43(2B), 44(1) Safety Rehabilitation and Compensation Act 1988 (Cth) ss 36, 37, 38 Cases cited: Australian Postal Corporation v Forgie (2003) 202 ALR 63 Australian Postal Corporation v Pascoe [2003] FCA 390 Australian Postal Corporation v Pascoe [2005] FCA 289 Australian Postal Corporation v Sinnaiah (2013) 213 FCR 449 Comcare v Singh [2012] FCA 136 Pascoe v Australian Postal Corporation [2004] FCAFC 4 Telstra Corporation v Administrative Appeals Tribunal [2003] FCA 102 Date of hearing: 30 September 2014 Place: Sydney Division: GENERAL DIVISION Category: CATCHWORDS Number of paragraphs: 68 Counsel for the appellant: M Best Solicitors for the appellant: Sparke Helmore Counsel for the respondent: B McManamey Solicitors for the respondent: Turner Freeman IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 348 of 2014 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: AUSTRALIAN POSTAL CORPORATION Appellant AND: EDISON NUNEZ Respondent JUDGE: GRIFFITHS J DATE OF ORDER: 10 OCTOBER 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the respondent's costs of and incidental to the proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 348 of 2014 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: AUSTRALIAN POSTAL CORPORATION Appellant AND: EDISON NUNEZ Respondent JUDGE: GRIFFITHS J DATE: 10 OCTOBER 2014 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). Such an appeal is confined to a question of law. That is an important jurisdictional limitation. 2 The appeal relates to a decision dated 7 March 2014 of the Administrative Appeals Tribunal (AAT). The AAT decided that: (a) the respondent's refusal and failure to attend Waterloo Mail Centre on 21 March 2012, as required by the appellant's rehabilitation program dated 19 March 2012, was not without reasonable excuse for the purposes of s 37(7) of the Safety Rehabilitation and Compensation Act 1988 (Cth) (the Act); (b) the appellant's decision dated 22 May 2012 should be set aside and substituted with a decision that the respondent did not fail or refuse to undertake the program without reasonable excuse; (c) the payment of benefits and expenses suspended as a result of the appellant's decision should be made from the date they were suspended; (d) the matter be remitted to the appellant for reinstitution of payments and calculation of monies owed. 3 In the notice of appeal, the following questions of law are identified: (a) whether, on a proper construction of s 37(7) of the Act, the AAT was precluded from making a finding that the respondent had a reasonable excuse for his refusal and failure to attend Waterloo Mail Centre on 21 March 2012, as required by the program; (b) whether the facts fully found by the AAT fell within s 37(7), properly construed; and (c) whether the AAT complied with its duty under s 43(2B) of the AAT Act to give reasons for concluding that the respondent's refusal and failure to attend the Centre on 21 March 2012 was not without reasonable excuse. 4 No argument was presented at the hearing of the appeal in support of the third question of law and it was confirmed by Mr Best, who appeared for the appellant, that it was abandoned. 5 The grounds of appeal in relation to the remaining two questions of law were stated in the notice of appeal to be as follows: (a) the AAT misdirected itself by finding that the reasons provided by the respondent as to why he refused or failed to attend to the Waterloo Mail Centre on 21 March 2012 were determinative of the question that arose for its consideration under s 37(7) of the Act; (b) the AAT misdirected itself by conducting a review of the appropriateness of the program; and (c) the AAT misdirected itself by failing to conduct a merits review and, in particular, by failing to assess the reasonableness of the respondent's excuses for not undertaking the program. Broad factual background 6 The broad factual background to the appeal is not in dispute. It may be summarised as follows. 7 The respondent has been employed by the appellant for 25 years in administrative positions at various Sydney suburban mail centres. He worked at the Rockdale Mail Centre until it was closed. He was then appointed to work at mail centres at Croydon Park and Strathfield. He claimed that at these two centres he encountered harassment and bullying, which he had not encountered at Rockdale. He complained repeatedly to the appellant. He applied for positions at Kingsgrove, which is near to where he lives, but was unsuccessful. When he was notified on 25 August 2011 that he would not be transferred to Kingsgrove, he ceased work that day. 8 On 7 September 2011, the respondent lodged with the appellant a claim for rehabilitation and compensation. He described his illness as acute anxiety reaction, post-traumatic stress and depression. He consulted his local doctor, Dr Nigro, and has stayed off work ever since, during which time he has been in what the AAT described as "acrimonious discourse" with the appellant. 9 The appellant accepted that the respondent suffered psychological injury in connection with his work and he received payments of compensation and medical expenses under the Act. 10 On 13 October 2011, the respondent was assessed by Dr Abeya, a consultant psychiatrist who was retained by the appellant. In her report dated 17 October 2011, Dr Abeya stated her belief that, if the respondent was exposed to his previous work environment, it was likely that he would feel the same amount of anxiety that he had expressed. She added: Given the situation and his incapacity to accept going back to work in the same environment, I feel he should be considered for employment at another centre. 11 The respondent was again assessed by Dr Abeya on 8 March 2012. She prepared a further report dated 12 March 2012. In that report, she stated: Given the current level of symptoms I feel that it would be necessary to start Mr Nunez on just a few hours of work a day. I would suggest possibly starting with two hours of work and slowly working up to a full day, entirely being dependent on his recovery. What is possibly most important is that he does not return to work at Strathfield, which was related to the previous allegation of harassment, as this would clearly evoke a lot of difficult emotions and possibly worsen his symptoms. I believe work at an office as close to his home as possible would be most advisable given his current state of illness. Yet as Mr Nunez himself expressed, it would be possible for him to restart work in a couple of weeks provided that he comes to an agreement with Australia Post. I anticipate that the major restriction would be more the difficulty in coming to an agreement about a place of work, which would not be entirely due to his psychiatric illness. From a practical point of view, I feel that Mr Nunez himself would only accept work at Kingsgrove, and I wonder whether this may be possible as an initial place of work in the interest of having this worker back to employment as soon as practicably possible. Certainly I do not feel there is any major psychiatric impediment to Mr Nunez working in another place that is close to his home. (Emphasis added). 12 On 19 March 2012, the appellant issued the respondent with a determination under s 37(1) of the Act. The determination described the respondent's "accepted claim condition" as "adjustment disorder". The letter then advised that the respondent had been assessed as capable of undertaking a rehabilitation program, a copy of which was attached to the letter. He was directed to commence rehabilitation in accordance with that program. 13 The rehabilitation program bore a commencement date of 21 March 2012 and a target end date of 4 April 2012. The respondent was directed under the program to work two hours each weekday carrying out administrative duties at Waterloo Mail Centre. 14 As noted above, the respondent received medical treatment from his general practitioner, Dr Nigro. It is unnecessary to detail all that treatment. However, the appellant emphasised certain matters, which I will now outline. 15 On 20 March 2012, the respondent consulted Dr Nigro. Dr Nigro signed a medical certificate at 10:30 am on that day. The certificate stated that the respondent was fit for work from 23 March 2012 to 23 April 2012, subject to certain restrictions. Those restrictions were that he work at the closest Australia Post position to his home and that he work only two hours a day. 16 Dr Nigro then signed a further medical certificate in respect of the respondent, which is also dated 20 March 2012 (it might be noted that the appellant did not accept that date was accurate, as will be discussed below). 17 In contrast with his previous medical certificate, Dr Nigro certified that the respondent was unfit for all work from 23 March 2012 to 23 April 2012. 18 In the proceedings before the AAT, Dr Nigro was closely cross-examined about the timing and circumstances surrounding the issue of the second medical certificate. 19 The respondent failed to comply with the direction to commence the rehabilitation program on 21 March 2012. By letter dated 2 April 2012, he wrote to the appellant. He claimed that Dr Abeya had "offered me two weeks to settle down with my condition and start at Kingsgrove" and that he had told her that "I would try". He then added: At no time I agreed (sic) to Dr Abeya that I could start anywhere else besides Kingsgrove, this is the second time that I have been offered Kingsgrove to start my return to work but for some reason I get told last minute (sic) to start my return to work somewhere different. 20 By letter dated 16 April 2012, the appellant advised the respondent that it had made a determination under s 37(7) of the Act that his compensation be suspended on and from 13 April 2012 until such time as he began to undertake the rehabilitation program which was the subject of the determination dated 19 March 2012. 21 By letter dated 23 April 2012, the respondent sought a reconsideration of that determination. In that letter he said that he was "willing to try to do anything at Kingsgrove… including delivering if necessary as long as I can get my return to work happening as recommended and offered by your own doctors". It was common ground that this was a reference to Dr Abeya. 22 By a letter dated 22 May 2012, the appellant advised the respondent that his reconsideration was unsuccessful. 23 The appellant then appealed that decision to the AAT. Summary of AAT's reasons 24 The AAT outlined the factual and legal background to the dispute. The respondent (described in the AAT as the "applicant") contended that he was not without reasonable excuse within the meaning of s 37 of the Act for not complying with the rehabilitation program. The AAT noted that s 37(7) of the Act provided that, where an employee refused or failed, without reasonable excuse, to undertake a rehabilitation program, the employee's rights to compensation were suspended until such time as the employee begins to undertake the program. The AAT also drew attention to s 37(8), which provided that where an employee's right to compensation was suspended under s 37(7), compensation was not payable in respect of the period of the suspension. 25 The critical issue for the AAT was whether the respondent was not without a "reasonable excuse" for refusing or failing to undertake the rehabilitation program. The AAT noted that the respondent had given several reasons why he did not comply with the program's direction to work at Waterloo from 21 March 2012. The Tribunal then identified what it described as four such reasons. As will shortly emerge, I consider that only the first two of those matters can properly be described as reasons (or "excuses" for the purposes of s 37(7) of the Act) and that the other two matters are not correctly described as "excuses" for that purpose. I should immediately add, however, that this mischaracterisation does not itself give rise to any error on a question of law on the part of the AAT. 26 The first reason or excuse is described in [39] of the AAT's reasons. It relates to the respondent's claim that he had a reasonable expectation that he would be sent only to Kingsgrove in the first instance because that was what the respondent's psychiatrist (Dr Abeya) had agreed with him. After noting that Dr Abeya had not been called to give evidence, the AAT said that it doubted that she had committed the respondent to a start nowhere else but Kingsgrove. On the other hand, however, the AAT found that it accepted that Dr Abeya had given the respondent the impression that she would recommend a start at Kingsgrove, which was the closest centre to his home and was staffed by people he knew. The AAT concluded at [41] that "in the context of this matter, I believe it was reasonable for the [respondent] to consider that the [appellant] would follow the doctor's advice, and he would be required to start only at Kingsgrove". The doctor referred to in that finding is Dr Abeya. In my view, this finding is plainly a finding of fact or a conclusion in the nature of an opinion, which was reasonably open to be made on the evidence. 27 The respondent's second reason or "excuse", as identified by the AAT at [42], was that the respondent said that his treating general practitioner, Dr Nigro, had certified that he was not fit to start work before 23 March 2012 and that he was then told after consulting Dr Nigro on 20 March 2012 that he was only fit to work at "the closest Aust Post position to home". As noted above, Dr Nigro issued the respondent with a revised medical certificate, also dated 20 March 2012, which, in contrast with the earlier medical certificate he had issued that day, stated that the respondent was unfit for all work from 23 March 2012 to 23 April 2012. The AAT noted that Dr Nigro had been cross-examined about the date of the consultation on the second certificate but that it had not been put to Dr Nigro directly that he had completed the second medical certificate several days later and falsified the date. Significantly, the AAT stated in [43] that it did not find that the date was false. Although the AAT found in [42] that this second medical certificate was issued by Dr Nigro at the respondent's urging, it added that this did not "nullify the fact that the applicant was entitled to rely upon medical opinion that he should not comply… that compliance could be counter-productive or that he was unfit to comply". The AAT also noted that Dr Nigro had given oral evidence before it which supported that view. Again, these findings are, in my view, plainly findings of fact or conclusions in the nature of an opinion which were reasonably open to be made on the evidence. 28 In [44] of its reasons for decision, the AAT purported to identify a third reason or "excuse" relied upon by the respondent. In brief, it related to the appellant's suggestion that the respondent's request and insistence to start at Kingsgrove was based only on his personal convenience. The AAT accepted the respondent's evidence that it was not simply convenience or proximity that made the respondent decline to work at the Waterloo Mail Centre. The AAT stated in [46] that it did not believe that mere convenience was the sole or dominant reason for the respondent's non-compliance. The AAT added: I do not believe the [appellant] took seriously the [respondent's] expressed feelings of fear and intimidation. 29 I do not consider that this issue relating to the respondent's convenience constitutes an "excuse" for the purposes of s 37(7). Rather, I consider that the AAT was dealing with, and rejecting, a submission by the appellant that the true foundation for the respondent's attitude was his own personal convenience. This is a matter which went to the respondent's credit in relation to what can properly be described as the two excuses advanced by him for the purposes of s 37(7), which are identified above. In any event, I consider that the AAT's findings on these matters are findings of fact or opinion which were reasonably open to be made on the evidence. 30 The fourth reason or "excuse" as dealt with in [47] of the AAT's reasons also fits into a different category and I do not consider that it is correctly characterised as an "excuse" for the purposes of s 37(7). The AAT there addressed the appellant's claim that, in any event, it could not have employed the respondent at Kingsgrove in March 2012 because there were no vacant positions there. Self-evidently this is not an excuse which was advanced by the respondent within the meaning of s 37(7). Rather, the issue is one which was raised by the appellant as relevant to the facts of the overall matter. Necessarily, therefore, the AAT's findings on this matter are also findings of fact or opinion which were reasonably open to be made on the evidence. 31 In [49] of its reasons for decision, the AAT expressed the following general findings (the appellant in the appeal is referred to in the following extracts as "the respondent"): I have no doubt that the applicant presented a formidable difficulty in arranging a return to full work. Equally, I accept that he had an honest and reasonable belief that a position could be obtained for him at Kingsgrove, on at least a short-term basis to assist him in returning to work. I believe that he understood that the respondent's psychiatrist had recommended if not undertook that he should be re-introduced to work at Kingsgrove. I accept that he believed his local treating doctor supported a start at Kingsgrove only and, if the doctor signified differently to Australia Post initially, I think his reversal was genuine when he realised that the return planned was not to Kingsgrove. 32 This then provided the basis for the AAT's stated conclusions in [50] and [51]: I find, on the balance of probabilities, that the applicant genuinely intended to return to work, that he believed that his local doctor and the psychiatrist felt that this return should start at Kingsgrove, and that he himself strongly (rightly or wrongly) believed that he would not be able to return to work except in a Kingsgrove environment. Further, I find that Drs Nigro and Abeya did believe, and convey to the applicant, their view that the return to work should be at Kingsgrove and not elsewhere. In the particular circumstances of this case, I find that the applicant's refusal and failure to attend Waterloo Mail Centre on 21 March 2012, as required by the Rehabilitation Program of 19 March 2012, was not without reasonable excuse. The reviewable decision dated 22 May 2012 is set aside and substituted with a decision that the Applicant did not fail or refuse to undertake the Program without reasonable excuse. The payment of benefits and expenses suspended as a result of the reviewable decision should be made from the date upon which they were suspended. The matter is remitted to the respondent for re-institution of payments and calculation of monies owed. Assessment and determination of the appeal 33 Section 37(1) of the Act entitled a rehabilitation authority to make a determination that an employee who has suffered an injury resulting in incapacity for work or an impairment undertake a rehabilitation program. 34 At the time of the AAT's decision, s 37 relevantly provided: 37. Provision of rehabilitation programs (1) A rehabilitation authority may make a determination that an employee who has suffered an injury resulting in an incapacity for work or an impairment should undertake a rehabilitation program. (2) If a rehabilitation authority makes a determination under subsection (1), the authority may: (a) provide a rehabilitation program for the employee itself; or (b) make arrangements with an approved program provider for that provider to provide a rehabilitation program for the employee. Note: … … (3) In making a determination under subsection (1), a rehabilitation authority shall have regard to: (a) any written assessment given under subsection 36(8); (b) any reduction in the future liability to pay compensation if the program is undertaken; (c) the cost of the program; (d) any improvement in the employee's opportunity to be employed after completing the program; (e) the likely psychological effect on the employee of not providing the program; (f) the employee's attitude to the program; (g) the relative merits of any alternative and appropriate rehabilitation program; and (h) any other relevant matter. … (5) Where an employee is undertaking a rehabilitation program under this section, compensation is not payable to the employee under section 19 or 31 but: (a) if the employee is undertaking a full-time program – compensation is payable to the person of an amount per week equal to the amount per week of the compensation that would, but for this subsection, have been payable under section 19 if the incapacity referred to in that section had continued throughout the period of the program; or (b) if the employee is undertaking a part-time program – compensation is payable to the employee of such amount per week as the relevant authority determines, being an amount not less than the amount per week of the compensation that, but for this subsection, would have been payable to the employee under this Act and not greater than the amount per week of the compensation that would have been payable under paragraph (a) if the employee had been undertaking a full-time program. (7) Where an employee refuses or fails, without reasonable excuse, to undertake a rehabilitation program provided for the employee under this section, the employee's rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the employee begins to undertake the program. (7A) However, subsection (7) does not operate to suspend the employee's right to compensation for the cost of medical treatment that is payable under section 16. (8) Where an employee's right to compensation is suspended under subsection (7), compensation is not payable in respect of the period of the suspension. 35 As the Full Court noted in Australian Postal Corporation v Sinnaiah (2013) 213 FCR 449 at [13], s 37 appears in Pt III, Div 3 of the Act. Section 36 enabled the relevant rehabilitation authority to arrange for the assessment of an employee's capacity to undertake a rehabilitation program. Section 36(4) is a parallel provision to s 37(7). Section 36 relevantly provided: 36. Assessment of capability of undertaking rehabilitation program (1) Where an employee suffers an injury resulting in an incapacity for work or an impairment, the rehabilitation authority may at any time, and shall on the written request of the employee, arrange for the assessment of the employee's capability of undertaking a rehabilitation program. (2) An assessment shall be made by … (3) The rehabilitation authority may require the employee to undergo an examination by the person or panel of persons making the assessment. (4) Where an employee refuses or fails, without reasonable excuse, to undergo an examination in accordance with a requirement, or in any way obstructs such an examination, the employee's rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the examination takes place. (4A) However, subsection (4) does not operate to suspend the employee's right to compensation for the cost of medical treatment that is payable under section 16. … (7) Where an employee's right to compensation is suspended under subsection (4), compensation is not payable in respect of the period of the suspension. … 36 Section 38 of the Act dealt with the review of certain determinations made by a rehabilitation authority under either s 36 or s 37. It provided: 38. Review of certain determinations by Comcare (1) As soon as practicable after a rehabilitation authority (other than a relevant authority) makes a determination under section 36 or 37, the authority shall cause to be served on the employee to whom the determination relates a notice in writing setting out: (a) the terms of the determination; (b) the reasons for the determination; and (c) a statement to the effect that the employee may, if dissatisfied with the determination, request Comcare for a review of the determination under this section. (2) An employee in respect of whom a determination under section 36 or 37 is made by a rehabilitation authority (other than a relevant authority) may, by notice in writing given to Comcare, request Comcare to review the determination. (3) A request shall: (a) set out the reasons for the request; and (b) be given to Comcare within 30 days after the day on which the determination first came to the notice of the employee, or within such further period (if any) as Comcare, either before or after the expiration of that period, allows. (4) On receipt of a request, Comcare shall review the determination and may make a decision affirming or revoking the determination or varying the determination in such manner as Comcare thinks fit. 37 The appellant's primary argument is that the AAT misdirected itself because it considered whether the subject rehabilitation program itself was appropriate. The appellant contends that the AAT was not entitled to ask that question. In support of that contention, reliance was placed by the appellant on the Court's decision at first instance (Whitlam J) in Australian Postal Corporation v Pascoe [2003] FCA 390 and, on appeal, in Pascoe v Australian Postal Corporation [2004] FCAFC 4. It also relied on Jagot J's judgment in Comcare v Singh [2012] FCA 136. I will deal with each of those decisions in turn. (i) The Pascoe litigation 38 In Pascoe, another Australia Post employee suffered a work-related back injury for which Australia Post accepted liability. A determination was made under s 37(1) of the Act that Mr Pascoe should undertake a rehabilitation program (for various reasons which are not relevant here, the program was varied several times). A determination was ultimately made which required Mr Pascoe to commence the varied rehabilitation program on 3 June 1999, but he failed to undertake that program. Nor had he requested a reconsideration under s 38 of the determination which required him to undertake the program. 39 Whitlam J identified the threshold issue posed by s 37(7) as whether Mr Pascoe had a reasonable excuse for failing to undertake the program. The AAT had concluded that Mr Pascoe did have a "reasonable excuse". In explaining that conclusion, it addressed seriatim the various matters spelt out in s 37(3)(a)-(g) of the Act, including parts of the medical evidence which, the Tribunal found, tended to suggest that "the full likely effects on Mr Pascoe from requiring him to do mail sorting indoors at the Letter Facility was not a matter given consideration by [the decision-maker]". 40 Whitlam J described s 37(7) as "a draconian provision" (at [18]), which I presume is a reference to the fact that it operates to suspend an employee's rights to compensation unless there is a "reasonable excuse". 41 His Honour summarised Australia Post's submissions, which were to the effect that s 37(7) did not suggest that a reasonable excuse could relate to the content of a rehabilitation program itself. In particular, it submitted that it could not be a reasonable excuse to refuse or fail to undertake a program merely because the employee did not agree with some aspects of it or did not want to do the work. Australia Post submitted that the purpose of s 37(7) was "to permit a supervening physical or legal incapacity to be such an excuse", such as "a transport strike or an unforeseen physical or mental breakdown" which prevented the employee from commencing a program (see [16]). Australia Post submitted that Mr Pascoe's attitude could not supply a reasonable excuse in the statutory context and that the Tribunal had erred because it did not address the issues of Mr Pascoe's actual physical and mental capability. 42 In upholding the appeal, Whitlam J substantially adopted Australia Post's submissions. His Honour said at [18]: It is true that the Tribunal referred to the evidence of other medical practitioners besides Dr Samad. In my opinion, however, the use made of Dr Samad's stale opinion demonstrates that the Tribunal completely misunderstood the ambit and meaning of s 37(7). That provision suspends an employee's rights to compensation unless there is a "reasonable excuse". It is a draconian provision. Section 37(3) sets out the fundamental elements to be taken into account in making a determination that an employee should undertake a rehabilitation program, and once a determination is made the employee will have the rights of reconsideration and review provided for in Pt VI of the Act. The second half of s 37(1) authorizes the rehabilitation authority to make arrangements for the provision of the program. Objection may be taken to those arrangements if they do not accord with the terms of the determination, but dissatisfaction with such terms cannot furnish a reasonable excuse for a refusal or failure to undertake the program. In broad terms I accept the submissions on behalf of Australia Post. I am reluctant to speculate about what might constitute reasonable excuses. They are, in my view, most likely to concern things that occur, or at least come to attention, after the making of the relevant determination. To that extent counsel for Mr Pascoe may be correct in submitting that the factors set out in s 37(3) are not necessarily excluded, but it is much more likely that an excuse must relate to the employee's ability to undertake the program. (Emphasis added). 43 I will return to deal with the significance of the words in emphasis (and also with the highlighted words in [45] below). It might also be noted that s 37 of the Act was in different terms when Pascoe was decided. At that time it provided: 37(1) A rehabilitation authority may make a determination that an employee who has suffered an injury resulting in an incapacity for work or an impairment should undertake a rehabilitation program and, where the authority so determines, it may make arrangements with an approved program provider for the provision of a rehabilitation program for the employee. Section 37(1) was subsequently amended and effectively split in two, with the second half of the provision becoming s 37(2) of the Act as it stood for the purposes of the proceedings here before the AAT. 44 Whitlam J held that the Tribunal's approach to the issue of "reasonable excuse" in s 37(7) was "fundamentally flawed" (see [20]). His Honour said that the issue is not whether a determination should be made under s 37(1). His Honour found that the Tribunal had used the provisions of s 37(3) as a checklist for a purpose for which they were not intended. He said: Its gaze should have been fixed firmly on the object of s 37(7), which had effect only where a determination was in force and a program provided. 45 An appeal against Whitlam J's decision in Pascoe was dismissed. The Full Court observed in [14] that the appropriate way to challenge a particular program was to seek a reconsideration under s 38(2), which assessment could involve the factors set out in s 37(3). It added, however, at [14]: … Unless the employee has sought a reconsideration, when considering whether an employee has a reasonable excuse for failing to undertake a rehabilitation program, the program in question is to be taken to be appropriate for the employee. It is no part of the s 37(7) exercise to gainsay the program made by an approved program provider following a s 37(1) determination. Consequently the factors set out in s 37(3) of the Act are relevant only to a decision made under s 37(1), as suggested by the opening words of s 37(3). As noted by the primary judge, although the s 37(3) factors are not necessarily irrelevant to a decision to be made under s 37(7), they do not inform that decision. (Emphasis added). 46 At [15], the Full Court held that, although the Tribunal had expressed its findings in terms of "reasonable excuse", the Tribunal: did not actually pose for itself the question whether Mr Pascoe had an excuse for his failure to undertake the rehabilitation program, the subject of the determination by Australia Post on 25 May 1999, or whether that excuse was reasonable. Rather, it considered whether the program was an appropriate one for Mr Pascoe. 47 At [16], the Full Court referred to [35] of the Tribunal's reasons, which set out various matters which the Tribunal said helped explain Mr Pascoe's failure or refusal to engage in the rehabilitation program. They included his request that he be placed in a position which was suited to his physical restrictions and training background, his preference for working outdoors, and evidence from a Dr Hollo to the effect that Mr Pascoe could not cope with the idea of working indoors. The Full Court observed at [17] that these issues or reasons identified by the Tribunal were "reasons why the program may not be suitable for Mr Pascoe, but they do not bear on the question of whether he had a reasonable excuse for failing to attend to undertake the program" (at [17]). 48 In [18], the Full Court referred to Kiefel J's decision in Telstra Corporation v Administrative Appeals Tribunal [2003] FCA 102, in which her Honour concluded that, generally speaking, s 57(2) (which was a similar provision to s 37(7)) "requires a reason personal to the employee" and not an excuse which is provided by the Tribunal's opinion as to the need for the examination. In Pascoe, the Full Court reinforced this point by reiterating in [19] that s 37(7) requires an excuse "personal to the employee" and not an opinion by the AAT as to the appropriateness of the particular program. 49 And in [20] in Pascoe, the Full Court reaffirmed what the Full Court had said in an earlier decision (Australian Postal Corporation v Forgie (2003) 202 ALR 63 at [40]), that the s 37(7) process "… requires that the person at least consider the circumstances surrounding the employee's failure or refusal to undertake a rehabilitation program and to evaluate what is reasonable in the circumstances". 50 The Full Court in Pascoe found that the Tribunal had effectively concluded that Mr Pascoe ought to be excused from undertaking the rehabilitation program, rather than asking itself the correct question, namely whether he had a reasonable excuse for non-attendance. 51 At [21], the Full Court further found that the Tribunal had not evaluated the reasonableness of any excuse presented to explain Mr Pascoe's failure to undertake the program devised for him, but rather "it focused on the reasonableness of the program itself", which was not its role. The Full Court said at [21]: The AAT should have taken the program as having been provided to the employee without challenge following a determination, and assessed the reasonableness of Mr Pascoe's excuse, if he had one, for failing to undertake that particular program. (Emphasis added). 52 For the following reasons, I consider that the appellant has misunderstood the principles established in both Pascoe decisions. Furthermore, I do not consider that those relevant principles were misapplied by the AAT, nor did it direct itself to the wrong question. 53 The appellant regards the Pascoe cases as requiring a sharp distinction to be drawn between an assessment of the reasonableness of an employee's excuse for refusing or failing to undertake a rehabilitation program for the purposes of s 37(7) and a review under s 38 of a determination that the employee should undertake a particular rehabilitation program. The appellant submitted that if an employee did not avail himself or herself of the opportunity to challenge a determination requiring him or her to undertake a rehabilitation program (as is the case here), the appropriateness or suitability of the rehabilitation program had to be accepted if such an employee seeks to rely upon s 37(7). Such was the sharpness of the distinction, so the appellant submits, that it is impermissible in a s 37(7) review to regard any excuse as a reasonable excuse for the purpose of that provision if the excuse relates in any way to the content of the program itself. In support of that submission, the appellant placed particular reliance upon Whitlam J's statement in [18] of his reasons for judgment, as set out in [42] above. 54 The following points should be made in respect of the appellant's submission. 55 First, Whitlam J's reasons need to be read as a whole. There is a danger in reading in isolation and without taking into account the balance of his Honour's reasons his statement that "dissatisfaction with such terms cannot furnish a reasonable excuse for a refusal or failure to undertake the program". It is significant, for example, that that statement in [18] is followed almost immediately in the same paragraph by his Honour recording that he was reluctant to speculate about what might constitute reasonable excuses. His Honour was plainly aware of the danger of being overly prescriptive in defining what may give rise to a reasonable excuse for the purposes of s 37(7). 56 I respectfully agree with Whitlam J that there is a need for caution in this respect, having regard to the inherently flexible notion of the relevant statutory phrase. A review of whether or not a particular excuse is a reasonable excuse for the purposes of that provision will necessarily be fact specific. 57 His Honour also added in [18] that reasonable excuses were "most likely to concern things that occur, or at least come to attention, after the making of the relevant determination". Furthermore, and significantly, his Honour added also at [18] that "to that extent, it might be correct to say that the factors set out in s 37(3) are not necessarily excluded, but it is much more likely that an excuse must relate to the employee's ability to undertake the program". In my view, these remarks were intended to provide general guidance and not fix absolute and inflexible rules. 58 Secondly, in my view, when [18] is read as a whole, it does not support the appellant's submission that the contents of the rehabilitation program are totally irrelevant to the task under s 37(7) of determining whether an employee is "without reasonable excuse" in refusing or failing to undertake such a program. Indeed, his Honour expressly acknowledged the force of the argument that the factors as set out in s 37(3) are not necessarily excluded from that exercise. Those factors are primarily relevant to the making of a determination under s 37(1) that an employee undertake a rehabilitation program. But, in particular circumstances, they may also be relevant to the question which arises under s 37(7), which reflects the inherent flexibility in the notion of a "reasonable excuse" and the need to take into account all relevant facts and circumstances in relation to that issue. 59 Thirdly, in dismissing the appeal from Whitlam J's decision, the Full Court in Pascoe effectively approved his Honour's approach, albeit that the Full Court used different language. The Full Court made clear that it is no part of the s 37(7) exercise to "gainsay" the program made by an approved program provider following a s 37(1) determination and that the factors set out in s 37(3) are relevant only to a decision made under s 37(1) which, as their Honours noted, is suggested by the opening words of s 37(3). But the Full Court then noted, seemingly with approval, Whitlam J's observation that "although the s 37(3) factors are not necessarily irrelevant to a decision to be made under s 37(7), they do not inform that decision" (at [14]). The Full Court's observations in these passages necessarily reflect the facts underlying the appeal. An important matter, which lies at the heart of the decisions of both Whitlam J and the Full Court that the AAT had fallen into error on a question of law, was that the AAT, instead of focusing on the employee's stated excuses for refusing to undertake the rehabilitation program, focused itself on the reasonableness of that program (see [21] of the Full Court's reasons for judgment in Pascoe). In my view, the AAT here did not fall into that error. Rather, as required by s 37(7) and relevant caselaw, the AAT correctly focused its attention on the reasonableness of the excuses advanced by the respondent. 60 Fourthly, it is evident from the terms of the AAT's reasons for decision here (and in particular at [14]) that the AAT was mindful of the Full Court's decision in Pascoe in defining the relevant legal task under s 37(7), when it said: In Australian Postal Corporation v Pascoe [2005] FCA 289 (sic) the Federal Court held that the Tribunal had erred in considering whether the program was reasonable rather than an excuse. It held that the subsection required an excuse "personal to the employee". Unless the employee has sought reconsideration under s 38, the program is taken to be appropriate for the employee. Section 38 provides that an employee may request Comcare to review the program and to affirm, revoke or vary it. 61 (It should be noted that the AAT's citation of Pascoe is incorrect. The citation given is actually to another decision titled Australian Postal Corporation v Pascoe, which is a decision of Madgwick J. The issue there, which arose on a judicial review, was whether the AAT had erred in holding that s 37(7) of the Act no longer had any application because the contract of employment of the particular employee the applicant's ceased to exist, with the consequence that the employee could not be required to attend for work and there was no room left for s 37(7) to operate. Madgwick J was not called upon in that case to review the reasonableness of the employee's excuse for failing to undertake a rehabilitation program. In the light of the definition in s 5(9) of "an employee", their argument which was advanced regarding the unavailability of s 37(7) was rejected. Given the issue which arose in that proceeding, it is not surprising that Madgwick J's reasons for judgment contain no reference to s 37(7) requiring "an excuse 'personal to the employee'". However, that expression does appear in the Full Court's decision in Pascoe at [19], which strongly indicates that it is this decision which the AAT had in mind when it gave an erroneous citation of Pascoe.) (ii) The Singh decision 62 In Singh, Comcare appealed under s 44 of the AAT Act against a decision of the AAT and raised the following three questions: (a) whether on a proper construction of s 37(7) of the Act, the AAT was precluded from making a finding that the employee did not have a reasonable excuse for not continuing with a return to work plan, because the employee developed an anxiety state and his treating psychiatrist certified as to his unfitness for work; (b) whether the facts fully found by the AAT fell within the provisions of s 37(7), properly construed; and (c) whether the AAT complied with its duty to provide reasons as required by s 43(2B) of the AAT Act. 63 Justice Jagot held that the third question should be answered "no". In [26] of her Honour's reasons for judgment she indicated that the first question should be answered "no". Accordingly, she held that the AAT was not precluded from making a finding that the employee did not have a reasonable excuse for not continuing with a rehabilitation program because he had developed an anxiety state and his treating psychiatrist had certified him to be unfit for work. Although her Honour observed that first question did not strictly arise because of her answer to the third question, her observations concerning the first question are significant because they are plainly inconsistent with the appellant's case here. As is evident from [25] of Jagot J's reasons for judgment, her Honour clearly considered that, in determining whether or not the employee acted without reasonable excuse, the AAT was entitled to take into account evidence that the employee had developed an anxiety state after he had returned to work in accordance with the rehabilitation program and that his doctor had then provided him with a certificate stating that he was totally incapacitated for work. 64 That is the approach which the AAT also took here. It reveals no error on a question of law. 65 The appellant also relied on [27] of Jagot J's reasons, where her Honour said: It is also convenient to observe here that I should not be taken as accepting the propositions put for Mr Singh that the phrase "without reasonable excuse", in the context of s 37(7), requires nothing more than an excuse which has some rational foundation, as opposed to one which is irrational, considered from the perspective of the employee. No authority was cited for this approach. It is not supported by the concept that the reason must be "personal to the employee", discussed in Telstra Corp Ltd v Administrative Appeals Tribunal (2003) 37 AAR 40; [2003] FCA 102 at [11] and Pascoe v Australian Postal Corporation (2004) 77 ALD 464; [2007] FCAFC 4 at [18]-[21], the latter of which also emphasises the need for the AAT to "evaluate the reasonableness of any excuse presented …" (at [21]). On first consideration, the submission put for Mr Singh would seem to give no work to the qualification of "reasonable" which generally involves an element of objectivity, even if applied in the circumstances as known to the employee at the time. It cannot be, however, that the subjective state of mind of the employee is the sole dictate of what is a reasonable excuse provided that there is some rational foundation for the employee's state of mind. As I did not hear argument on this issue it is inappropriate to say more. 66 I do not consider that that passage assists the appellant's argument. Indeed, I consider that it is inconsistent with it. Her Honour agreed with Kiefel J's observations in Telstra Corporation that a reason or excuse for the purposes of s 37(7) must be "personal to the employee" and that, as the Full Court also held in Pascoe, the AAT's task is to "evaluate the reasonableness of any excuse presented". I consider that that is the approach which the AAT applied here in evaluating (and accepting) the two excuses given by the respondent for refusing to undertake the rehabilitation program. 67 Furthermore, to the extent that the appellant submitted that the AAT here had acted inconsistently with the penultimate sentence of that passage from Jagot J's judgment, I disagree. It is clear from the terms of the AAT's reasons for decision here that it did not view the respondent's state of mind as the "sole dictate" of what is a reasonable excuse. On the contrary, as is evident from the analysis above, the AAT's conclusion that the respondent had a reasonable excuse was based on an objective evaluation of the reasons advanced by the respondent, which included an acceptance of the reasonableness of the respondent's position regarding Dr Abeya's advice, as well as the revised medical certificate provided by Dr Nigro, neither of which matters merely involves an acceptance of the respondent's "subjective state of mind". The AAT correctly approached those matters as requiring an objective assessment of the respondent's excuses for not participating in the rehabilitation program. 68 For these reasons, I reject the appellant's primary contention that the AAT misdirected itself in law. I consider that the AAT properly focused its attention on the reasonableness of the respondent's excuses. The AAT appreciated that it was not its task to assess whether or not the rehabilitation program was reasonable and it did not do so. The question before the AAT was correctly recognised by it as being whether the respondent was without a reasonable excuse in the context of his psychological injury. It found as a matter of fact that the respondent did have a reasonable excuse. It was plainly open to the Tribunal to come to that conclusion, having regard to the evidence before it and the findings it made which fell within s 37(7), properly construed. The appellant has not established any error on a question of law. The appeal should be dismissed and the appellant ordered to pay the respondent's costs. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths. Associate: Dated: 10 October 2014