FEDERAL COURT OF AUSTRALIA Military Rehabilitation and Compensation Commission v Katterns [2017] FCA 641 File number: QUD 35 of 2017 Judge: LOGAN J Date of judgment: 7 June 2017 Catchwords: STATUTES – interpretation – amending acts – test to be applied under s 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) – whether accrued right for application to be determined applying statutory test applicable prior to amendments of Act ADMINISTRATIVE LAW – appeal from Administrative Appeals Tribunal – where Tribunal decision set aside Military Rehabilitation and Compensation Commission decision to deny applicant compensation under s 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) – whether were was evidence before the Tribunal capable of supporting finding of fact – where parties led neither medical evidence nor other evidence to support the kind of intuitive reasoning outlined in EMI (Australia) Ltd v Bes (1970) 2 NSWR 238 – whether the AAT failed to comply with the obligations to give reasons for its decision, in s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) – whether procedural unfairness to Commission – matter remitted to Tribunal WORKERS' COMPENSATION – claim for compensation for an injury – former member of Defence Force – disease suffered by an employee – osteoarthritis of the right hip – pre-exciting compensable injury – whether condition aggravated by the reserve military service of the applicant Legislation: Administrative Appeals Tribunal Act 1975 (Cth) ss 2, 2A, 7, 33, 37, 39, 43, 44 Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 5A, 5B, 14, 147 Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2007 (Cth) s 2 Veterans' Entitlement Act 1986 (Cth) Cases cited: Auckland Harbour Board v The King [1924] AC 318 Canute v Comcare (2006) 226 CLR 535 Commonwealth v Beattie (1981) 53 FLR 191 EMI (Australia) Ltd v Bes [1970] 2 NSWR 238 Esber v Commonwealth of Australia (1992) 174 CLR 430 Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626 Formosa v Secretary, Department of Social Security (1988) 46 FCR 117 Kioa v West (1985) 159 CLR 550 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Rana v Repatriation Commission (2011) 196 FCR 137 Roberts v Repatriation Commission (1992) 39 FCR 420 Robertson v Minister for Pensions [1949] 1 KB 227 Sullivan v Civil Aviation Safety Authority (2014) 226 FCR 555 Tippett v Australian Postal Corporation (1998) 27 AAR 40 Date of hearing: 16 May 2017 Registry: Queensland Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 70 Counsel for the Applicant: Mr Hack QC with Ms Slack Solicitor for the Applicant: Sparke Helmore Counsel for the Respondent: The respondent appeared in person (written submissions prepared pro-bono by Mr J Carter) ORDERS QUD 35 of 2017 BETWEEN: MILITARY REHABILITATION AND COMPENSATION COMMISSION Applicant AND: GREGORY KATTERNS Respondent JUDGE: LOGAN J DATE OF ORDER: 7 JUNE 2017 THE COURT ORDERS THAT: 1. The decision of the Administrative Appeals Tribunal dated 22 December 2016 be set aside. 2. The matter be remitted to that Tribunal for hearing and determination according to law. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT LOGAN J: 1 Mr Gregory Katterns once held commissioned rank as a General Service Officer in in the Active Army Reserve. He undertook most of his duty as a member of the Royal Australian Engineers. One sequel to Mr Katterns' military service is that, for the purposes of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act), the Military Rehabilitation and Compensation Commission (Commission) has accepted that, for the purposes of that Act, he suffers from an "injury", as defined, for which it is liable under s 14 to pay compensation to him. The accepted, compensable injury is an aggravation of bilateral knee osteoarthritis. Liability in respect of that injury was accepted in 2006. 2 Since then, Mr Katterns has also claimed compensation under the SRC Act in respect of osteoarthritis in both hips. The claim has come to focus on his right hip. This claim was not accepted by the Commission either upon initial consideration or upon internal review. That the Commission, rather than Comcare, was the public authority charged with the making of a decision in respect of Mr Katterns' initial claim and this further claim is because each is "defence related" and, by s 147 of the SRC Act, within the administrative remit of the Commission, not Comcare. 3 Mr Katterns then sought an independent review on the merits of his claim by the Administrative Appeals Tribunal (Tribunal). For the purposes of that review, the Tribunal was constituted by one of its non-judicial officer Deputy Presidents. 4 The Deputy President conducted a hearing on 28 June 2016. On 22 December 2016, the Tribunal decided to set aside the Commission's decision as affirmed on internal review. In lieu thereof, the Tribunal decided that compensation was payable to Mr Katterns in respect of osteoarthritis of the right hip that was aggravated by his reserve military service. The Commission has challenged that decision on a number of questions of law by way of the statutory appeal for which s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) makes provision. 5 On the hearing of the appeal, the Commission was represented by Mr Hack QC and Ms Slack of Counsel. I am indebted to them for their careful and concise submissions. Mr Katterns appeared on his own behalf but he did have the benefit of, and relied upon, written submissions, which I understand were prepared pro bono, by Mr J Carter of Counsel. I commend Mr Carter for the assistance that he has thereby rendered not just to Mr Katterns personally but also to the administration of justice. 6 As Mr Hack frankly acknowledged, the threshold question of law raised in the appeal is whether, in the particular circumstances of the proceedings before the Tribunal, the Commission was denied procedural fairness? There are other questions posed but, if this threshold question is, as the Commission contends it should be, answered in the affirmative, the inevitable result is that the case will have to be remitted to the Tribunal to be heard again. That is because this is not a case in which it would be appropriate for the Court, acting under s 44(7) of the AAT Act, to make any finding of fact to resolve the compensation controversy. 7 Mr Katterns also appeared on his own behalf before the Tribunal at the hearing on 28 June 2016. On that occasion, the Commission was represented by a solicitor, Mr Hawker, of the firm Sparke Helmore. 8 On the hearing of the appeal, I was taken in some detail through the transcript of the hearing on 28 June 2016. It is evident from this that the hearing was conducted by the learned Deputy President with quite a degree of informality. That looks very much to me to be the result both of an assessment by the Deputy President as to how best to put Mr Katterns at ease, so that he might best take up the opportunity offered by the hearing to present his case and the way in which Mr Hawker considered how he might best assist the Tribunal, having regard to the obligation which fell on the Commission by virtue of s 33(1AA) of the AAT Act. A notable feature of the former was that, in some of the interchanges which he had with Mr Katterns, the Deputy President made reference to some of his own experiences when undertaking military duty in the Army Reserve. 9 The Deputy President is not adversely to be criticised for the value judgement which he made as to how best to conduct the hearing. By s 33(1) of the AAT Act, it is provided: 33 Procedure of Tribunal (1) In a proceeding before the Tribunal: (a) the procedure of the Tribunal is, subject to this Act and the regulations and to any other enactment, within the discretion of the Tribunal; (b) the proceeding shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and a proper consideration of the matters before the Tribunal permit; and (c) the Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate. 10 In Rana v Repatriation Commission (2011) 196 FCR 137 at [22] (Rana), which concerned a claim which came before the Tribunal under the Veterans' Entitlements Act 1986 (Cth) (the "VEA" to which reference is made in the passage quoted), the Full Court took the following propositions to be well settled: 22 Subject to modifications and conditions which it is unnecessary to detail, the VEA makes provision for the review by the Tribunal of this type of pension decision in accordance with the AAT Act. For that purpose the Tribunal is empowered to exercise all of the powers and discretions vested by statute in the person who made the decision under review: s 43(1) AAT Act. Its task is to review the administrative decision concerned on the merits and to reach for itself the correct or preferable decision: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 419 per Bowen CJ and Deane J (Drake). How the Tribunal goes about undertaking that task is, subject to any particular requirement flowing either from the AAT Act or any other relevant enactment (and neither introduces any relevant particular requirement in this case), a matter within the discretion of the Tribunal: s 33(1)(a) AAT Act. As Bowen CJ and Deane J observe in Drake, the AAT Act "offers little general guidance on the criteria and rules which the Tribunal is to apply in the performance of its task of reviewing administrative decisions which are subjected to its surveillance". However the Tribunal chooses, as a matter of discretion, to undertake its review task it must do so in a procedurally fair way: Drake. This statement is, substituting the SRC Act for the reference to the VEA, just as applicable in the present case. 11 Certainly, the disclosure by a Tribunal member of a background which has something in common with that of an applicant can carry with it a potential risk of engendering a perception on the part of both that applicant and perhaps also a respondent of sympathy for the merits of an applicant's claim. If anything, the position can be even more fraught where the shared experience is with a respondent decision-maker or that person's representative, especially if an applicant is not legally represented. If made at all, such disclosures must always be carefully made and explained so as to avoid that risk. 12 Equally though, not to disclose such a background might itself give rise to unfairness, especially if experience drawn from that background might play a role in factual evaluations. It can also assist in achieving the objectives set out in s 2A of the AAT Act. It is to be remembered that, in respect of Deputy Presidents, Senior Members and Members of the Tribunal, a basis for appointment, either in its own right or in addition to enrolment as a legal practitioner for the prescribed time, is a candidate's possession, in the opinion of the Governor-General, of special knowledge or skills relevant to the duties of such an office: s 7(2)(c) and s 7(3)(b), AAT Act. The appointment of members having such skills has long been a feature and one of the strengths of the Tribunal. This particular Deputy President not only meets the requisite legal professional appointment criterion but also brings to his office the benefit of lengthy service in the Army Reserve. 13 Having observed Mr Katterns in the course of both pre-hearing case management and on the hearing of the appeal, I can well see why the learned Deputy President made the value judgement which the transcript so obviously reveals he did as to the manner in which best to conduct the hearing. That Mr Katterns undertook some arduous duty in the course of his military duty was not controversial. That is the lot at times of a sapper, even in peacetime training. He has a sense of grievance in respect of the rejection of his claim. He is not unintelligent but his formal qualifications are not in the Law and he is not by civilian calling or military experience an advocate. These are not adverse criticisms, just facts. One benefit which, by s 33(1) of the AAT Act, Parliament intended to confer upon those who invoke the Tribunal's jurisdiction is that the Tribunal may adapt its procedures to the needs of the particular case. When combined with the ethos of rigorous independence from the maker of the decision under review demanded by s 43 of the AAT Act and a Tribunal member's oath or affirmation of office, this procedural adaptation can do much to engender public confidence in Federal public administration and offer guidance by reasoned decisions to enhance the future quality of that administration. 14 The overarching requirement is that the decision made by the Tribunal must be the result of a fair process, of compliance with the rules of natural justice. As to these rules, in Kioa v West (1985) 159 CLR 550 at 582, in a passage much since cited with approval, Mason J (as his Honour then was) observed: It is a fundamental rule of the common law doctrine of natural justice expressed in traditional terms that, generally speaking, when an order is to be made which will deprive a person of some right or interest or the legitimate expectation of a benefit, he is entitled to know the case sought to be made against him and to be given an opportunity of replying to it … It is not only deprivation of some right or interest or the legitimate expectation of a benefit which may give rise to a person's entitlement to know the case sought to be made against that person and to be given an opportunity of replying to it. At common law, that entitlement may also arise in circumstances where an obligation is to be visited upon a person. Subject to statutory exceptions which are not presently relevant, this common law understanding of this fundamental rule of natural justice informs the content of the statutory obligation found in s 39 (1) of the AAT Act that, "the Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case". 15 One end to which the requirement found in the Tribunal's General Practice Direction for the lodging by a party of a statement of issues, facts and contentions is to ensure that the other party (or parties) know before a hearing the case which that party proposes to advance. Related to that is another end, via an exchange of such statements, of narrowing the issues of fact and law which fall for resolution by the Tribunal. 16 Resolution of the denial of procedural fairness question raised by the Commission depends upon reading the transcript of the hearing in the context of the statement of issues, facts and contentions lodged by it and of the post-hearing written submissions, made by leave to the Tribunal, both by Mr Katterns and by the Commission. 17 In the Commission's statement of issues, facts and contentions, it identified the issues for determination in this way: Whether the respondent is liable to pay compensation to the Applicant for the claimed condition under s 14 of the Act. In particular: (a) What is the date of onset of the claimed condition; and (b) Whether the applicant's military service contributed to the claimed condition to a material/significant degree (depending upon the date of onset being prior to or post 13 April 2007). In particular, the relationship, if any, between the applicant's accepted conditions of 'aggravation of bilateral knee osteoarthritis' and the claimed condition. [Emphasis added] 18 At the hearing (p 4, line 10), when initially identifying to the Deputy President the issue for decision as he understood it, Mr Hawker put it more narrowly than as identified in the Commission's statement of issues, facts and contentions: MR HAWKER: But I've spoken with Mr Katterns this morning about the prospect of- well, two things. Firstly, clarifying what the claim actually is, what he's asking the tribunal to decide on. And I understand that the claim is - the issue is section 14 liability under the Safety, Rehabilitation and Compensation Act for osteoarthritis of the right hip. The basis of the claim, the causative event being relied upon, is it's claimed that it's a secondary condition to a knee condition, an accepted knee condition. [Emphasis added] 19 The focus on "a secondary condition to a knee condition, an accepted knee condition", hitherto only a particular of "Whether the applicant's military service contributed to the claimed condition to a material/significant degree", will be noted. 20 Later in the hearing (p 6, line 5), Mr Hawker stated: if l understand correctly, the case for Mr Katterns is that the knee contributed to the onset of the osteoarthritis of the right hip. Because of the timeframes we're dealing with, it requires a significant contribution. 21 Though Mr Katterns did not lodge his own statement of issues, facts and contentions with the Tribunal, he had, in a preliminary exchange with the Commission, sent to it an email on 22 May 2014 (which became part of the material before the Tribunal), in which he stated, "Further to our conversation today I am writing to you on a secondary condition to my right knee osteoarthritis, I wish to claim compensation for my right hip condition." [sic] (T7, p 17). In the course of an introductory exchange with the Deputy President, Mr Hawker drew this email to his attention. 22 All of this occurred prior to Mr Katterns highlighting to those present at the hearing that he had a hearing difficulty and was having difficulty hearing the proceedings. Very properly, the Deputy President indicated to him that a hearing loop was available and adjourned so that this aid could be deployed for Mr Katterns' benefit. The transcript discloses that, this having occurred, Mr Katterns remarked that he could hear "a lot better". 23 After the adjournment, Mr Hawker repeated the narrower issue specification. Equally though, he raised no objection when the Deputy President put to Mr Katterns the Commission's statement of issues, facts and contentions as the case which he had to meet and against which, in conjunction with any submissions he cared to make, the Deputy President would decide the case. To this Mr Katterns replied (p 28, line 25), "I say that the military service in conjunction with and sequential with the knee aggravation led to the slower degeneration of the hip." Mr Katterns' use of the conjunctive is noteworthy for present purposes. 24 In a submission which he lodged after the hearing, Mr Katterns made detailed reference to opinions expressed about what had contributed to his hip condition. He referred to the duties which he had undertaken in the Army Reserve. He also posed this question, rhetorically, "Why then can't liability be accepted for aggravation of my hip osteoarthritis, when three orthopaedic doctors concur that my knees may well or likely have been an aggregative or contributing factor?" 25 For its part, the Commission, by its solicitor (Mr Dubé of Sparke Helmore) sent to the Tribunal on 11 July 2016 an email in which it was stated: Having reviewed the applicant's further written submissions the respondent does not propose to file further written submissions in the matter. The respondent relies upon its Statement of Issues Facts and Contentions and the oral submissions made at the hearing of this matter. [emphasis added] Once again, the use of the conjunctive in the passage emphasised is significant for present purposes. 26 In his reasons for deciding to set aside the Commission's decision, the learned Deputy President summarised the respective contentions of the parties in this way ([19] and [20]): 19. The applicant contends that his knee condition contributed to the onset of the osteoarthritis of the hip condition. 20. The respondent contends that the medical evidence does not establish that the applicant's condition was either materially contributed (if the condition arose before 13 April 2007) or significantly contributed (if the condition arose post 13 April 2007) to by the applicant's military service in the Army Reserves. The respondent further contends that the medical reports do not establish that the material or significant contribution tests are met … [Emphasis added] 27 The Deputy President stated ([29]) that, "I do not accept the submission of the applicant that the osteoarthritis of the right hip condition was aggravated by the knee condition of the applicant". Instead, he found ([30]), "the aggravation of the osteoarthritis of the right hip of the applicant is a disease that was contributed to in a material degree by the military service of the applicant being the employment of the applicant by the Commonwealth". It is this finding that the Commission contends entailed a denial of procedural fairness to it. That is because of the Tribunal's additional consideration of a direct contribution by Mr Katterns' military service to the hip condition. 28 The Commission's submission is that the Tribunal ought to have put to it (and inferentially also to Mr Katterns) and allowed to it an opportunity to make submissions about the possibility that the decision under review might be set aside on the alternative basis that Mr Katterns' military service directly contributed (significantly contributed) to an aggravation of the osteoarthritis of the right hip, rather than that the condition was a sequel to the accepted knee injury. 29 I was, on the hearing of the appeal, quite attracted to the force of this submission for the Commission. It is true that, on one reading of his correspondence, Mr Katterns put forward only the narrower theory as to what had resulted in his claimed right hip condition. Further, and perhaps derivatively, this is how Mr Hawker came to frame an issue in his oral submissions at the hearing. But he also embraced the formulation in the Commission's statement of issues, facts and contentions. That formulation was wider, raising also the more general question of "whether the applicant's military service contributed to the claimed condition to a material/significant degree". This bifurcation of issues was reinforced by the reference to a continued reliance on its statement of issues, facts and contentions in the Commission's solicitor's email of 11 July 2016 from which I have quoted. 30 Against this background, I do not consider that it can be said that the Commission ever abandoned its wider issue formulation. Nor, having regard to the conjunctive passage I have quoted, did Mr Katterns abandon such a contention. It is just that the Commission chose to devote most attention in its submissions to the more narrowly formulated issue. That does not mean that it was not afforded an opportunity to be heard in respect of the wider issue formulation. All that it means is that the Commission chose not to take advantage of an opportunity that was extended to it, both at the hearing and thereafter by written submission, to address the very issues which the Commission itself had identified as arising for determination on the review. To adopt an analogy from military parlance, not inapt given the background to Mr Katterns' claim, the Commission situated its appreciation, rather than appreciated the situation. In the circumstances, had the learned Deputy President not dealt with the wider issue it might aptly have been contended that he had failed to take into account a relevant consideration. 31 For these reasons, I do not, on reflection, consider that there is any substance in the Commission's asserted denial of procedural fairness. 32 That conclusion means that other questions raised by the Commission must be addressed. Of these, the question as to whether the Tribunal had correctly applied the required statutory test is desirably addressed first. 33 As a result of legislative amendments, this is a question of some nicety. 34 After 12 April 2007, s 5A of the SRC Act defined the term "injury" thus: "injury" means: (a) a disease suffered by an employee; or (b) an injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee's employment; or (c) an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee's employment), that is an aggravation that arose out of, or in the course of, that employment; but does not include a disease, injury or aggravation suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee's employment. 35 This definition distinguishes between a disease and an injury other than a disease. In workers' compensation practice, "injury" in this latter sense is sometimes referred to as a "frank injury". It is convenient to adopt that description as a discriminator. The predecessor to that definition of "injury", which it is not necessary to reproduce, likewise drew a distinction between a disease and a frank injury. Mr Katterns' claimed hip condition was a "disease", rather than a frank injury. 36 On and from 13 April 2007, s 5B(1) of the SRC Act has defined the term "disease" to mean: (a) an ailment suffered by an employee; or (b) an aggravation of such an ailment; that was contributed to, to a significant degree, by the employee's employment by the Commonwealth or a licensee. 37 In turn, "significant degree" has, on and from that time, been defined by s 5B(3) to mean, "a degree that is substantially more than material". 38 The amendments which resulted in this position were made by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2007 (Cth) (2007 Amendment Act). Prior to the 2007 Amendment Act, the SRC Act defined "disease" 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 or a licensed corporation. 39 Whatever else it might mean, it is patent that the definition of "disease" introduced by the 2007 Amendment Act introduces a more demanding test than did the definition of "disease" which hitherto prevailed. 40 That provokes the thought, advanced in the written submission made on behalf of Mr Katterns, that if he were able to identify a right which accrued prior to the commencement of the amendment, his compensation claim might fall for determination by reference to the earlier, more benign, definition of "disease". This, too, as Esber v Commonwealth of Australia (1992) 174 CLR 430 notably highlights, can sometimes be a question of some nicety, depending on the applicable transitional provisions. Unlike some amending Acts, the transitional provisions in the 2007 Amendment Act make it tolerably clear as to which definition will be applicable to Mr Katterns' claim. 41 The effect of s 2 and Cl 41(1) of Sch 1 to the 2007 Amendment Act is that the present definition of "disease" applies in relation to an ailment (or an aggravation of that ailment) that an employee suffers on or after the day after the 2007 Amendment Act received Royal Assent (12 April 2007). Clause 42 of Sch 1 to the 2007 Amendment Act made similar provision in relation to the new definition of "injury". By virtue of Cl 41(2) of Schedule 1 to the 2007 Amendment Act and for the purposes of Cl 41(1), an employee suffers an ailment (or aggravation) on the day determined under s 7(4) of the SRC Act. Subsection 7(4) of the SRC Act was not itself affected by the 2007 Amendment Act. It provides: (4) For the purposes of this Act, an employee shall be taken to have sustained an injury, being a disease, or an aggravation of a disease, on the day when: (a) the employee first sought medical treatment for the disease, or aggravation; or (b) the disease or aggravation resulted in the death of the employee or first resulted in the incapacity for work, or impairment of the employee; whichever happens first. 42 It was put on behalf of Mr Katterns in written submissions that, as incorporated by reference by s 2 and Cl 41(2) of Sch 1 to the 2007 Amendment Act as the touchstone for the applicability of the amendments, s 7(4) was not exhaustive. That is not how I construe the words, "shall be taken to have sustained … a disease". They cover the field and in so doing dictate when an injury is, for the purposes of the SRC Act, deemed to have been sustained. 43 There was no "evidence" (in the general sense of that word) before the Tribunal that Mr Katterns first sought medical treatment for his right hip condition on or prior to 12 April 2007. In this way, a critical question for factual determination by the Tribunal was when that condition or an aggravation resulted in or first resulted in his incapacity for work, or his impairment? As to that, s 4(1) of the SRC Act defines "aggravation" to include "acceleration or recurrence" and "impairment" to mean: [The] loss, the loss of the use, or the damage or malfunction, of any part of the body or of any bodily system or function or part of such system or function. 44 As mentioned above, the Tribunal found that Mr Katterns' military service had contributed in a material degree to the osteoarthritis in his right hip. It was additionally put on behalf of the Commission that the learned Deputy President had not exposed his reasoning as to how the "material contribution" test found in the SRC Act prior to the commencement of the amendments made by the 2007 Amendment Act was applicable. With respect, it is true that his reasons do not make any detailed reference to the provisions of the 2007 Amendment Act. That would be of no particular moment if it could nonetheless be seen that the Deputy President had followed a process of fact finding ordained by the terms of the transitional provisions in that Act. 45 The Deputy President stated (reasons, [15]): 15. As the reserve service of the applicant preceded the 2007 amendments to the Act it is fair to apply the "material degree" test in s 4 of the Act as it stood prior to 13 April 2007. Certainly the letter that the respondent wrote to Dr Sharwood on 10 March 2015 requested an opinion based on the material degree test and not the significant contribution test under the 2007 amendments. The respondent was correct in seeking an expert opinion based on the material degree test having regard to the operation of s 7(4) of the Act. The applicant had first claimed to have experienced an "impairment" in terms of s 7(4)(b) of the Act as early as 1984 in the form of hip pain. There was no challenge to this account of the applicant. All of the reserve service of the applicant occurred before the 2007 amendments took effect. [footnote references omitted] In its briefing note to Dr Sharwood, a reporting orthopaedic specialist, the Commission did, as the Deputy President observes, seek an opinion by reference to "material degree". That, as Mr Hack QC also frankly acknowledged, was based on an understanding of the applicable law inconsistent with what the Commission later promoted to be the correct test to apply to Mr Katterns' claim. Nonetheless, the Commission's submission that statutory authority, not its conduct, is the only lawful basis for payment of funds from consolidated revenue, in this case the payment of compensation under the SRC Act, is correct: Formosa v Secretary, Department of Social Security (1988) 46 FCR 117; Roberts v Repatriation Commission (1992) 39 FCR 420, cf Robertson v Minister of Pensions [1949] 1 KB 227. The Deputy President was not, with respect, entitled to apply the earlier, "material degree" test on the basis of what he considered was "fair" to Mr Katterns but only if, on the facts found, s 7(4) of the SRC Act, for the reasons given above, permitted that. Neither limb of s 7(4) focussed upon when a claimant's service in the Reserve Forces had occurred. Any payment of compensation made otherwise than according to law would be recoverable by the Commission as public money paid without statutory authority: Auckland Harbour Board v The King [1924] AC 318. 46 In fairness to the learned Deputy President, he does, in addition to his reference to what would be "fair", also refer in the passage quoted to s 7(4)(b) of the SRC Act. It is necessary to remember that the reasons of an administrative tribunal, like those of other administrators in the Executive, must not be read narrowly with an eye for error: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259. Even so, the finding that there was an impairment, before 13 April 2007 is grounded on a complaint of hip pain in 1984. This, in turn, leads to a need to consider a further question raised by the Commission, which is whether pain alone can constitute an "impairment" for the purposes of the SRC Act? 47 The Commission submitted that the finding made by the Tribunal at [15] in respect of Mr Katterns' complaint of hip pain in 1984 could, in context, only be read as a finding that, for the purposes of s 7(4)(b) of the SRC Act, he had then suffered an "impairment", as defined. I agree. Yet pain, per se, is not an "impairment" as defined. In Canute v Comcare (2006) 226 CLR 535 at [11] the following observation was made in respect of the definitional position: The definition of 'impairment' (and by extension the concept of 'permanent impairment') is expressed in terms of effects on bodily parts, systems and functions. 48 The Commission fairly and correctly conceded that pain could in certain circumstances constitute an aggravation of a pre-existing injury (see, for example, in Commonwealth v Beattie (1981) 53 FLR 191 at 200-201, (Beattie) and Tippett v Australian Postal Corporation (1998) 27 AAR 40 at 43-44). In Beattie, Evatt and Sheppard JJ, at 200-201, discussed and regarded as of continuing relevance observations separately made on this subject in respect of earlier workers' compensation legislation by Windeyer J and Kitto J respectively in Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626. From these it follows that pain brought on by the undertaking of particular activities in the course of Army Reserve service could constitute an aggravation of a pre-existing injury, even though there was no underlying pathological change evident. The pain might be such as to limit particular bodily functions and so constitute an "impairment". In turn, unless denied by medical science, the experience of pain having this effect might make a hitherto quiescent condition manifest and indefinitely continuing with this limiting effect. Necessarily, conclusions of fact based on material reasonably capable of supporting such conclusions are entailed in determining whether the experience of pain can constitute an "impairment" as defined. 49 The Commission submitted that the learned Deputy President had not exposed his reasoning as to why the pain he accepted Mr Katterns had commenced to suffer in 1984 constituted an "impairment". It further submitted that the material before the Tribunal did not in any event admit of a conclusion that there was an impairment before 13 April 2007. 50 To address these submissions it is necessary to set out a further part of the Tribunal's reasons ([30] to [32]): 30. I find that the osteoarthritis of the right hip of the applicant is a disease within the meaning of the former s 4(1) of the Act being an ailment. I find that the aggravation of the osteoarthritis of the right hip of the applicant is a disease that was contributed to in a material degree by the military service of the applicant being the employment of the applicant by the Commonwealth. 31. Determining the date of onset of the disease is not without some difficulty. Although Dr Sharwood was listed as a witness he could not be questioned on this issue because he was not called. Certainly there can be no doubt that in July 2014 the osteoarthritis of the right hip was diagnosed. I should, however, consider whether there was an earlier onset of the condition. Dr Sharwood has commented that there was no formal diagnosis of the condition in 1995 or before July 2004. The onset of a condition can be on a particular date despite there being no formal diagnosis on that date. 32. It would be fair to determine that the date of onset of the disease had occurred by 1994 at the latest. In June 2012 the records of Dr Hameed refer to the advanced degeneration of the right hip joint which required the applicant to walk with a stick. Having regard to the advanced degeneration of the joint it is fair to make an inference that the onset of the hip was sometime before 2012. Indeed the applicant has complained of hip pain as early as 1984 and he was not challenged on this account. Dr Vecchio reported upon the aggravating events with manoeuvres in 1993 and 1994. This is when the applicant experienced the excessive stresses that Dr Sharwood considers accelerated the onset of his hip condition. Certainly, when the respondent wrote to Dr Sharwood on 10 March 2015 to seek an opinion based on the material degree test there seems to have been an assumption that the aggravation occurred before the 2007 amendments. [Footnote references omitted] 51 Neither limb of s 7(4) of the SRC Act directed the Tribunal to fix "the date of onset of the disease". As mentioned, s 7(4)(b) of the SRC Act required a different question to be answered. And that answer was not supplied by what was "fair". 52 Dr Sharwood was due to give evidence on the day of the hearing. However, the Deputy President was informed by Mr Hawker that the parties no longer required his attendance. That meant that the material before the Tribunal comprised the various medical reports, including from Dr Sharwood in the s 37 or "T" documents, other records and statements in correspondence found there and statements which Mr Katterns made to the Deputy President from the Bar table at the hearing. Mr Katterns did not go into the witness box so as to give evidence on oath or affirmation at the hearing. 53 In his report dated 8 September 2014, Dr Sharwood recorded (PT 11, Appeal Book, p 36), under the heading "Right Hip", "Mr Katterns states that he developed pain in the right hip over the last two to three years." 54 In his request dated 25 September 2014 for reconsideration by the Commission of its initial decision (part of the s 37 documents), Mr Katterns stated, with reference to this report of Dr Sharwood: Nor does Dr Sharwood note how I have experienced severe degenerative osteoarthritis pain in my right hip for years prior to two and three years ago. Years that go back to 1988 and beyond.# I used to endure hip pain during my eligible years of service with Australian Army Reserve Forces between 1984 and 1995, covered under the SRCA. My knee pain and mobility discomfort did override any developing hip pain and mobility condition I experienced then.# I was a lot younger back then, and my body healed more quickly. I could endure pain and discomfort better than I can today and certainly in the last five years. [sic] 55 The source of the Deputy President's references (reasons, [15] and [32]) to the experience of hip pain in 1984 would appear to be the statement in this reconsideration request. Correctly, in respect of a decision-making body not bound by the rules of evidence, the Commission conceded that, providing a reason was furnished, the Tribunal was entitled to act on this statement: s 33(1)(c), AAT Act; Sullivan v Civil Aviation Safety Authority (2014) 226 FCR 555. The Commission submitted that there was a difference as to when Mr Katterns stated he had experienced hip pain as between the statement in his letter of 25 September 2014 and that recorded in Dr Sharwood's report of 8 September 2014. It complained that the learned Deputy President had not explained why he preferred the statement in Mr Katterns' letter. 56 That there is a difference in the accounts is obvious. But the Deputy President did explain why he adopted 1984. He stated that (reasons, [32]), "he was not challenged on this account". Assuming that was so, this was a sufficient explanation. If the Commission intended that the Tribunal not act on any particular statement made by Mr Katterns in the material before the Tribunal, it was for the Commission to highlight that in the course of the hearing so that, if he chose, Mr Katterns might give explanatory evidence on oath or affirmation and be cross-examined about that explanation and that difference. This the Commission did not do. The hearing which did take place was, as I have already observed, informally conducted. It is true that there was, in the course of it, reference to Mr Katterns' giving evidence, but there was no insistence on this by the Commission for the purpose in respect of resolving the difference of which it now complains. 57 I have already mentioned above some risks which can attend an informally conducted hearing. Another is that it may be left opaque as to which, if any statements from the Bar table or in the s 37 documents are to be treated as having evidentiary status or persuasive weight and which are not in the absence of verification and perhaps also supplementation by evidence given under oath or affirmation. [I use "evidentiary status" in the general sense of material reasonably capable of supporting an administrative decision, even though that material may not be admissible under the law of evidence.] This is not to question the position taken as settled in Rana. Subject to observing procedural fairness, the Tribunal is entitled to mould its procedures according to the circumstances of a particular case. Administrative decision-making is not uncritically to be assimilated with an exercise of judicial power. That is not to say it cannot be guided by analogy in situations of evidentiary controversy. But it was for the Commission to highlight that controversy. Especially that was so at a hearing where the Commission had the benefit of legal representation and Mr Katterns did not. 58 Yet to conclude that the Tribunal was entitled to find that Mr Katterns experienced hip pain in 1984 (and, for that matter, between then and 1995) and gave an adequate explanation for this does not conclude this proceeding against the Commission. For its submission that pain, per se, is not an impairment is, as explained above, correct. 59 Paragraph 15 of the Tribunal's reasons does nothing more than impermissibly equate the experience of pain in 1984 with an impairment. Given this, if there is any explanation in the Tribunal's reasons for why that experience (or between then and 1995) constituted an impairment and thus one which first occurred before 13 April 2007 it must be found in [30] to [32], quoted above. 60 In his further report of 16 February 2015 (Part 1), Dr Sharwood diagnosed that Mr Katterns suffered from osteoarthritis of the right hip. He further opined (Part 2, [4] – answer, "Yes") that this condition was caused prior to 1 July 2004 by some feature of Mr Katterns' military service. His opinion was that it was not, prior to 1 July 2004, aggravated by this service (Part 2, [4] – answer, "No"). As to the degree of causation, Dr Sharwood opined, "I believe that the service in the Australian Defence Force contributed to the causation of the condition probably (c) 10 – 20%" (Part 2, [5]). Perhaps inconsistently with his preference for causation, Dr Sharwood further opined in this report (Part 2, [8]) that, "The effect of the ADF employment effects ceased on his discharge from the Defence Force in 1995". He further remarked (Part 2, [10]) in respect of the osteoarthritis that it was "constitutional" but "acquired during Military employment and developed following discharge". In light of these opinions and having regard to the terms of s 7(4)(b) of the SRC Act, there was much fertile ground for questions to be directed to Dr Sharwood seeking the benefit of further explanations from him. This did not occur. Paragraph 7(4)(b) of the SRC Act required evidentiary attention to be given as to what was the day when the disease first resulted in the incapacity for work, or impairment. 61 The learned Deputy President did not refer in his reasons to any of the details, which I have just mentioned, in this report. He made a general reference (at [32]) to Dr Sharwood's having stated, "This is when the applicant experienced the excessive stresses that Dr Sharwood considers accelerated the onset of his hip condition." The source for this, though not stated in the reasons, is undoubtedly a report from Dr Sharwood dated 27 March 2015. In that Dr Sharwood opined (PT24, appeal book, p 86) that, though the right hip osteoarthritis was "essentially constitutional" that condition "has a multifactorial aetiology". He further stated (ibid): • "If the degree of excessive stresses placed upon the joint as described by Mr Katterns are accepted as being a causative or accelerative factor, and this is possible, part of the aetiology may be related to this." • I … would concede that perhaps the excessive stresses placed on the joint would be a contributing factor. Whether this is considered causative or accelerative is purely a matter of semantics. Prior to July 2004 as far as I know Mr Katterns was never diagnosed as having osteoarthritis of the hip and therefore the excessive stresses could not be an aggravating factor." 62 In EMI (Australia) Ltd v Bes [1970] 2 NSWR 238 at 242 (EMI (Australia( v Bes), Herron CJ stated: … if medical science is prepared to say that it is a possible view, then, in my opinion, the judge after examining the lay evidence may decide that it is probable. It is only when medical science denies that there is any such connexion that the judge is not entitled in such a case to act on his own intuitive reasoning. It may be, and probably is, the case that medical science will find a possibility not good enough on which to base a scientific deduction, but courts are always concerned to reach a decision on probability and it is no answer, it seems to me that no medical witness states with certainty the very issue which the judge himself has to try. 63 In his written submissions, Mr Carter put forward that the Tribunal's conclusion might be supported by the approach described by Herron CJ in this case. That form of reasoning is as much permissible to the Tribunal as it is in a court. One difficulty about accepting the submission about it in this case is that the learned Deputy President did not refer to it. Another is that Dr Sharwood was not asked, because he was not called, whether the continuum of hip pain between 1984 and 1995 to which Mr Katterns referred could be regarded as an early manifestation of the later diagnosed osteoarthritis. More particularly, there was no evidence from Dr Sharwood, Mr Katterns or anyone else as to what was the day when the disease first resulted in incapacity for work, or impairment. 64 The Deputy President also referred (at [32]) to a report from Dr Vecchio. This practitioner furnished a report to the Commission dated 30 May 2006. The focus of that report was on the condition in Mr Katterns' knees. Nonetheless, in the course of it, he made general reference (at page 2) to the types of strenuous activities in which Mr Katterns had engaged in the course of his military service. This was sufficient, in the context of administrative decision-making, to support a finding that Mr Katterns had undertaken such activities. But Dr Vecchio made no reference at all to Mr Katterns' hips, much less that pain therein might be associated with a manifestation and presence of the osteoarthritis later diagnosed or the day when osteoarthritis of the right hip first resulted in incapacity for work, or impairment. 65 It only comes to this. If, in terms of s 7(4)(b) of the SRC Act, the disease or aggravation first resulted in the incapacity for work, or impairment of Mr Katterns prior to 13 April 2007, it then fell to the Tribunal to decide the review proceeding by reference to the more benign definition of "injury", that is by reference to the "material degree" test. The Tribunal did not, as with respect it should have, approach the determination of this case through the prism of s 7(4)(b) of the SRC Act, as required by the transitional provisions in the 2007 Amendment Act and the absence of anything in the material before it to make s 7(4)(a) of the SRC Act relevant. It is not possible to support the Tribunal's conclusion on the basis of the reasons furnished by the learned Deputy President. The case will have to be remitted to the Tribunal for rehearing according to law. 66 In fairness to the learned Deputy President, I feel obliged to add the following. 67 The Deputy President did not have the benefit of assistance by the presentation of evidence and submissions which focused attention on the full range of issues of law and fact which were raised for determination. Mr Katterns was unrepresented. It is not hard to see how a layman might reasonably associate the service he described with the hip condition. Having regard to the opinions expressed in Dr Sharwood's succession of reports, it is also not hard to see how a supportive case just might have been developed, putting forward for its acceptance the reasoning in EMI (Australia) v Bes. But that would have required some further questions to have been directed to Dr Sharwood and been dependent upon the answers given by him and also in evidence by Mr Katterns. In a case as technically difficult as the present, it was beyond Mr Katterns' abilities (which lay elsewhere) to elicit this, and that is not meant as a criticism of him. The Commission might have done this, and my reading of the transcript leaves me in no doubt that Mr Hawker was truly trying to assist the Tribunal and to be fair to Mr Katterns. His disposition was commendable, for a review proceeding is not strictly adversarial with any formal onus of proof. It is just that Mr Hawker had "situated the appreciation". That he did that was in turn in part the result of earlier correspondence to the Commission from Mr Katterns. In its own briefing notes to Dr Sharwood, the Commission had adopted the "material degree" formulation. The case required a very careful presentation to the Tribunal as to issues of law and related findings of fact which would have to be made to permit the measuring of the claim by reference to this formulation, as opposed to the later definition of "injury". The informality of the hearing, adopted with the best of intentions, was not conducive to this, given the disparity in representation. 68 Given the opportunity cost to public funds of both the hearing of this appeal and of any further hearing in the Tribunal, it might well be thought that there could have been a net saving of public funds had there been some provision from them for experienced legal assistance to Mr Katterns in the proceeding before the Tribunal. 69 While the formal orders must be to set aside the Tribunal's decision and to remit the case, this does not necessarily mean that it must ever result in another hearing in the Tribunal. If, upon the consideration of these reasons and the seeking of further assistance from medical experts and also Mr Katterns the view is reached that there is an entitlement to compensation a consensual resolution may be possible. This compensation claim has been afoot for a long time and Mr Katterns is neither getting any younger nor, on the uncontroverted evidence, is his right hip any better. 70 Very properly, the Commission did not seek any order in respect of costs. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 7 June 2017