Consideration
10 The Tribunal must give what it considers to be the correct or preferable decision: Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 18 per Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ. It must also give reasons for its decision under s 43(2) of the Administrative Appeals Tribunal Act and, where, as here, it does so, s 43(2B) required that:
those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.
11 Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ said in Dalton v Deputy Federal Commissioner of Taxation (1986) 160 CLR 246 at 250 that the purpose of an analogue of s 43(2B) was:
to enable a person affected by a decision for which reasons must be given to be supplied with findings and a reference to the evidence or other material on which they were based so that he may shape the course of his future conduct accordingly. (emphasis added)
12 Moreover, the purpose of a provision such as s 43(2) is to enable a court judicially reviewing the Tribunal's reasons for its decision, first, to identify the findings that it made in reaching its conclusion, and, secondly, to infer, in appropriate cases, that the Tribunal did not consider to be material any matter that it did not mention in those reasons: Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 346 [69] per McHugh, Gummow and Hayne JJ; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 224 [39] per Gleeson CJ, Gummow and Heydon JJ. As McHugh, Gummow and Hayne JJ said in Yusuf 206 CLR at 346 [69]:
The Tribunal's identification of what it considered to be the material questions of fact may demonstrate that it took into account some irrelevant consideration or did not take into account some relevant consideration [Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24]. (emphasis in original)
13 A purpose of the Parliament in providing for the three classifications in the definition of "injury" in s 3, was to expand the range of injuries for which compensation could be payable by providing for it to include a disease, an injury (other than a disease) and an aggravation of a physical or mental injury (other than a disease). Importantly, the definitions of both "disease" and "injury (other than a disease)" included physical and mental affects, namely, in the former case, by reference to the definition of "ailment", as meaning "any physical or mental ailment, disorder, defect or morbid condition" and in the latter, by reference to the definition of "injury (other than a disease") as meaning "a physical or mental injury arising out of, or in the course of, the employee's employment".
14 Thus, the fact that the injury complained of affects physiologically a person's mental condition or state is neutral as to whether the injury falls within one or other or both of the definitions of "disease" and "injury (other than a disease)". Whether it falls within a particular definition is a question of fact involving, often, expert evidence as to the correct or appropriate classification of the particular injury in all of the circumstances of the seafarer's case.
15 As six justices held in Kennedy Cleaning Services Pty Ltd v Petkoska (2000) 200 CLR 286, over the years, workers' compensation legislation has tended to expand some of the range of compensable matters beyond injuries (in the natural and ordinary meaning of "injury"), so as to include diseases as an extension of, rather than an alternative to, what would otherwise be comprehended by the field of work-related physical or mental injuries: see Petkoska 200 CLR at 301-302 [43]-[46] per Gleeson CJ and Kirby J, at 305 [56] per Gaudron J and at 309-310 [70]-[73] per McHugh, Gummow and Hayne JJ.
16 The compendious expression "injury" as defined in the Seafarers Act includes physical and mental states of affairs that may fall within each of the limbs (or subparagraphs) in the definition. A stroke or heart attack may be a manifestation of both a disease and an injury (other than a disease) or they may be one or the other. Because the definition of "ailment" includes a "morbid condition", I will use the expressions physical state and mental state to describe in a neutral way an injury (in the broad sense of that word in the definition in s 3). A physiological state that a person may have or suffer can be both or, depending on the facts, one or other of a disease or injury (other than a disease) in the sense in which s 3 defines those expressions.
17 As Dr Chalk made clear in his evidence, it can be medically, and may also be legally, correct to describe an adjustment disorder of the kind that Mr Bailey experienced as either or both an injury (other than a disease) and a disease. Usually when a person experiences a broken bone, that will be classified as an injury (other than a disease), but it may be possible for it to fall within the definition of an aggravation of an ailment, if the person has a disease affecting the soundness of his or her bone structure.
18 The Seafarers Act does not prescribe a binary choice into which a seafarer's claimed injury, being a physical or mental state, necessarily must fall. Rather, the scheme of the Seafarers Act provides that compensation will be payable to a seafarer if his or her mental or physical state falls within a particular statutory provision even if it is excluded from a different provision in that Act. A seafarer can, as Mr Bailey did, rely on alternative statutory paths to seek compensation. In particular, he claimed that his adjustment disorder was an "injury" (as defined).
19 In Petkoska 200 CLR at 308-309 [68]-[70], McHugh, Gummow and Hayne JJ explained that the statutory provisions in question there (the Workers' Compensation Act 1951 (ACT)) did not create a strict dichotomy between "injury" and "disease". They said that:
[t]he circumstance that a sudden physiological change has been caused or provoked by disease does not prevent it from constituting a "physical injury" for the purposes of s 7(1).
20 Earlier, they had identified that s 7(1) of the ACT legislation imposed liability on an employer in respect of personal injuries which answered either of two criteria, namely those "arising out of" and "in the course of" the employment, even though the criteria were expressed disjunctively (200 CLR at 307 [63]-[64]). Gleeson CJ and Kirby J reasoned similarly, holding that the statute there did not expressly provide that "injury" and "disease" were alternatives, as it might have done (200 CLR at 301 [41]).
21 French CJ, Kiefel, Nettle and Gordon JJ considered, in Military Rehabilitation and Compensation Commission v May (2016) 257 CLR 468, the structure of the definition of "injury" s 4(1) of the Safety, Rehabilitation and Compensation Act 1988 (Cth), which is analogous to that of the definition of injury in s 3 of the Seafarers Act. They recognised that, again, the definition of "injury" comprising of both "disease" and "injury (other than a disease)" did not necessarily create a dichotomy. They explained why that result followed in their reasons that I refer to below (257 CLR at 482-483 [50]-[56], esp at [54]). Their Honours commenced their reasoning, before identifying two questions. They said (257 CLR at 481 [47]-[49]):
That an "injury" in the primary sense can arise, and can be described, in a variety of ways does not mean that "suddenness" is irrelevant. As the Full Court said, "suddenness" is often useful where there is a need to distinguish a physiological change from the natural progress of an underlying (and in one sense, closely related) disease [May (2015) 233 FCR 397 at 425 [110]] (as occurred in Zickar v MGH Plastic Industries Pty Ltd [(1996) 187 CLR 310 at 332] and Kennedy Cleaning [(2000) 200 CLR 286 at 288-289 [5]-[8], 300 [39]]). But it is the physiological change - the nature and incidents of that change - that remains central.
That an "injury" in the primary sense can arise, and be described, in a variety of ways was recognised by Gleeson CJ and Kirby J in Kennedy Cleaning [(2000) 200 CLR 286 at 300 [39]] when their Honours stated:
"[C]onsideration [must] be given to the precise evidence, on a fact by fact basis, concerning the nature and incidents of the physiological change accepted at trial. If this evidence amounts, relevantly, to something that can be described as a sudden and ascertainable or dramatic physiological change or disturbance of the normal physiological state, it may qualify for characterisation as an 'injury' in the primary sense of that word."
(Emphasis added.)
It is against that background that the Act requires the tribunal of fact to give consideration to "the precise evidence, on a fact by fact basis, … accepted at trial" [Kennedy Cleaning (2000) 200 CLR 286 at 300 [39]] and then to ask certain questions in order to determine whether an employee is suffering a "disease" or an "injury (other than a disease)".
(italic emphasis in original; bold emphasis added)
22 French CJ, Kiefel, Nettle and Gordon JJ then posed two questions, first, whether the evidence amounted to something "that can be described as an 'ailment'" and, if so, secondly, whether the person's employment contributed to a material degree to that state (257 CLR at 482 [50]). They said that if the answer to both questions were "yes", there was a "disease" within par (a) of the meaning of "injury". If there were not such a "disease", the tribunal of fact next had to ask if there were an "injury (other than a disease)" within par (b) (257 CLR at 482 [51]-[53]), but, importantly they then said (at 482-483 [54]-[56]):
It may be that there are circumstances in which the identification of a physiological change, a disturbance of the normal physiological state or a psychiatric disorder may satisfy the definition of "ailment" (and therefore result in a positive answer to the first question) but the second question is answered "No". But if that is the position on the evidence, there will not be any relevant overlap between a "disease" and an "injury (other than a disease)" in the definition of "injury" in s 4(1) of the Act. It reflects the fact that there are marked differences between arising "out of" or "in the course of" (in para (b)) and "contributed to in a material degree" (for para (a)) in the definition of "injury". And it simply means that the employee was unable to satisfy the different level of employment connection required under para (a) of the definition of "injury" under the Act.
This construction of the definition of "injury" in s 4(1) of the Act does not "rob" [Kennedy Cleaning (2000) 200 CLR 286 at 300 [40]] the "disease" limb of utility. The "disease" limb of the definition remains an additional basis of liability [cf Australia, House of Representatives, Parliamentary Debates (Hansard), 27 April 1988, p 2192].
The proper construction of the Act reflects the importance of the distinction drawn by the Act between "disease" and "injury (other than a disease)" in the definition of "injury" in s 4(1) of the Act and recognises that each creates a different basis for liability under the statutory scheme. (emphasis added)
23 Thus, their Honours recognised that, ordinarily, one can proceed sequentially through the definition of "injury" to ascertain whether the physical or mental state of the worker or seafarer answers all of the elements of each defined term. However, there can be cases where that state can meet parts of the definitions of "disease" and "injury (other than a disease)", but not all of the elements of one or other definition.
24 However, they also explained that the categories of "disease" and "injury (other than a disease)" within the definition of "injury" were not mutually exclusive, saying (257 CLR at 483 [56]):
The proper construction of the Act reflects the importance of the distinction drawn by the Act between "disease" and "injury (other than a disease)" in the definition of "injury" in s 4(1) of the Act and recognises that each creates a different basis for liability under the statutory scheme. (emphasis added)
25 And, in Prain v Comcare [2017] FCAFC 143 at [72], Kenny, Tracey and Bromberg JJ held that the authorities, including Petkoska 200 CLR 286 and May 257 CLR 486, "show that if the Tribunal did in fact treat 'disease' and 'injury (other than a disease)' as mutually exclusive categories, it would have been in error". They held at [76] that, in that case, the Tribunal had examined the evidence before it in order to determine the nature and incidents of the change to Mrs Prain's mental state, as the authorities required. They cited May 257 CLR at 484 [62] where French CJ, Kiefel, Nettle and Gordon JJ said:
The "nature and incidents of the physiological [or psychiatric] change" [Kennedy Cleaning (2000) 200 CLR 286 at 300 [39]] will determine whether there was an "injury (other than a disease)". The evidence to be adduced, of course, will vary from case to case and, where appropriate, may take into account common-sense inferences drawn from a sequence of events [cf Adelaide Stevedoring Co Ltd v Forst (1940) 64 CLR 538 at 563, 564. But see also at 569, 570]. To take an extreme example, the dismemberment of a limb involves a physiological change as a matter of common sense. But there must be more than an assertion by an employee that he or she feels unwell. (emphasis added)
26 Kenny, Tracey and Bromberg JJ held (Prain [2017] FCAFC 143 at [74]) that "whether or not a mental illness is to be categorised as a 'disease' or, alternatively, an 'injury (other than a disease)' will depend on the nature and incidents of the psychological change".
27 Accordingly, the Tribunal of fact first must ask itself the question whether the injury complained of is, on the evidence, properly described as an "ailment suffered by an employee … that was contributed to in a material degree by the employee's employment". Necessarily, there must be both physical and mental phenomena that, depending on their incidents, will be either a disease or an injury (other than a disease) within the meaning of s 3 of the Seafarers Act. That is because both terms comprehend physical and mental states.
28 After the Full Court published its decision in Prain [2017] FCAFC 143 we invited the parties to make written submissions as to its effect, if any, on their arguments. The respondent, Broadsword Marine Contractors Pty Ltd, repeated its earlier concession, in oral argument, that the Tribunal had "not articulated as clearly as it ought" the reason why it had treated Mr Bailey's mental health condition as a disease. Broadsword also conceded that the Tribunal had erred in its conclusion that it had not been material to decide whether the onset of his mental health condition was sudden or gradual, but, it contended that the error "demonstrates more clearly that Mr Bailey's argument is flawed and that, contrary to [his] Notice of Appeal, the only conclusion open on the evidence was that Mr Bailey's adjustment disorder was a 'disease' rather than 'an injury (other than a disease)'."
29 However, like the Tribunal, Broadsword did not articulate any basis on which it relied to support its contention that Mr Bailey's adjustment disorder necessarily fell, and could only fall, within the definition of "disease".
30 In ordinary parlance it is easy enough to understand that a common cold is a "disease" whereas a broken leg is an "injury (other than a disease)". But, as in Petkoska 200 CLR 286, a person can suffer from a disease that, itself, produces an injury (other than a disease), the latter of which is separately compensable under legislation such as the Seafarers Act.
31 Here, the Tribunal did not analyse or ask itself the question whether, or make findings of fact about, the nature and incidents of the physiological change to Mr Bailey's mental state on the evidence, to ascertain if it was a mental "ailment" as defined in s 3 or, if not, it was a mental "injury (other than a disease)". Instead it referred to assumed or conceded factual matters in other contexts, in [22] of its reasons, none of which considered, let alone decided, whether the particular set of facts before the respective tribunals of fact was or was not an "ailment" as defined. The Tribunal did not give any consideration, in answering the statutory question as required, to the precise evidence of what happened to Mr Bailey's mental state in 2014 when he suffered the injury for which he sought compensation: May 257 CLR at 481 [49].
32 Instead, the Tribunal merely asserted, wrongly, that a "mental health condition has been held to be an ailment under the definition in s 4 of the Safety, Rehabilitation and Compensation Act". That was wrong, because no such finding had been made in any of the cases that the Tribunal cited and even if it had, that would have been a factual, not legal, conclusion in the circumstances of the particular matter. That factual conclusion could not be relevant to, or determinative of, the ascertainment of the medical and factual issues going to the classification of Mr Bailey's mental state as an "injury" of one kind or another within the categories in the definition of injury in s 3.
33 Accordingly, no decision to which the Tribunal referred had held, as a factual or legal finding, that a "mental health condition" was an "ailment". But even if the Tribunal's unfounded assertion were correct, each finding would have been arrived at on precise evidence, on a fact by fact basis, applying the relevant definitions of "disease" and "injury (other than a disease)" in the individual circumstances of the particular proceeding in which it was made: Petkoska 200 CLR at 300 [39]; May 257 CLR at 481 [49]. Such a finding could not create any precedent or factual or legal conclusion apposite to decide Mr Bailey's claim.
34 Dr Chalk gave evidence that an adjustment order and, in particular, Mr Bailey's adjustment disorder, was not a disease. He considered that it was an injury because it had occurred as a consequence of an event. The Tribunal, without any reasoning, stated at [23] of its reasons that it found that:
the mental condition of [Mr Bailey], which [has] been diagnosed as an adjustment disorder, is an "ailment" and therefore a "disease" for the purposes of s 10(7) of the Act.
35 Having made the erroneous assertion that "a mental health condition" was an ailment, the Tribunal then found that s 10(7) operated to exclude Mr Bailey's entitlement to compensation. Such a finding could only be made if the Tribunal had addressed the factual issue of whether Mr Bailey's mental state for which he sought compensation was an "ailment" as defined and, if it were, whether his employment by Broadsword had contributed in a material degree to it.