Comcare v Hart

REASONS FOR JUDGMENT 1 This is an appeal from a decision of the Administrative Appeals Tribunal ('the Tribunal') given on 10 February 2004 in a proceeding instituted by the respondent, Olga Hart, under Pt VI of the Safety, Rehabilitation and Compensation Act 1988 ('the Act'). In that proceeding the Tribunal determined that the applicant ('Comcare') was liable to pay compensation to Ms Hart pursuant to s 14(1) of the Act 'for an adjustment disorder the onset of which occurred around July/August 2000'. The Tribunal also ordered that part of the costs of that proceeding incurred by Ms Hart be paid by Comcare. 2 The Tribunal commenced its reasons for decision with the following summary: '1. [Ms Hart] had been employed by the Department of Defence (the Department) for some years when she made a claim for rehabilitation and compensation on 18 August 2000. She said that she suffered from depression and anxiety and an adjustment disorder with anxious and depressed mood caused by events associated with her application for three positions. 2. Although [Comcare] accepted that she suffered from an adjustment disorder the claim was rejected on 30 September 2000. Comcare was not satisfied that Ms Hart's employment materially contributed to her condition. Furthermore the exclusionary provision which provides that compensation is not payable for injuries which result from failure to obtain a promotion applied to Ms Hart's case. This decision was upheld on review on 4 January 2001. 3. The initial claim for compensation centred on events associated with Ms Hart's lack of success with a number of job applications but over time its ambit has broadened. The case presented to the Tribunal was a nature and conditions claim based on the cumulative effect of a large number of incidents in the course of Ms Hart's employment with the Department. I have not accepted many of Ms Hart's claims concerning these incidents, nor that they contributed to her accepted adjustment disorder. 4. However I am satisfied that a number of incidents associated with the application, interview and promotion process contributed materially to Ms Hart's condition. I am also satisfied that these incidents do not fall within the exclusionary provision. As Comcare conceded that Ms Hart is incapacitated for work she is entitled to compensation in accordance with the Act. I have therefore set aside the reviewable decision.' 3 The exclusionary provision referred to by the Tribunal in the above summary is that part of the relevant definition in s 4(1) of the Act, which provides: 'injury means … but does not include any such disease, injury or aggravation suffered by an employee as a result of reasonable disciplinary action taken against the employee or failure by the employee to obtain a promotion, transfer or benefit in connection with his or her employment.' The questions of law raised on this appeal concern that provision. 4 Because Ms Hart submitted that hers was 'a nature and conditions claim', which was 'not based around one single incident but rather around the cumulative effect of a series of incidents in the course of [her] employment with the Department', the Tribunal first gave attention to the main incidents said to have cumulatively contributed to her current condition. It came to the view that Ms Hart was not a credible or reliable witness. The Tribunal was, however, satisfied that she was suffering from an adjustment disorder. Accordingly it considered the medical evidence in order to deal with Ms Hart's contention that her condition was the consequence of events at work dating back to 1996 or 1997. Conflicting opinions on this question were expressed by two consultant psychiatrists, Dr Hugh Veness and Dr John Champion. The Tribunal rejected Dr Veness's opinion that a whole series of events commencing in 1996 or 1997 cumulatively contributed to the adjustment disorder. Instead, it accepted Dr Champion's view 'that the onset of the disorder occurred during the promotion related episodes'. The Tribunal said that it was 'therefore satisfied that Ms Hart first suffered the psychiatric condition of an adjustment disorder the subject of the claim around July-August 2000.' 5 The Tribunal examined the evidence relating to what it described as 'incidents associated with the application, interview and promotion process' for three positions in the Department of Defence. Ms Hart was to be interviewed for the first position on 3 March 2000. That interview was cancelled when the position was eliminated. She was interviewed for the second position on 22 June 2000 and for the third position on 19 July 2000. Ms Hart was not promoted to either position. The Tribunal found that the decision to cancel the first interview was not directed at Ms Hart and that the two interviews were conducted fairly. However, it did observe that the person appointed at Ms Hart's request to observe the second interview would not be seen by a fair minded outsider as being 'truly independent'. The Tribunal said: '76. As I have found at paragraph 46 the onset of Ms Hart's adjustment disorder was around July-August 2000. … I am satisfied that it was the "promotion related episodes" which led to Ms Hart's adjustment disorder. 77. But the question arises which "promotion related episodes" - those that can be seen as related to her failure to gain promotion and/or those associated incidents which form part of the broader application, interview and promotion process. It was Ms Hart's submission that it was not so much the failure to gain a promotion but the process associated with it that was critical. On the other hand Comcare argued that Ms Hart's illness was simply a result of her lack of success in obtaining promotion.' 6 After further referring to the medical evidence, the Tribunal said: '84. On balance I am persuaded that a number of elements materially contributed to Ms Hart's adjustment disorder. These include but are not limited to Ms Hart's failure to be promoted to the [first and second] positions. I note that on Mr Watson's evidence she was not advised of her lack of success with the [third] position until after she had been diagnosed with this condition. 85. The other elements which I am satisfied both occurred and contributed to a material degree to Ms Hart's adjustment disorder are: · the cancellation of the interview for the [first] position · the late notification to Ms Hart of the cancellation probably on the morning of the interview · the nature and manner of the questioning during the interview for the [second] position on 22 June 2000 · the appointment of Mr Andrew Smith, a staff member from Mr Tolano's branch, as an "independent" observer for the [third position] interview. 86. I am therefore satisfied and find that issues related to the application, interview and promotion process as well as the actual failure to obtain promotion materially contributed to the onset of Ms Hart's adjustment disorder.' 7 The Tribunal then considered what it called the 'failure to obtain a promotion' exclusion. It reiterated its finding that Ms Hart's failure to be promoted to the first and second positions resulted in distress and disappointment and was a material contribution to her adjustment disorder and said that this failure clearly fell within the exclusion. However, the Tribunal said that the question arose whether the incidents set out in paragraph 85 of its reasons (reproduced at [6] above) also fell within the exclusion. It concluded: '93. … I am of the view that the exclusion does not apply to the contribution made to Ms Hart's adjustment disorder as a result of the promotion related incidents to which I have referred above. Here the injury cannot be characterised as flowing from Ms Hart's disappointment and distress at failure to obtain a promotion. 94. Rather the injury occurred because of the upset and emotional disturbance to Ms Hart as a consequence of what she perceived to be the unfairness of the manner in which she was treated during the application, promotion and interview process. This included her misguided view that there was a conspiracy against her. …' The Tribunal later stated: '98. I have found that Ms Hart suffers from an adjustment disorder to which a series of work related incidents contributed. A number of these incidents - the promotion related incidents - do not fall within the exclusion to the definition of "injury" in section 4(1) of the Act. Ms Hart has therefore suffered an "injury" for the purposes of section 14(1).' 8 The grounds relied upon by Comcare are specified in its notice of appeal as follows: '4.1. The Tribunal erred in law by approaching the exclusion from the definition of "injury" in s 4(1) of the SRC Act on the basis that an employee's injury could not be said to have been suffered as a result of the employee's failure to obtain a promotion unless that failure was the only cause of the injury. 4.2. The Tribunal erred in law by failing to treat its finding that Ms Hart's failure to obtain a promotion materially contributed to her adjustment disorder (paragraphs 84 and 88 of the Tribunal's Reasons) as sufficient to exclude her adjustment disorder from the definition of "injury" in s 4(1) of the SRC Act. 4.3. The Tribunal erred in law by failing to consider whether aspects of the application, interview and promotion process that contributed to a material degree to Ms Hart's adjustment disorder (see paragraphs 85, 89 and 94 of the Tribunal's Reasons) were: (a) an aspect of, and not distinct from, Ms Hart's failure to obtain a promotion; or (b) properly characterised as Ms Hart's failure to obtain a benefit in connection with her employment. 4.4. On the findings made by the Tribunal, it was incumbent on the Tribunal to conclude that those aspects of the application, interview and promotion process were: (a) an aspect of, and not distinct from, Ms Hart's failure to obtain a promotion; or (b) properly characterised as Ms Hart's failure to obtain a benefit in connection with her employment.' 9 The first two grounds concern the true construction of the phrase 'as a result of' in the statutory definition reproduced in [3] above. The Tribunal's view, that the exclusion did not apply where the subject injury was not suffered solely as a result of the failure to obtain a promotion, apparently rested on the reasoning of Drummond J in Comcare v Mooi (1996) 69 FCR 439 at 447-448. Those remarks were obiter and do not support the distinction drawn by the Tribunal in the present case when it answered the question it had earlier posed in paragraph 77 of its reasons (reproduced at [5] above). 10 A supposed distinction between concerns about the promotional system and a failure to obtain promotion was advanced on the strength of Drummond J's remarks in Golds v Comcare [1999] FCA 1481, where it was given short shrift by Cooper J. His Honour said: '40. The finding in the present case was not that the applicant had concerns about the promotional system. It was that she was bitterly disappointed that she was not promoted to an ASO3 position and that she was frustrated and angry because her promotion from an ASO1 to an ASO3 position was slower and less predictable than she had anticipated. 41. In Trewin v Comcare (1998) 84 FCR 171, Heerey J said (at 177): "Moreover the concept of 'failure … to obtain a promotion, transfer or benefit in connection with … employment' has to be applied in the context of Commonwealth employment where there is a complex regime of industrial regulation with Awards, workplace agreements and appeal systems. Sometimes employees might have career-related legal rights, at other times no more than understandings and expectations. I think the intention to be deduced from the exception to the definition of 'injury' in s 4 is that Parliament recognised that injury, and particularly stress, might arise out of (sometimes no doubt quite justified) disappointment in Commonwealth careers but concluded that injuries so arising were, for policy reasons, not to be compensable." 42. I agree with these observations. The phrase "failure … to obtain a promotion, transfer or benefit in connection with … employment" must be read in the context of Commonwealth employment, which involves the creation of positions within a classified hierarchy. A promotion in this context means no more than to advance to a higher position in the bureaucratic structure. It is not necessary that the phrase be limited to a failure to be promoted to a specific position for which the person was an applicant. The legislative intention identified by Heerey J both permits and requires that disappointed hopes of advancement by promotion within the system which cause or contribute to a disease or illness be excluded as circumstances giving rise to compensable injury." 11 That judgment was relied on by Comcare in the present case, and the Tribunal was bound to apply the clear ratio of it and Trewin. It did not do so. Instead the Tribunal drew a spurious distinction between a failure to obtain a promotion occasioning disappointment and distress and an application, promotion and interview process causing upset and emotional disturbance. The holding in those cases may not be outflanked in this fashion. The extreme artificiality of the supposed distinction identified by the Tribunal is pointed up by its own use of the words 'promotion related' to describe the causative incidents. Those matters formed part of the interview procedures adopted by Ms Hart's employer, and each interview was integral to the relevant promotion process. The object of the statutory definition is pellucid , and the underlying policy is explained in the authoritative judgments that the Tribunal ignored. The concept of promotion under the Act has to be understood against the APS Values described in the Public Service Act 1999. In the present context, it is not necessary to look beyond s 10(2) of that Act. As Cooper J makes clear, for the purposes of the definition of 'injury' in s 4(1) of the Act, failure to obtain a promotion will not be precisely timed by reference to specific notifications in the Commonwealth of Australia Gazette. 12 Counsel for Ms Hart contended that the 'promotion process' construction adopted by Heerey J in Trewin was rejected by the Northern Territory Court of Appeal in Rivard v Northern Territory (1999) 129 NTR 1. That contention is not correct. The definition of 'injury' in the Work Health Act 1986 (NT) contained three heads of exclusion. Priestley J referred to the words of exclusion in the definition in s 4(1) of the Act and said (at 7): '21. … The Commonwealth Act thus has two exclusions and these are in substantially identical terms to two of the three NT Act exclusions. The presence of the third exclusion in the NT Act in my opinion has a significant bearing upon the construction of the presently relevant exclusion.' Accordingly the Court of Appeal held that the second exclusion in the NT Act, the failure to obtain promotion exclusion, was to be construed bearing in mind the third exclusion in that Act which, Priestley J said (at 8), was 'well adapted to include events in the promotion process'. 13 In my opinion, Comcare has made out the ground specified in paragraph 4.4(a) of its notice of appeal and on that basis is entitled to have the decision of the Tribunal set aside and the original decision of Comcare affirmed. It is unnecessary to deal with the other grounds of appeal. Here all the circumstances of Ms Hart's employment that contributed to her condition are covered by the exclusionary provision. 14 Comcare does not seek an order for costs of the appeal. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam