Hatfield and Comcare [2010] AATA 848 (1 November 2010)

DECISION AND REASONS FOR DECISION [2010] AATA 848

ADMINISTRATIVE APPEALS TRIBUNAL ) No 2010/0507

The decision under review, in which Comcare rejected liability to pay Mr Hatfield compensation under section 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) for 'adjustment reaction', is affirmed.

COMPENSATION - psychiatric injury - exclusion from liability if injury as a result of 'reasonable administrative action taken in a reasonable manner' - Applicant deployed on overseas posting - request for removal by host government - manner of removal - obligations under Vienna Convention on Consular Relations 1963 - procedural fairness - investigation into alleged breaches of Code of Conduct - decision under review affirmed

Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4, 5A(1),(2), 5B(1),(2), 7(4),14,

Comcare v Chenhall [1992] FCA 353; (1992) 37 FCR 75.

Re Kavanagh's Application [2003] HCA 76; (2003) 204 ALR 1

Keen v Workers Rehabilitation and Compensation Corporation [1998] SASC 7056; (1998) 71 SASR 42.

Minister for Immigration and Citizenship v SZIZO [2009] HCA 37

Re Gilbert and Comcare [2009] AATA 224

Re Georges and Telstra Corporation Ltd [2009] 731

Re Radulovic and Comcare [2010] AATA 777

Repatriation Commission v Webb (1987) 13 ALD 421

Re Reubinson and Comcare [2010] AATA 676

Ridge v Baldwin [1963] UKHL 2; [1964] AC 40

South Australia v Slipper (2004) 135 FCR 259.

1. Mr Peter Hatfield was employed by AusAID, initially as a permanent employee, and after the age of 55 he worked under short-term, renewable contracts. While in Nauru on an AusAID posting under a twelve month contract that was due to expire on 2 February 2009, Mr Hatfield suffered a psychological injury. He sought compensation from Comcare on 5 March 2009 for a condition he described as 'severe mixed anxiety and depression', which he claimed he first noticed on 7 January 2009.
2. On 9 September 2009, Comcare rejected the application for 'adjustment reaction' on the ground that the condition was not an 'injury' under the Safety, Rehabilitation and Compensation Act 1988 (Cth) ('Act'), since it found that the injury resulted from reasonable administrative action taken in a reasonable manner within section 5A(2) of the Act.
3. Comcare upheld that view in its reviewable decision dated 22 December 2009. Mr Hatfield appealed that decision to this Tribunal on 8 February 2010. The Tribunal heard the matter on 1 September 2010.

1. To be eligible, Mr Hatfield must establish that he is seeking compensation in accordance with the Act 'in respect of an injury suffered by an employee [which] results in ... incapacity for work, or impairment'.[1]
2. To be an 'employee' requires, as relevant, that the applicant be 'a person who is employed by the Commonwealth or by a Commonwealth authority'.[2]
3. 'Injury' is defined, as relevant, as a 'disease suffered by an employee'.[3] 'Disease' is further defined, as relevant, as an 'ailment suffered by an employee ... that was contributed to, to a significant degree, by the employee's employment by the Commonwealth'.[4] Finally, an 'ailment' means 'any ... mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development)',[5] and an 'impairment' means 'the .... damage or malfunction of any part of the body or of any bodily system or function'.[6]
4. However, to be a compensable 'injury' the claimed condition must not be 'a disease ... suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee's employment'.[7] 'Reasonable administrative action' is defined in section 5A(2) of the Act.[8]
5. An 'injury' is taken to be sustained on the deemed date of injury, namely, 'on the day when (a) the employee first sought medical treatment for the disease' or (b) the disease .... first resulted in the incapacity for work, or impairment of the employee'.[9]
6. The Vienna Convention on Consular Relations 1963 ('Vienna Convention') a treaty which Australia has ratified, defines the framework for consular relations between countries. The Convention provides in Article 23 that the ' persona non grata' and in that event '. Failure to act may mean that the receiving State refuses to recognise the person's functions at the mission, which in effect denies the person's right to remain in the country. The recall must be carried out '. In addition, Article 23(4) states that '.

2. Employees who are overseas because of circumstances attributable to their employment have a duty to act at all times in a manner which upholds the good reputation of Australia, and which contributes to the good reputation of AusAID and any Australian mission with which they are associated. The duty to uphold the good reputation of Australia is fundamental, and underlies the approach to particular principles of conduct overseas elaborated under the sub-headings below. ...

5.1 In general, the personal behaviour outside working hours of an employee overseas is of no concern of AusAID. However, an employee shall not engage in behaviour at any time which is likely to affect adversely the employee's ability to perform his or her duties, or the ability of his or her mission to achieve its objectives, or which is likely to bring the mission or Australia into disrepute. Employees should pay particular attention to ensure their behaviour meets the standards expected in that country. Where an employee is in any doubt as to the applicability of this principle, he or she should seek advice from a supervisor and, if necessary, AusAID, Canberra. ...

• Respect for Others and Tolerance of their Opinions

7.1. As in Australia, employees overseas have a duty to contribute to the effective functioning of the workplace by treating their colleagues and the public with respect. Even more than in Australia, this will require particular attention to the possibly very different cultural backgrounds, beliefs and opinions of the people encountered in the workplace and outside it. This principle is central to good relations with [overseas-based] and domestic staff, and is important to effective performance in all overseas environments.

1. Preliminary issues are:
   • whether Mr Hatfield suffered an 'injury' that was contributed to, to a significant degree, by his employment by AusAID;
   • what is the nature of the injury; and
   • what is the deemed date of the injury.
2. The principal issue, however, is:
   • whether the claimed injury arose 'as a result of reasonable administrative action taken in a reasonable manner' by AusAID during Mr Hatfield's employment on Nauru.

1. Mr Hatfield was formerly employed by AusAID. He was posted to Nauru as the First Secretary, Development Cooperation, from 3 February 2008 for one year on a non-ongoing contract. He was one of few Australian personnel on the island, employed by either AusAID or the Department of Foreign Affairs and Trade (DFAT). The expatriate community on Nauru was about 60 persons, and there were a limited number of hotels, restaurants or cafes and places for social or recreational occasions. The Hash House Harriers Group, a regular gathering for the expatriate community in Nauru, was one such social group that met each Tuesday.
2. Mr Hatfield's family had not initially joined him on the posting. However, when he was advised by AusAID in October 2008 that his contract would be extended until February 2010, he arranged for his family to join him in December 2008. His family also visited him in July 2008.
3. Mr Hatfield met Ms Uhjin Kim, a pharmacist in Nauru under the United Nations Volunteer (UNV) program, not long after his arrival in February 2008. They became friends when Ms Kim discovered that Mr Hatfield had adopted two children from her birth country. She said she saw him on two occasions: on 5 March 2008; and again on 9 March 2008 at a picnic. It is recorded that on each occasion he had tried to embrace her, and that Ms Kim made it clear she found his embraces uncomfortable. On 9 March 2008, she told Mr Hatfield firmly that she was not interested in him. Mr Hatfield confirmed that on 15 April 2008 Ms Kim warned him that if he persisted in trying to maintain contact with her as he had, for example, by email or in person, she would contact Mr George Fraser, the Australian Consul-General and Head of Mission in Nauru, as well as the Secretary of Health, Nauru, and AusAID and advise them of his behaviour.
4. Mr Fraser provided evidence to the Tribunal of a diary note that detailed a discussion he had with Mr Hatfield on 16 April 2008, which Mr Hatfield initiated. The note indicates that Mr Hatfield acknowledged that he had not been entirely proper in his relationship with Ms Kim, and that he had spent time with her on her own while he was drinking. In the note, Mr Fraser records that Mr Hatfield had 'made a pass at [Ms Kim]'. Mr Hatfield, however, at the hearing contested the veracity of this recorded comment to the Tribunal. Mr Fraser also noted that Mr Hatfield had apologised in writing to Ms Kim and agreed with Ms Kim's request not to contact her. Mr Fraser advised Mr Hatfield to abide by his agreement.

1. Dr Maria Cox, Mr Hatfield's general practitioner, provided a report dated 20 May 2009, and said he first consulted her on 9 February 2009 because he was depressed, had difficulty focusing and was sleeping poorly. He was seeing a work counsellor and took a week off work at that time. A depression rating scale administered on 9 February 2009 by Dr Cox showed significant levels of anxiety and depression, and Dr Cox prescribed an anti-depressant.
2. In a subsequent consultation on 5 March 2009, Dr Cox recorded Mr Hatfield's condition as being exacerbated when he attended an interview for the Code of Conduct investigation on 26 February 2009. Mr Hatfield said at the hearing that he was not able to focus effectively on work after that time. That was confirmed by Dr Cox at a consultation on 19 March 2009, when she noted that the subsequent reading by Mr Hatfield of the Record of Interview with the investigator had further exacerbated his condition. Mr Hatfield had also noted that in the period February to June 2009 he sought the assistance of a workplace psychologist on more than one occasion. Accordingly, Dr Cox increased the dosage of Mr Hatfield's anti-depressant.
3. At the consultation with Dr Cox on 6 April 2009, Mr Hatfield said he was feeling extremely anxious about the outcome of the investigation which he said had found 'a minor breach' of the APS Code of Conduct. Dr Cox, in her report to Comcare dated 20 May 2009, diagnosed major depressive episode which she said was 'a direct result of the response of his employer to the incident in Nauru'. However, Mr Hatfield also informed the Tribunal that he ceased taking his anti-depressant medication in September 2009.
4. In a report to Comcare dated 19 June 2009 of an assessment done that day, Dr Inglis Synnott, consultant psychiatrist, diagnosed an adjustment disorder. In his report he said Mr Hatfield's symptoms emerged in January 2009 and had continued. In his opinion, the symptoms were not permanent. In his view, the condition was related to Mr Hatfield's employment, specifically the circumstances surrounding his removal from Nauru, the subsequent Code of Conduct investigation, the potential loss of employment, and the reputational damage. Dr Synnott considered that Mr Hatfield was capable of returning to work, although he considered it prudent to include a graduated return to work program.

1. Mr George Fraser, then Australian Consul-General for Nauru, and Head of Mission for the Australian Government in Nauru, provided a written statement and gave evidence by telephone to the Tribunal. In his written statement, Mr Fraser listed the occasions towards the end of 2008 when, despite his warnings to Mr Hatfield in May 2008, repeated in July 2008, there were encounters between Ms Kim and Mr Hatfield. He acknowledged that Mr Hatfield did not always speak to Ms Kim on these occasions.
2. Mr Fraser said that in response to these complaints, Mr Hatfield had explained that as he did not know whether Ms Kim would be at particular functions, he was unable on occasion to avoid seeing her.
3. In response to a claim by Mr Hatfield that, in order for the decision to remove him from Nauru be reasonable he should have been offered a right of reply prior to his removal, Mr Fraser said he was following DFAT procedures in circumstances when removal of mission personnel is sought by a host government. However, in a subsequent email dated 12 June 2009, the Director of the Staffing Operation Section at DFAT denied such procedures existed. However, the Director did say that:

In principle should we receive a request from a host government to withdraw an employee we would aim to do so as quickly as possible. Depending on the reasons for the withdrawal we would seek to be as sympathetic as possible in our handling of the employee.

1. In an email to Mr Hatfield dated 9 April 2009, Mr Fraser confirmed that AusAID had not sought his views on whether there was a risk to the safety of Mr Hatfield or his family, but had his views been sought he would have denied there was any such risk.

1. Mr Christopher Layt, Director of Human Resources Services at AusAID provided a statement dated 20 May 2010 that outlined the steps he had taken in having Mr Hatfield removed from Nauru. Mr Layt confirmed that, even if AusAID did not understand the reason for the Government of Nauru's request to remove Mr Hatfield, or thought an allegation might be fraudulent, AusAID could have raised this with DFAT or the relevant Minister, but Mr Hatfield would still have been removed as requested. He noted that, although Mr Hatfield had denied the sexual harassment allegation, 'AusAID could not reasonably rely on the denial of allegations as an accurate version of events'. He had also said that, in any event, AusAID had no reason to believe the allegations were made fraudulently.
2. In a supplementary statement dated 27 August 2010, Mr Layt detailed the timelines for the events in January 2009. As part of that history, he noted that when he telephoned Mr Hatfield on 7 January 2009, Mr Hatfield had asked whether he would be able to return to Nauru if he was found not to have breached the Code of Conduct. Mr Layt told him that this would depend on the Government of Nauru approving his return. He also said that once a request for removal had been received, AusAID had no discretion and had to comply with the request.

1. At the outset, the Tribunal made it clear to Mr Hatfield that the focus of these proceedings was not to reconsider the findings of the investigation, nor was it in a position to go behind the investigator's report as to what happened in Nauru prior to Mr Hatfield's departure. The purpose of these proceedings was to assess whether Mr Hatfield was entitled to compensation for a condition he claimed was work-related. For that reason, much of the material referred to by Mr Hatfield in his reports in the Tribunal documents has not been considered.
2. It was common ground at the hearing that Mr Hatfield was an 'employee',[10] being employed on contract by AusAID; and that he suffered from an 'ailment',[11] namely, depression, whether that condition was described as an adjustment disorder, or a major depressive illness, single episode. Nothing turns on the diagnosis. In turn, that ailment was a 'disease',[12] which also means Mr Hatfield had suffered an 'injury'.[13] Both parties also accepted that Mr Hatfield's employment had contributed to his condition to a significant degree.[14]
3. It was also common ground that the date of injury was deemed to be 7 January 2009. That was the date on which Mr Hatfield was informed of Ms Kim's formal complaint and was advised he was to be removed from Nauru. Mr Hatfield said these events made a dramatic change to his circumstances, including the loss of his posting to Nauru, with its promised extension for twelve months to February 2010.
4. As a consequence, he said he first experienced the symptoms which were an impairment and which incapacitated him for work - emotional distress, anxiety, difficulty to concentrate and focus, sleep disturbance, anger, impatience - and which were the indicators that he was suffering from his depressive condition. Dr Synnott reported Mr Hatfield as saying that he consulted an AusAID counsellor by telephone on 7 January 2009 and a psychologist several days later, and he was prescribed anti-depressant medication by Dr Cox on 9 February 2009.
5. The Tribunal is satisfied, on the evidence, and in light of the relevant provisions of the Act, that these concessions were properly made.

Whether an 'administrative action' is 'reasonable'

1. Reasonableness is a chameleon-like concept, tailored to the circumstances. As a minimum, to be reasonable the action must be lawful.[18] In addition, for 'administrative action' to be reasonable, it must be established that there was nothing 'untoward' about the actions involved.[19] The actions must also not be 'irrational, absurd or ridiculous'.[20]
2. The question of whether 'administrative action' is taken 'in a reasonable manner' is a question of fact and must be considered on an objective basis. Matters that should be taken into account in that consideration include the circumstances leading to and flowing from any relevant administrative action, the particular circumstances of the individual known to the employer or which could have been discovered by simple inquiry, and any relevant corporate policy framework within which the actions took place.[21] These principles will be applied to the circumstances involved in this case.

1. Mr Fraser was notified informally by the Foreign Minister of Nauru on the afternoon of 6 January 2009 that Ms Kim had made a complaint about Mr Hatfield's conduct and that as a consequence the Government of Nauru would formally be requesting that Mr Hatfield be removed. Mr Fraser notified both DFAT and AusAID of this communication the same evening.
2. The formal request for Mr Hatfield's removal was received by Mr Fraser from the Nauru Foreign Minister on the morning of 7 January 2009. The Memorandum also requested that Mr Hatfield's conduct be investigated once he returned to Australia.
3. Later that morning, Mr Fraser informed Mr Hatfield of the request and that AusAID would be in contact with him about arrangements for his departure. This information was followed by a call to Mr Hatfield from AusAID when he was advised that an APS Code of Conduct inquiry would be undertaken on his return, but that he would continue to be employed by AusAID for the duration of the inquiry. He was also advised that it was expected he would take leave for a period before resuming work on the Nauru desk in Canberra. Mr Hatfield and his family departed Nauru on the morning of 9 January 2009.
4. Mr Fraser's decision to act on the request of the Government of Nauru was made in accordance with Article 23 of the Vienna Convention, to which Australia is a ratifying party.
5. To comply with the Convention is, therefore, not unlawful, since it is an instrument which is given legal status in domestic law.[23]
6. Although DFAT confirmed there were no formal procedures for requests for removal, the DFAT representative did indicate that should such a request be made, 'in principle' DFAT would aim to remove the person as quickly as possible while being conscious of the need to be sympathetic to the person involved. That response recognises that the practical consequence of a consular officer being declared persona non gratis is that unless the officer is removed by the sending government, the person's right to remain in the country can be denied by the host government. That means, in effect, that the sending government has no choice in such a matter. In those circumstances, Mr Fraser's decision to set in motion processes for Mr Hatfield's prompt removal and for an investigation into his conduct was not untoward, nor was it irrational, absurd or ridiculous. The action was, accordingly, reasonable.

Investigation into the alleged breach of the APS Code of Conduct and the AusAID Code of Conduct for Overseas Service

1. AusAID in its conversation with Mr Hatfield on 7 January 2009 informed him that an investigation into the complaint would be undertaken on his return to Australia. In the circumstances of the request from the Government of Nauru that there be an investigation into the complaint, the Australian Government, through AusAID, had little discretion about conducting an investigation. Although Mr Layt confirmed that if AusAID had not understood the reason for the request for an investigation or considered that the request was made fraudulently, it could have raised this with DFAT or the Minister for Foreign Affairs, since neither of those circumstances applied, and since undertaking the investigation could avoid damaging the bilateral relationship between the governments of Australia and Nauru, compliance with the request was not unreasonable.
2. That means it is the manner of conducting the investigation which is the prime focus for the Tribunal. Mr Hatfield was told on 7 January 2009 that his conduct would be investigated for any breach of the APS Code of Conduct. The external consultant for the investigation was confirmed on 8 January 2009 and Mr Hatfield was so informed on 12 January 2009. On 13 January 2009, he was advised of the processes involved in the investigation. These actions were taken in an appropriately prompt manner, choice of an external investigator provided appropriate independence for the investigation process, and the advice about the procedure avoided Mr Hatfield being disadvantaged by any lack of understanding of what was to occur.
3. Mr Hatfield was also advised on 12 January that he would continue to be employed until the investigation process was complete, thus assuring him of a continuing position and that no pre-judgment had been made about the outcome. Since AusAID had the option of terminating his contract forthwith on receipt of the request for his removal but chose not to do so, that step was a suitably sympathetic approach to the handling of the investigation process.
4. In terms of the procedure for the investigation, Mr Hatfield was informed on 13 January that he would be asked to nominate people for the investigator to interview, thus giving him an opportunity to suggest persons who could give an objective account or indeed a supportive account of the events in Nauru. He was also reminded of the support services for employees which were available within AusAID. On 28 January 2009, the investigator also wrote to Mr Hatfield formally advising him of the process, seeking a submission from him, and affirming that he could nominate persons to be interviewed by the investigator.

1. The advice to Mr Hatfield that he was unlikely to be returned to Nauru, and the impact on his future postings, can both be classified as a 'failure to retain a benefit'.[26] As a contractor, he had no right to continue to be employed. However, it was clear that until the events in early 2009, AusAID had been happy with his performance. That was indicated by the publication within AusAID of the proposed extension of his posting on Nauru for a further twelve months to February 2010.
2. His summary removal from Nauru was to change that arrangement. That was a disappointment for Mr Hatfield, since he had enjoyed his overseas posting with AusAID and he was concerned that an adverse finding would mean no further postings. In his conversation with Mr Layt on 7 January 2009, Mr Hatfield had asked whether, should he be cleared in the investigation, he would be able to return to Nauru. Mr Layt's response was that this would depend on the Government of Nauru approving his return. That was the reality. Further, Mr Fraser emailed Mr Hatfield on 10 February 2009 to report that he had seen the Nauru Foreign Minister and asked him his view about Mr Hatfield's return, which 'wasn't positive', although it was only the Foreign Minister's personal view. This supports the earlier comment by Mr Layt.
3. The responses indicate that any 'failure to retain' the benefit of his position on Nauru was not solely a matter for AusAID or the Australian Government. So even if Mr Hatfield had been cleared of any misconduct, it would not solely have been Australian management action which would have denied him the benefit had a request for a further posting in Nauru been denied. In these hypothetical circumstances, the potential administrative action would not have been covered by the exclusionary provisions in section 5A(1), (2).
4. The same is not true of his failure to retain the benefit of other postings with AusAID. The only evidence on this issue was Mr Hatfield's comment in his 'Request for Reconsideration of Comcare decision' that Mr Layt had 'indicated that if I was successful in obtaining a permanent position in AusAID for which I had recently been interviewed, that I would be able to apply without prejudice for other postings' and an email copied to Mr Hatfield from the Manager, Ethics & Welfare Unit, AusAID which stated that Mr Hatfield's contract finished on 20 April 2009 '.

I certify that the 94 preceding paragraphs are a true copy of the reasons for the decision herein of Professor RM Creyke, Senior Member.

Signed: ..................[sgd]...............................

[11] Act, s 4(1) - definition of 'ailment'.

[16] Re Radulovic and Comcare [2010] AATA 777, para 74.

[18] Comcare v Chenhall [1992] FCA 353; (1992) 37 FCR 75.

[19] Re Gilbert and Comcare [2009] AATA 224, para 33 (DP Hack).

[20] Repatriation Commission v Webb (1987) 13 ALD 421, 421 (Beaumont J).

[21] Re Georges and Telstra Corporation Ltd [2009] 731, para 33; Re Reubinson and Comcare [2010] AATA 676; Keen v Workers Rehabilitation and Compensation Corporation [1998] SASC 7056; (1998) 71 SASR 42.

22 Id, 44-5.

[23] For a useful summary of the status of international law in Australia domestic institutions see Kirby J in Re Kavanagh's Application [2003] HCA 76; (2003) 204 ALR 1.

[24] Ridge v Baldwin [1963] UKHL 2; [1964] AC 40; South Australia v Slipper [2004] FCAFC 164; (2004) 136 FCR 259.

[25] Minister for Immigration and Citizenship v SZIZO [2009] HCA 37; (2009) 238 CLR 627, para 35.