Consideration
38 In view of their central importance in the appeal, it is convenient to set out both s 43(2) and (2B) of the AAT Act.
43 Tribunal's decision on review
…
(2) Subject to this section and to sections 35 and 36D, the Tribunal shall give reasons either orally or in writing for its decision.
…
(2B) Where the Tribunal gives in writing the reasons for its decision, 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.
…
39 The former provision obliges the AAT to give reasons either orally or in writing for its decision, unless either ss 35 or 36D apply. Section 43(2B) then clarifies that, where the AAT gives its reasons for decision in writing, those reasons must include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based. Significantly, that obligation does not oblige the AAT to include findings on non-material questions of fact nor is it obliged to refer to the evidence or other material in respect of any of its findings other than those on material questions of fact.
40 In determining whether the AAT has complied with these obligations, it is relevant to take into account case law which has clarified their nature and scope. First, it is insufficient merely to point to other reasons, findings or references that may have been made by some other decision-maker. As Robertson J observed in Lawrence Smith v Comcare [2014] FCA 811 (Smith) at [90]:
… Of course it is the Tribunal's actual reasons which need to be given rather than the reasons which a party thinks the reasons should have been: Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 at [1], [34], [68] and [217]; see also the reference to the actual path of reasoning in Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; (2013) 303 ALR 64 at [55]. That the reasons may show an error is not a criticism of the reasons themselves.
41 Although Robertson J's decision was appealed (see Smith v Comcare [2015] FCAFC 24), these particular observations were not challenged and I respectfully agree with them.
42 Secondly, in Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184; (2003) 75 ALD 630 (WAEE), French, Sackville and Hely JJ stated at [47]:
… it may be that it is unnecessary to make a finding on a particular matter because it is subsumed in findings of greater generality, or because there is a factual premise upon which a contention rests which has been rejected.
The observations of Robertson J in Smith and also those of the Full Court in WAEE were cited approvingly and applied by Jagot J in Munswamy v Australian Postal Corporation [2015] FCA 678 at [55]. I consider that they are equally applicable here.
43 Thirdly, in determining whether there has been compliance with s 43(2) and (2B) of the AAT Act, it is well to bear in mind the primary functions underlying the requirement of an administrative tribunal such as the AAT to give reasons for its decisions. Two of the central purposes for which reasons are required to be given are first, to assist the parties to understand the result; and secondly, to enable an aggrieved party to consider whether to take advantage of any right of appeal or review (see Military Rehabilitation and Compensation Commission v SRGGG [2005] FCA 342; (2005) 215 ALR 459 at [82] per Madgwick J). See also the relevant observations of Flick J in Australian Postal Corporation v Hughes [2009] FCA 1057; (2009) 50 AAR 267 at [12] regarding the importance of a decision-maker's reasons in having an appeals process operate effectively.
44 Fourthly, helpful guidance as to the nature and scope of the AAT's obligations to give reasons is to be obtained from the High Court's decision in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323, where McHugh, Gummow and Hayne JJ made the following pertinent comments at [67] and [68] regarding the substantially similar obligation of the Refugee Review Tribunal (see s 430 of the Migration Act 1958 (Cth)) to set out "the reasons for the decision" (footnotes omitted):
Section 430(1) of the Act obliged the Tribunal to prepare a written statement that does four things:
"(a) sets out the decision of the Tribunal on the review; and
(b) sets out the reasons for the decision; and
(c) sets out the findings on any material questions of fact; and
(d) refers to the evidence or any other material on which the findings of fact were based."
As was rightly observed in the joint judgment in Singh, this section calls for a recording of matters that are matters of fact. In particular, s 430(1)(c) requires the Tribunal to set out the findings of fact which it made. But does it require more? Does it oblige the Tribunal to make findings on any and every matter of fact objectively material to the decision which it was required to make?
Section 430 does not expressly impose such an obligation. In its terms, it requires no more than that the Tribunal set out the findings which it did make. Neither expressly nor impliedly does this section require the Tribunal to make, and then set out, some findings additional to those which it actually made. In Singh, significance was attached to the use of the word "material" in s 430(1)(c). It was said that "material" in the expression "material questions of fact" must mean "objectively material". Even if that were right, it would by no means follow that the Tribunal was bound to set out findings that it did not make. But it is not right to read "material" as providing an objective or external standard of materiality. A requirement to set out findings and reasons focuses upon the subjective thought processes of the decision-maker. All that s 430(1)(c) obliges the Tribunal to do is set out its findings on those questions of fact which it considered to be material to the decision which it made and to the reasons it had for reaching that decision.
45 Applying those principles and that guidance here, I reject the applicant's contention that the AAT failed to discharge its statutory obligations.
46 The AAT correctly recognised that the central issue for determination was whether the expert medical evidence of Dr Parsonage should be preferred to that of Dr Smith. In assessing how the AAT dealt with that issue, its reasons for decision need to be read as a whole. As noted above, the AAT summarised Dr Parsonage's written and oral evidence which supported his opinion that the applicant continued to suffer from adjustment disorder as at 11 July 2013. The AAT then summarised the competing view expressed by Dr Smith. It may be accepted that those summaries were brief but the applicant did not complain that the summaries in [11] to [13] were inaccurate in any material particular. I am satisfied that the summaries, albeit brief, accurately reflect the competing medical opinions.
47 Ground 1 alleges that the AAT failed to give sufficient reasons because its reasons for decision did not disclose that there was any proper consideration or analysis of the medical evidence of the parties. I disagree. The applicant criticised the AAT's statement in [16] that the opinions of both Dr Smith and Dr Shaw were that "the effects of the Adjustment Disorder had dissipated by 11 July 2013 and were supplanted by the effects of the applicant's personality traits and fixed attitudes", on the basis that while that statement reflected Dr Smith's opinion, Dr Shaw did not state that the applicant's personality traits and fixed attitudes supplanted his earlier adjustment disorder. However, any such error on the part of the AAT is an error of fact, not of law. The critical point was that Dr Shaw said in both her reports dated 15 February 2013 and 9 September 2013 that the applicant's reported symptoms had been resolved and, accordingly, he did not meet the diagnostic criteria for a psychological disorder according to DSM-IV as at the date of the assessment the subject of those reports. The applicant did not contend that his personality traits and fixed attitudes themselves constituted an "injury" or "disease" for the purposes of the SRC Act.
48 The AAT explained in the final sentence of [16] of its reasons why it preferred the opinions of Drs Smith and Shaw. It made express reference to three factors, namely the long history of the applicant's inability to adapt to change, the extension of his anxieties beyond one particular superior manager to include a broader range of managers (including the Area Manager and State Manager, as referred to in [9] of the reasons for decision) and the difficulty of implementing any program of return to work. The applicant did not suggest that these matters were without a proper evidentiary foundation. It was reasonably open to the AAT to make those findings on the basis of the material before it and they provide a sufficient explanation as to why the AAT preferred Dr Smith's opinion.
49 The applicant sought to make good his complaint that the AAT's reasons for decision were legally inadequate because the AAT did not in its reasons deal with various matters which, he said, undermined Dr Smith's evidence. Those matters included the cross-examination of Dr Smith concerning the use he made of Dr Hayward's notes of various consultations he had with the applicant as his treating general practitioner, particularly during the period February to September 2013. There was no legal obligation on the AAT to address that evidence in its reasons for decision. It is evident from the relevant pages of the AAT transcript that Dr Smith did not dispute what the applicant told Dr Hayward but Dr Smith considered that this information did not justify a diagnosis of adjustment disorder. The AAT was plainly aware of Dr Hayward's notes, as passing reference was made to them in [14] of the reasons for decision.
50 The applicant also contended that the AAT should have taken into account Dr Smith's erroneous belief that the DSM-IV contained two cumulative requirements, which he only corrected in cross-examination. In fact the correction occurred during Dr Smith's oral evidence in chief. In any event, Dr Smith having corrected his earlier evidence, there was no legal obligation on the AAT to say anything about it in its reasons for decision. It was a matter for the AAT to assess the weight it gave to Dr Smith's evidence.
51 Nor was there any legal obligation upon the AAT to explain in its reasons for decision why it did not adhere to observations which were made by it during the course of the hearing, such as those set out in [34] above. It is not unusual in the course of such a hearing for the Tribunal member to raise preliminary comments and observations as part of the ongoing deliberative process. That does not mean, however, that such remarks are to be characterised as reasons or, indeed, findings of material fact, so as to attract the obligations in s 43(2) and (2B) of the AAT Act. Observations or comments of the sort set out in [34] above are frequently modified or even abandoned when the task of producing reasons for the final decision arises, as Flick J observed in WZAQU v Minister for Immigration and Citizenship [2013] FCA 327 (WZAQU) at [30].
52 As noted above, in support of its appeal, the applicant placed particular emphasis on the apparent inconsistency between certain remarks made by the AAT in the course of the hearing and its decision to prefer Dr Smith's evidence to Dr Parsonage's. Considerable caution must be exercised in using a transcript for the purpose advanced by the applicant here. In WZAQU at [30] Flick J made the following obiter observations regarding the limited significance of the transcript in construing the reasons for an administrative decision:
Whether or not the transcript of the interview may be taken into account when construing the reasons for the recommendation of the Independent Protection Assessor may be left unresolved. A transcript of proceedings may unquestionably be relied upon to prove that claims were in fact advanced and to prove the nature and ambit of those claims. Reference to the transcript of November 2011 could thus be made to give content to the claims advanced by the Appellant, although the nature of those claims is in any event largely made apparent from paragraphs [40] to [42] of the reasons for decision. But considerable reservation is expressed as to whether reference to the transcript may also be made for the purpose of construing what was intended to be conveyed by paragraph [98]. It has been concluded by the High Court that the transcript of a proceeding forms no part of the "record" when seeking certiorari to correct error of law on the face of the record: Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 180-181 per Brennan, Deane, Toohey, Gaudron and McHugh JJ. Whether the same considerations which led to that conclusion are apposite to considering whether a transcript can be relied upon to construe reasons for an administrative decision can also be left unresolved. But that which is common to both is a concern as to whether recourse to a transcript would only encourage parties seeking to impugn or support (or supplement) a statement of reasons by scouring the transcript with a view to minutely discerning differences between the transcript and reasons. To do so may only encourage impermissible reliance upon thoughts or queries raised during the course of a hearing which are only later abandoned at that stage when reasons are being prepared. Even if recourse is made to the transcript in the present proceeding, that transcript provides no assistance - not surprisingly - in construing what was intended to be conveyed by paragraph [98].
53 I respectfully agree with those observations and consider that they have particular application here. In the circumstances here, the reasons given by the AAT for its decision, including its preference for Dr Smith's evidence over that of Dr Parsonage, must be the central focus in the appeal. As Flick J commented, parties should not be encouraged to pour over the transcript with a view to identifying differences between the transcript and reasons. The reality often is that a member of a tribunal (and, for that matter, a court) may make observations or raise issues for comment during the course of the hearing not in any concluded fashion but rather to test a tentative proposition which may later not crystallise in the decision-maker's ultimate decision, including in the reasons for that decision.
54 Ground 1 is a thinly veiled attempt to have the Court conduct an impermissible review of the merits of the AAT's decision to prefer Dr Smith's evidence to that of Dr Parsonage. Having regard to the central issue in the AAT, namely whether or not the applicant was suffering from an injury or disease as at 11 July 2013, I consider that the AAT's summary and discussion of the competing medical opinions satisfied the statutory obligations in s 43(2) and (2B). I accept the respondent's submission that the reference in ground 1 to "proper consideration or analysis" is telling because it essentially invites a consideration or analysis with which the applicant would agree.
55 As the Full Court observed in Tarrant v Australian Securities and Investments Commission [2015] FCAFC 8; (2015) 317 ALR 328 at [100(g)] (duplicate citations omitted):
…the weighing and evaluation of various pieces of evidence is a matter for the AAT and is generally not susceptible to review in either judicial review proceedings for jurisdictional error (see Abebe v Commonwealth of Australia (1999) 197 CLR 510 at [197] per Gummow and Hayne JJ and Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164; [2010] HCA 48 at [33] (SZJSS) per French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ), or in an 'appeal' under s 44 of the AAT Act (see Brown v Repatriation Commission [2006] FCA 914 at [7] per Branson J and Fisse v Secretary, Department of the Treasury (2008) 172 FCR 513; [2008] FCAFC 188 at [152] per Flick J). As the Full Court (Fox, Deane and Morling JJ) observed in Collins v Minister for Immigration and Ethnic Affairs (1981) 58 FLR 407 at 410-411 in the context of an appeal under s 44 of the AAT Act and in response to a claim that a Tribunal decision was against the evidence or the weight of the evidence (emphasis added):
A number of authorities was cited by counsel for the appellant in support of the propositions that the making of a decision against the evidence or the weight of the evidence and the making of an unreasonable decision are errors of law. We find it unnecessary to examine these authorities for the reason that, in our opinion, there is no factual basis to found those propositions. We would, however, comment that the concepts of a decision being against the evidence and of being against the weight of the evidence belong to appeals from courts of law and have particular application to jury verdicts. Even in that context, they did not involve questions of law. They certainly have no place when the appeal, or review, is of proceedings of an administrative tribunal which is not bound by the rules of evidence, subject to their obligation to observe the requirements of natural justice, can inform itself as it chooses (see, s 33(1)(c) of the Administrative Appeals Tribunal Act 1975.) An appellant who attacks a conclusion of the Tribunal because of deficiency of proof said to amount to error of law must show, if he is to succeed, that there was no material before the Tribunal upon which the conclusion could properly be based…
56 Nor do I accept that the AAT's reasoning is illogical (ground 3) or its decision to prefer Dr Smith's evidence to that of Dr Parsonage to be unreasonable in the legal sense of that term (ground 4). As Crennan and Bell JJ held in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611 (SZMDS) at [131]:
… the test for illogicality or irrationality must be to ask whether logical or rational or reasonable minds might adopt different reasoning or might differ in any decision or finding to be made on evidence upon which the decision is based. If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion.
57 Although these observations were directed to the head of the judicial review relating to illogicality, they are also relevant where an error of law based on illogical reasoning is raised in a s 44 AAT Act appeal, as here. The AAT was faced with competing expert medical opinions on the central issue. Both Dr Parsonage and Dr Smith were cross-examined and the AAT was afforded an opportunity to assess the cogency of both their opinions. The AAT also had before it written evidence from, amongst others, Dr Shaw and Mr Campbell. Which of the competing evidence was to be preferred was a matter for the AAT in the exercise of its fact-finding function. There is no illogicality in the AAT preferring the evidence of Dr Smith and Dr Shaw, which was to the effect that the applicant's previous adjustment disorder had ceased by 11 July 2013.
58 Similar considerations apply in rejecting the applicant's complaint of unreasonableness. Li is the leading current High Court authority on that ground of review, at least in a judicial review context. For the applicant to establish that the AAT's decision to prefer the medical opinion of Dr Smith over that of Dr Parsonage is unreasonable in the legal sense of that term, it is insufficient to demonstrate that another decision-maker may have come to a different conclusion. Rather, in the circumstances here, the applicant needed to demonstrate that the AAT's preference was arbitrary, capricious or devoid of common sense (Li at [28] per French CJ) or that it lacked "an evident and intelligible justification" (Li at [76] per Hayne, Kiefel and Bell JJ). The AAT's preference for the views of Dr Smith (and Dr Shaw) over that of Dr Parsonage may be one upon which reasonable minds could differ but it is not irrational or unreasonable to prefer one opinion over another (see SZMDS at [78] per Heydon J and at [121]-[131] per Crennan and Bell JJ). As French CJ observed in Li at [30] (citations omitted):
The requirement of reasonableness is not a vehicle for challenging a decision on the basis that the decision-maker has given insufficient or excessive consideration to some matters or has made an evaluative judgment with which a court disagrees even though that judgment is rationally open to the decision-maker. Gleeson CJ and McHugh J made the point in Eshetu that the characterisation of somebody's reasoning as illogical or unreasonable, as an emphatic way of expressing disagreement with it, "may have no particular legal consequence."
59 Different considerations arise where an administrative decision-maker has given reasons for a decision and there is a claim of unreasonableness. As the Full Court observed in Minister for Immigration and Border Protection v Singh [2014] FCAFC 1; (2014) 308 ALR 280 (Singh) at [47]:
This question highlights the distinctions made between reasonableness review which concentrates on the outcome of the exercise of power, and reasonableness review which concentrates on an examination of the reasoning process by which the decision-maker arrived at the exercise of power. Although it is not necessary for the purposes of this appeal to resolve the question whether those should be seen as two different kinds of review and what might flow from that, we are inclined to the opinion that, where there are reasons for the exercise of a power, it is those reasons to which a supervising court should look in order to understand why the power was exercised as it was. The "intelligible justification" must lie within the reasons the decision-maker gave for the exercise of the power - at least, when a discretionary power is involved. That is because it is the decision-maker in whom parliament has reposed the choice, and it is the explanation given by the decision-maker for why the choice was made as it was which should inform review by a supervising court. It is not, as in House v R (1936) 55 CLR 499, on an appeal from an exercise of a judicial discretion, for the court to re-exercise the discretion. If a supervising court goes outside the reasons given by a decision-maker for another justification for the exercise of power, that court might then be seen to be placing itself in the position of the repository of the power and therefore acting impermissibly. Where there are reasons, either the reasons given by the decision-maker demonstrate a justification or they do not. It would, we think, be a rare case where the reasons demonstrate a justification but the ultimate exercise of the power would be seen to be legally unreasonable.
60 Decisions such as Li, SZMDS and Singh all emphasise the need for judicial self-restraint in applying heads of judicial review concerning illogicality and unreasonableness. Such restraint is related to the legitimacy of judicial review and the need to ensure that it is confined to its proper province. Similar constraints arise in the context of a s 44 AAT Act appeal where an applicant raises errors of law based on illogicality or unreasonableness. The following observations of the Full Court in Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 322 ALR 254 at [194] are apposite:
We restate that the subject matter of an appeal under s 44 is a question or questions of law. We also restate that the appeal is not by way of rehearing; it is the exercise of original jurisdiction. Neither is it sufficient that the appeal merely involves a question of law. The correct approach, in our opinion, is to ask directly the question whether the appeal is on a question of law, without being diverted by whether or not the appeal raises a mixed question of fact and law. As the High Court said in Owens, the purpose of limiting an appeal to a question of law is to ensure that the merits of the case are dealt with not by the Federal Court but by the tribunal. This distribution of function is critical to the correct operation of the administrative review process. See also O'Brien at CLR 430; ALR 125 where Gibbs CJ, Wilson and Dawson JJ said that on an appeal under s 44 the appellate body should not usurp the fact-finding function of the tribunal. But such fact-finding is an entirely different exercise from the evaluation of the fact-finding process of the tribunal (as fact-finder) to decide upon its legality.
61 The AAT's preference for Dr Smith's opinion over that of Dr Parsonage is neither illogical nor unreasonable. The AAT provided an adequate explanation for that preference. It is also to be noted that Dr Smith's opinion was supported not only by Dr Shaw but also by Mr Campbell (although the AAT proceeded on the basis that Dr Parsonage and Mr Campbell both held an opposing view, that is incorrect - however, that error of fact is immaterial). On the material before it, it was reasonably open to the AAT to make the findings which it did concerning the competing medical opinions.