Lim v Comcare

Relevant legislation 16 Pursuant to s 14(1) of the Compensation Act, Comcare is liable to pay compensation in respect of an "injury" (as defined in s 5A: see the definition of "injury" in s 4(1)) suffered by an employee if that injury results in incapacity for work. 17 Section 5A(1) of the Compensation Act provides as follows: (1) In this Act: 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. (2) For the purposes of subsection (1) and without limiting that subsection, reasonable administrative action is taken to include the following: (a) a reasonable appraisal of the employee's performance; (b) a reasonable counselling action (whether formal or informal) taken in respect of the employee's employment; (c) a reasonable suspension action in respect of the employee's employment; (d) a reasonable disciplinary action (whether formal or informal) taken in respect of the employee's employment; (e) anything reasonable done in connection with an action mentioned in paragraph (a), (b), (c) or (d); (f) anything reasonable done in connection with the employee's failure to obtain a promotion, reclassification, transfer or benefit, or to retain a benefit, in connection with his or her employment. (Emphasis added) 18 As indicated already, our focus in these reasons is on the exclusion in the definition of injury in s 5A(1). The exclusion is underlined above. 19 As Comcare v Martin highlights, s 5B of the Compensation Act is also important in a case like the present. For present purposes, it is sufficient to refer only to ss 5B(1) and (3), which state: (1) In this Act: disease means: (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. ... (3) In this Act: significant degree means a degree that is substantially more than material. 20 "Ailment" is defined in s 4(1) to mean "any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development)". "Aggravation" is defined in the same provision to include "acceleration or recurrence". 21 We preface our discussion of the authorities by noting that before the Tribunal Comcare did not dispute that Dr Lim's adjustment disorder was a disease (as defined in s 5B), being a disease that was contributed to, to a significant degree, by Dr Lim's employment by ACMA.

Previous decisions of Full Courts of this Court 22 It is clear that the High Court in Comcare v Martin has not sought to formulate a new test for the application of the exclusion in a case to which s 5B applies. Rather, the High Court in Comcare v Martin has spelt out more fully than earlier authorities the elements of the question to which the exclusion in s 5A, read with s 5B, gives rise. The effect is to highlight an aspect of the statutory question that the Tribunal in this case did not address. 23 For present purposes, it is sufficient to refer to four decisions of this Court to identify what was previously said about the causal standard in the exclusion in a case to which s 5B (or its predecessor) applied. These decisions are Hart v Comcare [2005] FCAFC 16; 145 FCR 29 (Hart v Comcare), Commonwealth Bank of Australia v Reeve [2012] FCAFC 21; 199 FCR 463 (CBA v Reeve), Drenth v Comcare [2012] FCAFC 86; 128 ALD 1 (Drenth v Comcare) and Martin v Comcare [2015] FCAFC 169; 238 FCR 373 (Martin v Comcare FFC).

Hart v Comcare 24 The Tribunal, in the case of Ms Hart, decided that Comcare was liable to pay compensation to her under s 14(1) of the Compensation Act for an adjustment disorder arising when she was employed by the Department of Defence. At the relevant time, s 4(1) of the Compensation Act included a definition of "injury" not unlike that in the current s 5A(1), excluding any injury "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" (emphasis added). When the matter reached a Full Court of this Court, Branson, Conti and Allsop JJ were called on to determine whether or not Ms Hart's adjustment disorder was an "injury" within the definition of "injury" in s 4(1), and in particular, whether the disorder, though otherwise within the definition, was suffered "as a result of" her failure to obtain a promotion. This question arose in circumstances where the Tribunal had identified "two concurrent causes" of the disorder, first, a failure to obtain promotion, which was excluded by s 4(1); and, second, events connected with the process of promotion, which were not excluded by s 4(1): Hart v Comcare at [11]. The Full Court held that the disorder, though otherwise satisfying the definition of injury, was not an injury as defined in s 4(1) because the disorder had been suffered as a result of a failure to obtain a promotion. The Court stated (at [20]-[23]): The task is one of statutory construction. This is a beneficial statute. Nevertheless, conformably with that, it is necessary to construe the words used by the Parliament. The so-called proviso in the definition does not exclude causes. It provides that if a disease o[r] injury which would otherwise fall within the definition ("any such") is one which answers a description (relevantly here: "suffered as a result of … the failure to obtain a promotion"), the disease or injury is not an "injury" as defined. The words are satisfied here. There was no debate that the factual findings made by the Tribunal amount to a conclusion that the disease or injury suffered was as a result of the failure to obtain the promotions. ... The operation of the provision had the evident purpose of removing from the field of compensation a disease, injury or aggravation which was a result of something. We see no evident purpose to remove from the field of compensation a disease, injury or aggravation which was only a result of that thing. The words do not readily admit that construction. The cases on multiple causes in tort or general law do not assist that enquiry. It will in any case be for the Tribunal to examine the facts, assess the reasons for the disease, injury or aggravation and come to conclusions in respect thereof. Whether in any given case, those findings allow a conclusion that the condition was suffered as a result of one or more of the matters referred to in the proviso, may be a factual question, or perhaps a legal question. Here, however, the findings were clear. The failure to obtain the promotions materially contributed to the condition and there is no issue but that the condition was suffered as a result of the failure to obtain the promotion. (Emphasis added) The High Court (Gleeson CJ and Gummow J) subsequently dismissed an application for special leave to appeal. 25 As the Full Court made clear in these passages, its remarks must be read in light of the Tribunal's findings of fact in Ms Hart's case that there were two concurrent employment-related causes of her injury; that the failure to obtain promotion materially contributed to Ms Hart's psychological condition; and that condition was suffered as a result of her failure to obtain the promotion. It was sufficient, so the Full Court held, that, in these circumstances, one of two concurrent causes - the failure to obtain promotion - fell within the exclusion.

CBA v Reeve 26 Some years later the Full Court in CBA v Reeve apparently sought to adopt the same approach in applying the exclusion in s 5A(1) (replicating the earlier version of the exclusion considered in Hart v Comcare: CBA v Reeve at [54]). The Tribunal had determined that Comcare was liable to pay compensation under s 14(1) of the Compensation Act to Mr Reeve, a CBA bank manager, for a major depressive disorder. It was common ground that Mr Reeve's disorder was "contributed to, to a significant degree" by his employment and that the disorder was a "disease" within the meaning of "injury": CBA v Reeve at [38] (Rares and Tracey JJ). The issue was whether, in reaching its decision, the Tribunal correctly construed and applied the exclusion, with the focus of the Court's consideration being on the meaning of "administrative action" in the exclusion. Rares and Tracey JJ rejected (at [60]-[63]) the appellant Bank's contention that Mr Reeve's attendance at meetings dealing with customer satisfaction surveys and like activities fell within the exclusion, on the basis that the exclusion related to specific administration action directed to an employee's employment, as opposed to actions done as part of the ordinary duties or tasks that the employee performed in that employment: see also [33] (Gray J). 27 The Court also commented on the phrase "as a result of" in the exclusion. Rares and Tracey JJ observed (at [55]) that in Hart v Comcare the Full Court concluded, with respect to the earlier version of the exclusion, that "the expression 'as a result of' applied to any operative cause, whether or not there were other operative causes that had nothing to do with the disciplinary action": see also [24] (Gray J). Purporting to translate this to the exclusion in its current form, their Honours affirmed (at [65]) that: The assessment of whether a disease, injury or aggravation has been suffered as a result of reasonable administrative action within the meaning of s 5A(1), involves the formation of a judgment as to causation. This requires a tribunal of fact to ascertain whether the disease, injury or aggravation is the, or a, common sense, consequence of what is identified as reasonable administrative action by the employer in respect of the employee's employment. (Emphasis added) It may be accepted that since Comcare v Martin their Honours' reference to "common sense" should be disregarded.

Drenth v Comcare 28 In Drenth v Comcare another Full Court (Rares, McKerracher and Murphy JJ) also drew on Hart v Comcare in giving effect to the words "as a result of" in the exclusion. Their Honours stated (at [29]): The significance of identifying whether "reasonable administration action" was "a cause" of the compensation complainant's condition follows from the decision of the Full Court in Hart v Comcare (2005) 145 FCR 29. The Court held that if any factor that had been excluded as a cause of an injury or aggravation for which compensation was payable under the SRC Act, then even though there may have been one or several other operative causes at work, no compensation was payable at all. Thus, if any "reasonable administrative action" were found to be an operative cause of the aggravation of Ms Drenth's pre-existing condition, she was not entitled to compensation as explained in Reeve 199 FCR at 481-482 [54]-[56]. (Emphasis added) 29 Aside from the reference to "common sense" in CBA v Reeve, Comcare v Martin does not cast doubt on the extension of the analysis in Hart v Comcare to the exclusion as presently expressed in s 5A(1) of the Compensation Act: see, e.g., Comcare v Martin at [45]. Rather, the history of the decision-making in the present context illustrates the dangers of focussing on the text of reasons for judgment instead of the provisions of the governing statutory text.

Martin v Comcare FFC 30 This was the decision that fell for consideration in the High Court on appeal, by special leave. The Tribunal had previously found that Ms Martin suffered an injury within the meaning of the Compensation Act and that Comcare was liable to pay her compensation under s 14. Ms Martin claimed that she had been bullied and harassed by her supervisor at her work at the Australian Broadcasting Corporation (ABC). She sought and obtained a temporary transfer to a higher position. She applied to be appointed permanently to that position to avoid working again under the supervisor. When informed that she was unsuccessful, she "broke down uncontrollably" and was subsequently diagnosed as suffering from an "adjustment disorder", which rendered her unfit for work. Comcare refused her application on the basis that the disorder was not an "injury" as defined in s 5A(1) because she had suffered the disorder "as a result of reasonable administrative action" within the meaning of the exclusion. The Tribunal found that Ms Martin's adjustment disorder deteriorated as a result of her failure to obtain the promotion; that Ms Martin's adjustment disorder was contributed to, to a significant degree, by her employment with the ABC; and that this was not the result of reasonable administrative action taken in a reasonable manner in respect of her employment. On an appeal under s 44 of the AAT Act, a judge of this Court held that the Tribunal erred in law in finding that the decision not to promote her was not taken in a reasonable manner, although it did not err in law in concluding that she suffered the adjustment disorder as a result of that decision. 31 In Martin v Comcare FFC, the Full Court unanimously agreed with the primary judge that the Tribunal erred in law in finding that the decision not to promote her was not taken in a reasonable manner, but Siopis and Murphy JJ disagreed with the balance of his decision. The majority allowed the appeal on the basis that the Tribunal's decision that Ms Martin's disorder was suffered as a result of the decision not to promote her was not borne out by its factual findings and involved a misconstruction of s 5A(1): see Martin v Comcare FCC at [117]-[118]. Flick J dissented, because his Honour took the contrary view of the Tribunal's findings of fact. 32 It is convenient to note at this point that, in the course of Murphy J's reasons in Martin v Comcare FFC, his Honour stated (at [110]) that the Tribunal's task "was to decide, by the application of common sense to the facts as it found them, whether Ms Martin's adjustment disorder was suffered as a result of the failure to promote her". Murphy J reasoned (at [121]) that "[t]he question of whether she suffered the adjustment disorder as a result of the failure to promote her was not a matter to be determined by using metaphysical concepts of cause and effect and instead required a common sense approach to the facts as it had found them" (emphasis in original). His Honour held (at [125]) that "[t]he Tribunal's error of construction and its erroneous approach to causation led it to subvert its earlier factual findings as to the cause of Ms Martin's adjustment disorder. It did not apply common sense to the facts, as found by it, that the cause of Ms Martin's condition was not the failure to promote her".

The High Court's decision in Comcare v Martin 33 In Comcare v Martin, the High Court held (at [42]) that the Full Court erred in Comcare v Martin FCC in construing the phrase "as a result of" in s 5A(1) as importing a "common sense" notion of causation. At the same time, in Comcare v Martin the High Court examined the question to be addressed in applying the exclusion in s 5A(1), in a case to which s 5B also applied. We focus in the disposition of this appeal on this latter aspect of the Court's reasons. 34 The Court made its examination of the question in the context of the factual findings made by the Tribunal regarding Ms Martin. These findings attracted s 5B of the Compensation Act. The Court noted (at [15]) that, on its findings, "the Tribunal should have identified Ms Martin's disease as the significant deterioration of her adjustment disorder, and therefore as an aggravation of an ailment within s 5B(1)(b)"; and (at [16]) that "there was no dispute before the Tribunal that the deterioration of Ms Martin's adjustment disorder was contributed to, to a significant degree, by her employment". 35 Significantly as we shall explain, the Court also held (at [39]) that: The critical finding of the Tribunal was that returning to her substantive position was a direct and foreseeable consequence of the decision in Ms Martin's mind. The deterioration of her mental condition, on the Tribunal's finding, was triggered by her contemplation of what she perceived to be a consequence of the decision. 36 The issue of principle, as the Court saw it, was whether the Tribunal was correct in law to conclude that the deterioration of Ms Martin's condition triggered by her consideration of a perceived consequence of the decision was a disease suffered "as a result of" that decision. The Court held (at [43]) that the words "as a result of" in the exclusion in s 5A(1) did not impose a "separate and free-standing test of causation" but instead referred to "the test of causation spelt out in s 5B(1)". The Court explained (at [44]-[45]) that: The application of the definition of disease in s 5B(1) means that, to have suffered a disease falling within s 5A(1)(a), the employee must have suffered an ailment or aggravation of an ailment that was contributed to, to a significant degree, by the employee's employment. In excluding from the definition of an injury compensable under the Act a disease that is suffered by an employee "as a result of" reasonable administrative action taken in a reasonable manner in respect of the employee's employment, s 5A(1) is naturally read as referring to the contribution made to the suffering of the disease by an event in the course of the employee's employment which answers that description of reasonable administrative action. When the exclusionary phrase is so read, it becomes apparent that an employee has suffered a disease "as a result of" administrative action if the administrative action is a cause in fact of the disease which the employee has suffered. The administrative action need not be the sole cause. There may be multiple causes, some of which might even be related to other aspects of the employee's employment. What is necessary is that the taking of the administrative action is an event without which the employee's ailment or aggravation would not have been a disease: it would not have been contributed to, to a significant degree, by the employee's employment. 37 As these passages show, this explanation involves no substantial departure from the approach to the statutory text adopted in Hart v Comcare, and re-iterated in Drenth v Comcare with respect to s 5A(1). What these passages clarify, however, is the relationship between the exclusion and s 5B, in a case to which s 5B applies. Whilst it may be necessary for the administrative action to be a cause, that of itself, is not sufficient for the requisite "causal connection" to be met. The construction that the Court has placed on the exclusion in s 5A(1), when read with s 5B, reflects what it has identified as the statutory purpose of the exclusion. This is reflected in the Court's statement (at [46]) that: The taking of administrative action in respect of an employee's employment was in that way sought to be insulated from need for concern about the psychological effect of the decision on the employee. 38 The Court went on to say (at [47]) that: Having regard to the text and structure of ss 5A and 5B, and consistently with the statutory purpose of the exclusion in s 5A(1), what is required to meet the causal connection connoted by the exclusionary phrase in s 5A(1) in its application to a disease within s 5A(1)(a) is therefore that the employee would not have suffered that disease, as defined in s 5B(1), if the administrative action had not been taken. That is to say, the causal connection is met if, without the taking of the administrative action, the employee would not have suffered the ailment or aggravation that was contributed to, to a significant degree, by the employee's employment. (Emphasis added) 39 The Court concluded (at [49]) that the "reasoning of the Tribunal was correct in law on the findings of fact which it made".

Did the Tribunal's decision involve an error of law, having regard to Comcare v Martin? 40 When regard is had to Comcare v Martin, a deficiency in the Tribunal's decision-making in Dr Lim's case becomes apparent. What the Tribunal failed to do was address the entirety of the question to which the application of the exclusion in s 5A(1), when read with s 5B, gave rise. 41 As noted earlier, in Dr Lim's case, there was no dispute that the relevant adjustment disorder (being an ailment as defined in s 5B(1)(a)) was contributed to, to a significant degree, by Dr Lim's employment by ACMA. Put another way, as in Ms Martin's case, only employment-related factors were identified as contributing to Dr Lim's ailment. In this circumstance, applying Comcare v Martin, to satisfy the causal requirement in the exclusion in s 5A(1), the Tribunal had to be satisfied that Dr Lim would not have suffered an ailment (or aggravation of an ailment) if the performance appraisal had not been taken. 42 In Ms Martin's case, the High Court identified as "critical" the Tribunal's finding that returning to her substantive position was a direct and foreseeable consequence of the decision in her mind and that this triggered the deterioration of her mental condition. There was no finding of this kind in Dr Lim's case. In Dr Lim's case, the Tribunal found simply that the performance appraisal contributed to the development of Dr Lim's psychological condition. It is clear from the Tribunal's reasons (see [8] above) that the Tribunal's statement that the performance appraisal was "a cause" of Dr Lim's ailment and that Dr Lim suffered the adjustment disorder "as a result of" the performance appraisal are supported by that finding and no other finding. The Tribunal did not address the question whether or not Dr Lim would have suffered the adjustment disorder if the performance appraisal on 31 January 2011 had not been made. The failure to do so was an error of law. 43 We do not accept that it can be inferred from the Tribunal's findings in this case that Dr Lim would not have suffered her adjustment disorder, being a disease as defined in s 5B, if the performance appraisal had not been taken. As noted earlier, Comcare itself identified two other employment-related events that contributed significantly to the development of Dr Lim's condition; and the Tribunal indicated that other employment-related events may have contributed to her condition to a greater extent than the performance appraisal. Given that the only causal factors identified in Dr Lim's case are employment-related factors, the exclusion in s 5A(1) will only be satisfied in her case if the Tribunal is satisfied that Dr Lim would not have suffered her adjustment disorder if the performance appraisal had not been made. In these circumstance, we conclude that the Tribunal's decision involved legal error in the application of the causal connection in the exclusion in s 5A(1), read with s 5B of the Compensation Act. 44 The appeal should therefore be allowed and the matter remitted to the Tribunal in order that it might address the statutory question, whether or not Dr Lim would have suffered the adjustment disorder if the performance appraisal on 31 January 2011 had not been made. It is for the Tribunal to make the findings of fact that answer this question. In so doing the Tribunal will need to assess the evidence before it. This is not a case in which the Court should exercise the power to make findings of fact conferred by s 44(7) of the AAT Act. The conclusion that the Tribunal reaches after it has considered the evidence is a matter for it, and not for this Court. 45 We observe that in a different case, where both employment and non-employment factors are posited as contributing to an ailment or an aggravation of such an ailment (within the meaning of s 5B(1)), in order to determine whether s 5B applies, a finding would need to be made as to whether the ailment or aggravation was contributed to, to a significant degree, by the employee's employment. If there were an affirmative finding, then the further questions would arise as to whether or not there was reasonable administrative action taken in a reasonable manner; and, if so, whether or not the disease would have been suffered by the employee if that action had not been taken. If the Tribunal were so satisfied, then the exclusion to the definition of "injury" in s 5A(1) would apply.

Disposition 46 For the reasons stated, we would allow the appeal and set aside the orders Flick J made on 15 June 2016 and in lieu thereof order that the Tribunal's decision of 27 March 2015 be set aside in so far as it affirmed the decision under review; and the matter be remitted to the Tribunal to be determined according to law and the reasons herein. For the purpose of answering the question identified in paragraph [44] above, the Tribunal should have regard to the evidence that has already been given in the proceeding before it and receive further evidence limited to this question only if it considers it appropriate to do so. We consider it appropriate in the circumstances that there should be no order as to the costs of the appeal. We note that the parties did not propose otherwise. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Kenny, Tracey and Bromberg.