Sufficiency of evidence and onus of proof - particular accidents and diseases

• mental and nervous disorders - Workers Compensation - appellant contracted an illness or disorder of the mind - entitlement to compensation governed by s30A of the Workers Rehabilitation and Compensation Act - causation - onus or proof

S30A(b)(iii) - discharge of onus of proof by proving that the disability arose from administrative action which was unreasonable or which was taken in an unreasonable manner, or alternatively by proving that there existed other contributing causes - requirement to show whether a connection between the lack of reasonableness of the action and the disability.

Appeal and new trial - appeal - general principles - interference with judge's findings of fact - functions of appellate court - where inferences of fact involved - where findings clearly wrong - interference by Tribunal with primary findings of fact by Review Officer - interference with findings as to unreasonable manner of implementation or administrative action - circumstances in which such findings may be interfered with - whether worker's disability arose wholly or predominantly from administrative action - whether evidence on which Review Officer could find that disability arose wholly or predominantly from administrative action. Workers Rehabilitation and Compensation Act 1986 s30(b)(iii), s30A, referred to.

ADELAIDE, 5, 8 September 1997 (hearing) 25 February 1998 (decision)

The circumstances of this appeal are described in the reasons of Bleby J which I have had the advantage of reading. I respectfully agree with those reasons up to the last section (The Tribunal's Decision - the Worker's Alternative Argument) and, as to that, I agree with his Honour's criticisms of the learned Deputy President's treatment of the appellant's alternative submission, namely, that her disability did not arise wholly or predominantly from reasonable administrative action taken in a reasonable manner by her employer in connection with her employment (s30(b)(iii)). The question is what order this Court should make in those circumstances.

Section 30A requires a worker to prove a negative

• that his or her disability did not arise wholly or predominantly from one or other of the possible causes specified in par(b) of the section. It will not be enough, in my view, if the evidence identifies a number of causes, including one or more of the specified causes, but does not show whether or not any one of them was predominant. The evidence must go further than that and establish to the satisfaction of the review officer (or appeal tribunal) that none of the causes specified in par(b) was, in fact, predominant. If the point is left in a state of uncertainty the worker will fail.

The Review Officer carefully examined the evidence and reached the conclusion that the implementation of the audit process was the "major or precipitating" factor in bringing about the appellant's stress disorder - the disability upon which her claim was based. The David Warner conversation and the management style of James Grealy were contributing factors, but the audit process was the major one. The Review Officer found that the implementation of the audit process constituted "reasonable administrative action" within the meaning of s30A. I agree with Bleby J that all of this was tantamount to a finding that the disability arose predominantly from such administrative action. It certainly implied that the appellant had failed to discharge the burden under s30A of proving that her disability did not arise wholly or predominantly from that action. Finally, the Review Officer considered whether the administrative action was carried out in a reasonable manner and she held that it was not. However, for the reasons that Bleby J has given, the Tribunal was justified in reversing the Review Officer on that last issue, and normally that would mean restoring the original WorkCover determination rejecting the appellant's claim. That, in effect, is what the Tribunal did when it upheld WorkCover's appeal. The only thing in those circumstances that could stand in the way of our dismissing the appellant's appeal to this Court would be an undermining on proper grounds of the Review Officer's implicit finding that the appellant had not proved that her disability did not arise wholly or predominantly from the identified administrative action.

The appellant gave evidence of the events preceding the onset of her disability occasioned by reason of anxiety and reactive depression. The Review Officer regarded her as an honest witness but not wholly reliable. Dr Taylor, her psychiatrist, gave evidence of four substantial causes of the appellant's condition - her concern about the work appraisals, her relationship with James Grealy, her conversation with David Warner and the actual implementation of the appraisal. He said it was not possible to identify any one of the four stressors as being the predominant cause - "It's an additive situation I don't think any one of them by itself would have been a cause of her reaction". What the appellant believed Warner said to her (which was quite different from what the Review Officer found Warner actually said) was, Dr Taylor thought, perhaps the strongest of the four factors as the time for the work appraisal got close, but in re-examination he declined to say that it was the "whole predominant" (sic; meaning "whole or predominant"?) cause of the disability. On this subject the Review Officer said -

"I prefer Dr Taylor's opinion that a number of factors combined to bring about the condition, culminating in the implementation of some appraisals by James Grealy; on my view of the evidence, an additional factor also came into play, namely Mr Grealy's declining to do the worker's appraisal on the day she requested it."

She went on, as I have said, to hold that the implementation of the audit process was the major or precipitating factor in her illness - in other words, that it was the predominant cause.

In my opinion the Review Officer was entitled to make that finding. It was a question in the end whether the appellant had discharged the onus on this issue, having regard to the whole of the evidence. Obviously Dr Taylor's assessment of the four stressors that he discerned, including his appraisal of the Warner episode, was important but the Review Officer was not obliged to act on his opinion. It was a matter on which she had to form her own judgment. She was entitled to take into account the evidence of the other witnesses including, of course, the evidence of the appellant herself. The Review Officer plainly gave considerable weight to the effect of Grealy's declining to do the appellant's appraisal on the day she requested it - an aspect of the relevant reasonable and reasonably taken administrative action and one which unfortunately had a serious effect on the appellant's mental well being. It led directly to her stopping work indefinitely and presenting herself to her doctor, Dr Chang, the next day in a very agitated state. The Review Officer took into account - correctly, in my view - the effect on the appellant of her misconception of the Warner conversation, but she was not required to regard it as being so important causatively as to prevent the administrative action, that the Tribunal has found to be reasonable and taken in a reasonable way, from being predominant. In my opinion the Review Officer was justified in concluding that the appellant had not discharged the burden of proof on the predominance issue.

For these reasons I would uphold the learned Deputy President's order although for different reasons. The appeal to this Court should therefore be dismissed.

I have had the advantage of reading in draft the opinion of Bleby J. The facts are set out in detail in his reasons and I adopt them.

It seems to me that both the Review Officer and the Tribunal have made the application of the facts in this case to s30A of the Workers Rehabilitation and Compensation Act more difficult than it needs to be.

"30A. A disability consisting of an illness or disorder of the mind is compensable if and only if-

(a) the employment was a substantial cause of the disability; and (b) the disability did not arise wholly or predominantly from-

(i) reasonable action taken in a reasonable manner by the employer to transfer, demote, discipline, counsel, retrench or dismiss the worker; or (ii) a decision of the employer, based on reasonable grounds, not to award or provide a promotion, transfer, or benefit in connection with the worker's employment; or (iii) reasonable administrative action taken in a reasonable manner by the employer in connection with the worker's employment; or (iv) reasonable action taken in a reasonable manner under this Act affecting the worker."

Section 30A will operate where the Review Officer or the Tribunal concludes that the disability of which the worker complains consists of an illness or disorder of the mind. The expression illness or disorder of the mind is not otherwise defined in the Act but no doubt includes a psychiatric condition and any other condition which can be categorised as an illness or disorder of the mind. A disability means any physical or mental injury and includes a secondary disability namely a disability that is or results from the aggravation, acceleration, exacerbation, deterioration or occurrence of a prior disability.

If a Review Officer or the Tribunal concludes that the worker has a disability which consists of an illness or disorder of the mind, that disability is compensable if, and only if, the worker can make out paragraphs (a) and (b) of s30A. The onus is upon the worker to establish all of the relevant matters in paragraphs (a) and (b) of s30A: SA Mental Health Services Inc v Margush (Unreported, Full Court, 8 September 1995, Judgment No. S5246). That means that the worker must prove the affirmative, that the employment was a substantial cause of the disability and then must prove the negative, that the disability did not arise wholly or predominantly from any of the relevant matters in s30A (b).

In this case the appellant needed to establish that the employment was a substantial cause of the disability and (on the facts of this case) the disability did not arise wholly or predominantly from reasonable administrative action taken in a reasonable manner by the employer in connection with the worker's employment.

The first step was therefore to establish that the employment was a substantial cause of the disability. The appellant succeeded before the Review Officer in establishing that matter and no complaint was made by the respondent of that finding before the Tribunal. The appellant then needed to establish that the disability did not arise wholly or predominantly from reasonable administrative action taken in a reasonable manner by the employer in connection with the worker's employment.

In addressing that second matter it has to be remembered of course that the worker must have already established that the employment was a substantial cause of the disability. The worker therefore has to proceed upon the premise that whatever it was that caused the disability the employment was a substantial cause. In other words, any factors extraneous to the employment must have been insubstantial causes.

It seems to me that the first matter which would need to be addressed in consideration of whether or not a worker had discharged the onus upon the worker under s30A (b) (iii) is whether or not the disability arose from administrative action. That would require the worker addressing two matters. First whether the action within the employment, which was a substantial cause of the disability, was an administrative action. If the worker established that it was not an administrative action then the worker has discharged the onus upon the worker under s30A (b) because then the worker would have established that the employment was a substantial cause of the disability and the disability did not arise from administrative action. In those circumstances it would not matter whether the disability arose wholly or predominantly from any action or whether the administrative action was reasonable or taken in a reasonable manner by the employer in connection with the worker's employment.

If the worker was not able to establish that the action was not an administrative action then the second matter to be considered is whether or not the disability for which the employment was a substantial cause arose wholly or predominantly from the administrative action. If the worker establishes that there were other causes operating other than causes arising from administrative action then the worker will have discharged the onus of establishing that the disability did not arise wholly from administrative action. But the worker needs to go further. The worker must also establish that the disability did not arise predominantly from administrative action of the kind described in s30A (b) (iii).

If the disability arose partly from administrative action and partly from other factors, which still enabled it to be said that the employment was a substantial cause of the disability, then the Review Officer or the Tribunal must determine whether the disability arose predominantly from the administrative action.

In that respect the worker might establish that there was a cause of the disability which, although it still enabled it to be said that the employment was a substantial cause of the disability, was not an administrative action and was of such a magnitude that the administrative action taken by the employer did not allow it to be said that the disability arose predominantly from that administrative action.

If after all of those matters the worker has not established that the disability did not arise wholly or predominantly from administrative action, then next it must be determined whether that administrative action was reasonable and if reasonable whether it was taken in a reasonable manner by the employer in connection with the worker's employment.

Both of these further matters will be an inquiry of fact to be determined objectively. Whether the administrative action is reasonable is simply a matter of fact. Whether the administrative action was taken in a reasonable manner by the employer will depend upon the administrative action, the facts and circumstances giving rise to the requirement for the administrative action, the way in which the administrative action impacts upon the worker and the circumstances in which the administrative action was implemented and any other matters relevant to determining whether the administration action was taken in a reasonable manner by the employer.

In my opinion, if the section is approached in that way then the Review Officer or the Tribunal will not lose sight of the fact that at all times the worker must establish that the employment was a substantial cause of the disability and then, having established that matter, the worker must establish the relevant matter or matters under s30A (b).

I agree with Bleby J that neither the Review Officer nor the Tribunal approached the application of the facts to the section having in mind the matters which rested upon the appellant to establish.

The Tribunal's powers are given to it by s97 of the Act. Those powers enable it, at its discretion, to re-hear the whole or any part of the evidence taken before the Review Officer or to take further evidence. It must also, if requested by a party to the appeal, re-hear evidence taken before the Review Officer, if the evidence is relevant to the appeal and the record of evidence is incomplete or inaccurate in a material particular. Further, it must also, if requested by a party to the appeal, and if the evidence is relevant to the appeal, hear oral evidence from a witness from whom evidence was taken in a documentary form by the Review Officer, and take further evidence if the party seeking to introduce it could not reasonably be expected to have done so in the proceedings before the Review Officer, and take evidence if there is some substantial reason for admitting the evidence in the interests of justice.

The Tribunal therefore is entitled to hear the primary evidence again and indeed to hear evidence that was not called before the Review Officer even in circumstances where that evidence was available to be called.

If an appeal to the Tribunal is lodged the Review Officer must send any application, documents, written submissions, statements and reports and any relevant exhibits and any notes of evidence made by or at the direction of the Review Officer (s97 (4b)) to the Tribunal. The Tribunal may examine any papers, exhibits and notes submitted by a Review Officer under s97(4b) of the Act and "draw any conclusions of fact from them it considers proper" (s97(4c)).

I think whilst the appeal to the Tribunal is a re-hearing, and I adhere to the opinion I expressed in Jorgensen-Hall v Workcover Corporation (Full Court Doyle CJ, Lander and Bleby JJ 1 December 1997 Judgment No. S6459), the Tribunal's powers given by s97 do not allow it to be said that it is necessarily bound to accept primary findings of fact made by a Review Officer. In most circumstances it would. But it does have the power to draw its own conclusions of fact from the documents even without hearing further evidence.

It can, in the exercise of its discretion, re-hear the whole of the evidence again and indeed hear further evidence. In these circumstances it would not be disadvantaged by not hearing the witnesses itself. Indeed it could enjoy greater advantages than the Review Officer because it might hear further evidence.

Where it does not re-hear the evidence or take any further evidence and where the Review Officer has relied on the credibility of witnesses, the Tribunal would ordinarily allow the Review Officer's findings to stand unless it could be shown that the Review Officer " 'has failed to use or palpably misused his advantage' or has acted on evidence which was 'inconsistent with facts uncontrovertibly established by the evidence' or which was 'glaringly improbable' ": Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479.

I am not sure therefore that I can agree with Bleby J that it is appropriate to equate the powers of this Tribunal to that of an appellate body hearing an appeal against a determination that a dismissal is harsh, unjust or unreasonable, or an appeal from a decision as to whether a person can conveniently belong to an industrial organisation. Whilst in both those cases the appellate body has power to take fresh evidence and may confirm, quash or vary the whole or part, the appellate body does not have the wider powers which attach to the Tribunal. This Tribunal has special characteristics given to it by s97 of the Act and to that extent is peculiar.

The Review Officer concluded that the appellant was entitled to compensation because she had established: first, that the appellant's employment was a substantial cause of her disability; and secondly, that the audit process constituted reasonable administrative action but that it was not taken in a reasonable manner.

I agree with Bleby J that the Review Officer erred in deciding that the implementation of the audit process was not carried out in a reasonable manner. I also agree with Bleby J that it was appropriate for the Tribunal to substitute a finding that the manner of implementation of the scheme was reasonable in all of the circumstances and that the appellant failed to discharge the onus of proving that the administrative action was not reasonable or was not taken in a reasonable manner by the employer in connection with the appellant's employment.

There was only one ground of appeal in the appeal from the Review Officer to the Tribunal, namely:

"The Review Officer was wrong in law and in fact in determining that the employer's administrative action in relation to the "audit" process was not carried out in a reasonable manner."

The Corporation and the appellant in that appeal assumed that the Review Officer had found that disability did arise predominantly from administrative action. On the appeal it was agreed by the appellant that the conversation with David Warner and the management style of James Grearly were not administrative actions and therefore the disability was not caused wholly or predominantly by administrative action. Therefore it was submitted the worker had made out the onus upon her even if the action was reasonable and had been taken in a reasonable manner by the employer in connection with the appellant's employment.

The Tribunal appears to have dealt with that argument in the circumstances of whether the appellant had made out that the employment was a substantial cause of the disability.

In these circumstances the argument was not properly considered and to that extent the Tribunal erred.

The Review Officer determined that the appellant's disability arose from a combination of matters, all of which I think she determined were matters connected with the appellant's employment but not all of which were administrative actions.

"In my view, having regard to Doctor Taylor's opinion, the David Warner conversation and the management style of James Grearly were contributing factors, but I agree with Ms Caucus (sic) that they are not "administrative actions", but that the implementation of the audit process was. In view of the worker's evidence as to the events leading to the onset of her condition, ending with the commencements (sic) of assessments of some staff by James Grealy (revealed by other evidence to be a trial), and his declining to do her assessment on the particular day requested by her, which evidence I accept, I consider that factor to be the major or precipitating one. I accept the general proposition that the employer was reasonable in implementing an individual assessment procedure to assist it in meeting the required standards of nursing home care. It was also a reasonable approach to commence with a trial or pilot involving a small number of staff to test the audit competency tool.

I consider that the implementation of the audit process constitutes "reasonable administrative action". It is therefore necessary to determine whether it was carried out in a reasonable manner. If not, the worker's condition is compensable."

In that passage the Review Officer addressed inter alia the question whether the disability arose wholly or predominantly from administrative action. In that passage she has found that the implementation of audit process, which included the declining by James Grealy to do her assessment on the particular day, all to be administrative action. She has also found that the David Warner conversation and the management style of James Grealy not to be administrative actions. Having determined what were the administrative actions she then concluded "that factor to be the major or precipitating one." Of course that was not the test. The test was whether the disability arose wholly or predominantly from the administrative action.

Clearly her reasons mean that the disability did not arise wholly from the administrative action. However, I do believe that her conclusion that the administrative action was the major or precipitating one means that had she applied the correct test she would have concluded that the disability arose predominantly from the administrative action.

The Review Officer otherwise found that the David Warner conversation did not take place as the appellant claimed. She found that the appellant's perception of that conversation was likely to be less accurate than that of Mr Warner. In those circumstances it would follow that in so far as Doctor Taylor relied upon that as a precipitating cause his opinion was flawed. That is to say the assumption upon which he relied was wrong. That does not necessarily mean that his opinion must be rejected. However, the David Warner conversation, at least as deposed to by the appellant and relied on by Doctor Taylor, had to be put aside as a cause of the disability. In my opinion, that left only the appellant's perception of the management style of James Grearly which the Review Officer determined was not an administrative action.

The Review Officer determined that the other events apart from the management style of James Grearly amounted to administrative action and she was entitled so to find.

Having concluded that those other events amounted to administrative action she next had to decide whether the appellant had made out that the disability of which she complained did not arise wholly or predominantly from administrative action. Clearly, as she found inferentially that the management style of James Grearly, which she also found was not an administrative action, was a cause of the appellant's disability then the appellant had established that the disability did not arise wholly from administrative action. However it was open to the Review Officer to conclude as she did that the disability arose predominantly from administrative action, namely the events to which she has referred apart from the management style of James Grearly. In my opinion it was open to the Review Officer to conclude that the appellant had not established that the disability did not arise wholly or predominantly from administrative action.

For those reasons which differ from the Tribunal's reasons I would dismiss the appeal.

The appellant ("the worker") was at all material times employed by an organisation known as Eldercare Incorporated ("the employer"), which operated a hostel and nursing home known as Alexandra Lodge. As a result of a disability which prevented her from working from or about 13 June 1995, the worker made a claim for weekly payments by way of income maintenance pursuant to the provisions of the Workers Rehabilitation and Compensation Act 1986 ("the Act"). On 15 August 1995 that claim was rejected on behalf of the respondent ("the Corporation"). On 23 August 1995 the worker made an application for review of that decision. After considering extensive oral and documentary evidence a Review Officer, by determination dated 1 November 1996, determined that the disability was compensable and that the worker was entitled to weekly payments of income maintenance from the date of her incapacity. The Corporation appealed to the Workers Compensation Appeal Tribunal ("the Tribunal") which, on 7 March 1997, allowed the appeal. It is from that decision that an appeal by leave and limited to a question of law is brought to this Court pursuant to the now repealed s100 of the Act.

At the time of the relevant events giving rise to the claim, the worker was aged 53 and was married, with four adult children. She had been employed by the employer for some 18 years, and was working as a nurse assistant in the nursing home section of Alexandra Lodge. She claimed, and the Review Officer subsequently accepted, that she stopped work on 13 June 1995 as a result of what Dr Taylor, a psychiatrist, diagnosed as "an adjustment disorder with mixed anxiety and depressed mood". Section 30A of the Act, to which further reference will be made, required that there be an analysis of the cause of that disability, and questions relating to causation were the central issues debated before both the Review Officer and the Tribunal. It is therefore necessary to refer in more detail to the evidence led before the Review Officer.

In 1994 in the hostel section of Alexandra Lodge and in other similar establishments conducted by the employer, there had been introduced a system of nursing competency assessments. That was described as a process for evaluating employee skills and competencies, and as being fundamental to targeted staff development. It was described by Mr Healey, the Chief Executive Officer of the employer, as being a "non-threatening, employee improvement mechanism that has national acceptance and application. It does highlight deficiencies in employees for the express purpose of addressing those deficiencies, bringing employees 'up to speed' and improving care levels and quality". According to Mr Healey, the employer had not experienced any problems with the process from employees at other sites, and no-one had found the process stressful or intimidating.

There had been difficulties in implementing the process in the nursing home section of Alexandra Lodge because of what Mr Healey described as "internal union pressure", particularly from Ms Elizabeth Hill, the then union representative on the site. According to the evidence of the worker, that resistance related in part to the identity of the person who was to conduct the assessments. Ms Hill had been pressing for an independent person from outside the organisation, and had apparently expressed concerns about the assessments being used for disciplinary or other purposes. Because of staff concerns and the possibility of an undesirable adversarial reaction on the part of either management, staff or the union concerned, Mr Healey decided not to press on with the programme in the nursing home in 1994, and conveyed that information, together with the reasons, to Ms Hill in a letter dated 30 November 1994.

Ms Hill resigned from her employment on 30 April 1995, although she had been ill and away from work since January or February 1995. With her departure, the management of the organisation decided to attempt again to introduce the assessment process.

Ms Anne Henderson was the worker's site director. She convened a meeting of staff on 10 May 1995 to discuss an apparent drop in nursing standards in the home and to inform the staff that the appraisals or care audits would be introduced, the purpose being to identify staff strengths, the areas of their work that needed improving and any staff development issues that could be included in the programme for that year. She informed the staff that a consultative committee would be set up to monitor and advise on the process, and that the committee would include three members of the staff, from whom nominations would be invited. The worker said in evidence that she had received a pro forma audit paper before the meeting and "didn't have any great problems with it". (AB 195) That form had been given to her by her immediate supervisor, James Grealy, a clinical nurse, because she then appeared to him to be the most likely candidate to succeed Elizabeth Hill as union delegate. That in fact did not occur, as Mr David Warner was later appointed union delegate.

On 12 May 1995 Ms Henderson circulated a memorandum to all nursing home care staff inviting nominations for the three staff members to work with herself and Mr Grealy "in developing competencies standards for Alexandra Lodge care staff". The memorandum explained what a competency standard was, and called for nominations by Friday, 19 May "so that work on this project can commence during the following week".

At the same time another blank nursing care assessment form was placed on the desk on the first floor for the staff's information. The evidence of Ms Henderson was that this subsequently disappeared some days later.

The worker attended a union meeting of nurse attendants at a date shortly after 12 May. The meeting resolved to approach Ms Henderson to seek a two week extension of the time for nominating members of the working party. She said that some hostility was expressed at that meeting about the process and that some audits had already begun. That may not have been entirely accurate, but there was no evidence as to precisely when the audits were commenced. During the course of the meeting the worker and another went and saw Ms Henderson who agreed to an extension of time for the appointment of members of the working party, but did not accede to a request to stop the audits.

The worker was away from work as a result of another work related disability between 17 and 29 May.

On 22 May there was a meeting between three staff representatives and Ms Henderson at which the use of the pro forma was questioned, and the staff members were assured that it was the same one that had been used in other Eldercare nursing homes. They also said that they wanted to select their own assessors, and were told that that was part of the responsibility of Mr Grealy.

The evidence of Ms Henderson was that some audits were indeed commenced and conducted by Mr Grealy. Ms Henderson claimed that these members of staff had been informally invited to participate in a trial of the procedure to test the tool and the process for feedback. These audits had occurred probably while the worker was away, as two of the staff involved wrote notes dated 23 May and one wrote on 25 May, all expressing satisfaction with the process and with the tool. On 26 May Ms Henderson wrote letters to each of the participants in the following terms:

"Thank you for agreeing to be involved in the trialing of the Nursing Audit Competency Tool.

Without the co-operation of Staff in this project it would be difficult to determine the validity or suitability of the tool used for the Audits.

Your positive involvement and reaction to the process will help make the introduction of Nursing Audits/Competencies to the Nursing Home Care Staff a non-threatening positive experience that will ensure all Staff are able to deliver care to the residents in a confident and competent manner.

There was a meeting on 31 May 1995 between Ms Henderson, James Grealy, Toni Venner (a staff member), David Warner and another member of staff. Ms Henderson noted that staff had been informally invited to participate in trialing the auditing procedure to test the tool and process for feedback. She also noted that Toni Venner reported that the staff she had spoken to had not been worried at all by the process. David Warner indicated that he had not had any negative feedback and was supportive of the process continuing.

The worker plainly had some misgivings about Mr Grealy, her supervisor. She said in evidence that he had expressed a preference to work with younger nursing staff and had said that older staff (which included the worker) "never know when to leave". She claimed that at the meeting on 10 May he had told the meeting that there were "too many cruisers", and that made her feel uncomfortable.

At a time which was not specified, the worker said that she had a meeting at work with David Warner, who by then had been nominated by the staff to replace Elizabeth Hill as union representative. The worker alleged that Warner had told her in the strictest confidence that, at a social event over Easter, Grealy had told him that he was glad that Liz Hill had left, that there were a few older staff that he wanted to get rid of, that the worker's name was mentioned and that Grealy intended to "get her on her work performance".

Mr Warner gave a different version of the events. He acknowledged having had a conversation with Mr Grealy at the Oakbank Races on Easter Monday in the course of which Grealy said that he wanted to bring some people "up to speed", and that the worker's name was mentioned along with two others. Warner described it as an expressed intention to retrain some individuals. He said that he had mentioned the occasion to the worker some time later. He did not express it to be in confidence. He did mention to her what Grealy had said about bringing some people up to speed and that her name was mentioned. He said:

"I didn't say to her that James was out to get her, nor did I put any 'spin' on what had been said about her. I also totally refute any suggestion that I put it to her, in such a way, that she had something to worry about. In fact, I recall saying to her she had nothing to worry about... I told her this in a light hearted and jovial fashion... I also did not tell the other two people, whose names were mentioned at Oakbank, about James' intentions."

He denied ever suggesting to the worker that Grealy was going to be looking for some excuse to get rid of her or to terminate her employment.

The version preferred by the Review Officer was that of Mr Warner.

The worker claimed to have become very upset about the assessment process and the fact that it was being conducted by Mr Grealy. In early June she caught a cold and had two days off work, during which time she claimed that another staff member had telephoned her at home very upset about the assessment process. She returned to work on the Saturday of a long weekend in June (10 th June). She said she was apprehensive and had not slept and began to feel "panicky" while driving to work. She said that that morning before work "things were tossing over about what had happened with work". When asked to explain she said: "James and appraisals and everything, you know." When asked what she was thinking at that time she said: "I didn't discuss it with anyone and that David had confided it (sic). So this was going through my mind." She felt sick at the end of the day and had the next day, Sunday, rostered off, but she still felt nauseous and frightened.

Her husband drove her to work on Monday, 12 June, and she decided to ask Mr Grealy to do her assessment that day, as she thought it might allay her fear, and it was a quiet day. Her evidence was as follows:

"Q. Did you tell him you would like to get it over and done with.

A. I said, 'Let's get it finished,' and he said - - -

A. I just said, 'Then it's done,' you know, and he just fiddled around at things and then he just looked and said 'Oh, I don't think so,' - just in that way, 'Oh, I don't think so.'

A. He said, 'I don't feel like it. It takes time,' and he said, 'No, I've got drinks to organise for the Queen's Birthday' and I said, 'Oh, all right then.'

She completed her shift that day, but during the following night she panicked, felt frightened and was nauseous. She was being comforted by her husband but felt unable to tell him of her real anxiety. She gave the following evidence:

"Q. What at that stage did you think you were so frightened of.

Q. That fear that you talked about, when you were thinking about James and the appraisals, did you also bear in mind what David Warner had said to you previously.

A. That was uppermost. It wouldn't go out of my mind."

She did not work after 12 June. On her original compensation claim form dated 4 July 1995 the worker claimed that up to this time "there was a gradual build-up of anxiety and tension due to information given in confidence about work appraisal". This was an obvious reference to the Warner conversation.

She saw her general practitioner, Dr Chang, the next day (13 June). He observed that she "was crying uncontrollably, feeling insecure, unable to sleep, startled easily and unable to gather her thoughts". She did not tell him about her work anxiety until a subsequent consultation on 15 June. She told Dr Chang of the allegedly confidential revelation by David Warner. In Dr Chang's words, "(s)ince the revelation, she was devastated, considering the fact that she had been working there for many years, was well liked by her colleagues and had done nothing wrong in her performance...".

At the hearing before the Review Officer there was conflicting evidence as to her diagnosis and the reasons for her condition. It was argued that various other external factors which I have not mentioned were responsible for her condition. She was first asked about these by Dr Scanlon in an examination arranged by the Corporation, on 1 November 1995, the day before she was due to return to work, having improved substantially since her initial anxiety and depression in June. She later complained to her treating psychiatrist, Dr Taylor, that she felt stressed by the personal nature of some questions he had asked her concerning other factors which led her to believe, rightly or wrongly, that her employer's intentions were to use the interview with Dr Scanlon to deny her claim. She in fact returned to work on 1 November, but did not work thereafter.

Dr Taylor's evidence in chief, in the form of a report dated 23 March 1996, included the following:

"Her history of her symptoms, my observations of her mental state at interview, and her emotional tone in describing the events since June 1995, with her responses to my questioning about physiological symptoms that may accompany such disorder, suggest that she was precipitated into this state, acutely, over the long weekend in response to the anxiety provoking stresses in the work place already described. The history further suggests that these symptoms settled gradually, when she was removed from that environment. I believe they were exacerbated on the 1 st November by a combination of her growing anxiety about her return to work, and her re-exposure to the sources of her anxiety, during Dr Scanlon's questioning. She may have not been aware of any anxiety, and not have been displaying symptoms, at the beginning of his interview. Her description of feeling 'drained' at the end suggests her anxiety did rise during that process."

Dr Taylor had spoken of four work-related causes which he considered were responsible for her condition. During his oral evidence the following occurred:

"Q. So after considering all of those other potential causes is it still your view that the substantial cause was the fear of the appraisal, the issue with Mr Grealy and the conversation with David Warner and the implementation of the appraisal.

Q. If it had not been for those factors that I have just outlined, those four factors, in your view would Mrs Keen have suffered the disability that she now suffers.

Q. And so, doctor, in your view, was employment a substantial cause of the disability.

The Review Officer accepted that evidence. In the next question he was asked:

"Q. Thank you. Now, doctor, if we could take those four factors for a moment, and I will identify them again. There's the sort of general concern regarding the appraisals in a general sense, if you like the relationship with James Grealy or the interpersonal dealings with James Grealy, the conversation with David Warner and the fact that the appraisals were actually being implemented and that Mrs Keen's appraisal was looming, is it possible to identify any one of those four factors as being the whole (or) predominant cause of a disability.

A. No, I believe they are all - it's an additive situation."

Dr Taylor's opinion was based on the history that he had taken from the worker which included the conversation with David Warner which accorded more or less with what she had given in evidence. In cross-examination he was asked to assume that the conversation was as Warner had related it, and the following question and answer occurred:

"Q. Of course if we, if you like, downplay the significance of that conversation in reality, does that not also downplay the significance of the workplace in the genesis of this lady's problems.

A. Well, it downplays that particular aspect of the significance of that particular component of the problems that she had."

Questions of causation and whether the disability arose wholly or predominantly from particular factors were important because of s30A of the Act. In most cases a disability is compensable if it "arises from employment" (s30(1)), and in most cases a disability arises from employment if it "arises out of or in the course of employment" (s30(2)(a)). The Review Officer found, however, and it was subsequently not disputed, that the worker's disability was an illness or disorder of the mind. In that case, the sole test of compensability is prescribed in s30A, which at the relevant time read:

"30A. A disability consisting of an illness or disorder of the mind is compensable if and only if -

(a) the employment was a substantial cause of the disability; and

(b) the disability did not arise wholly or predominantly from -

(i) reasonable action taken in a reasonable manner by the employer to transfer, demote, discipline, counsel, retrench or dismiss the worker; or

(ii) a decision of the employer, based on reasonable grounds, not to award or provide a promotion, transfer, or benefit in connection with the worker's employment; or

(iii) reasonable administrative action taken in a reasonable manner by the employer in connection with the worker's employment; or

(iv) reasonable action taken in a reasonable manner under this Act affecting the worker."

The only sub-paragraph of paragraph (b) relevant to this case is sub-paragraph (iii).

This Court has already held in SA Mental Health Services Inc v Margush (Unreported, Full Court, 8 September 1995, Judgment No S5246) that the worker bears the onus of establishing the matters set out in the predecessor to this section, s30(2a) of the Act. That decision is equally applicable to the section in its present form.

I would not wish to under-estimate the difficulties in applying the section to a particular fact situation. Those difficulties are not made any easier by the fact that the worker is required to prove a negative in relation to those aspects covered by paragraph (b) of the section. As the learned Chief Justice observed in SA Mental Health Services Inc v Margush (supra) at p4, the negative form of expression is explicable in terms of the limited proposition which the worker has to establish.

The worker bears the onus to prove that the disability did not arise wholly or predominantly from administrative action that is -

(a) reasonable, (b) taken in a reasonable manner, (c) taken by the employer, and (d) taken in connection with the worker's employment.

Each of those four qualifiers is an adjective or adjectival phrase qualifying the phrase "administrative action". The worker does not have to prove that the disability did not arise wholly or predominantly from any administrative action, but only that it did not arise wholly or predominantly from administrative action of the limited description given in the paragraph.

Assuming that the action can be shown to have been taken by the employer and that it is taken in connection with the worker's employment, administrative action will either be reasonable or unreasonable; it will either be taken in a reasonable or in an unreasonable manner. There are no intermediate conditions. Therefore the worker will be able to discharge the onus of proof by proving that the disability arose wholly or predominantly from administrative action which was unreasonable or which was taken in an unreasonable manner.

Of course, the worker will also be able to discharge the onus by proving that there were factors other than administrative action which were the cause of the disability, or that administrative action, whether reasonable or not, or whether taken in a reasonable manner or not, was one of a number of causes of the disability, perhaps contributing equally. In those cases the onus will have been discharged, because it can be shown that the disability did not arise wholly or predominantly from administrative action. Other possibilities may arise. It may be shown that one of the causes of the disability was administrative action, but that that cause became overshadowed by intervening events not bearing the character of administrative action. The onus again would be discharged provided, of course, that the other limb was satisfied, namely that the employment was a substantial cause of the disability.

A question arises as to whether the onus will be discharged if the worker merely proves that the disability arose wholly or predominantly from administrative action which is unreasonable in some respect, there being no necessary connection between the unreasonableness of the action and the worker's disability. Will the onus be discharged if the administrative action were taken in an unreasonable manner, but the unreasonable manner had merely a marginal connection with the disability? In other words, must there be a connection between the unreasonableness (whether of the action or of the manner in which it is taken) and the disability? It is unlikely that Parliament intended that a worker should succeed under paragraph (b) merely because the employer took action in an unreasonable manner, which unreasonable manner had no material effect on the worker's disability. The obvious policy in enacting s30A and its predecessor, s30(2a), was to restrict compensation for claims based on stress or disorder of the mind which would otherwise be said to arise out of or in the course of the employment. Such an interpretation would not achieve that object.

I have pointed out that the various qualifiers of the phrase "administrative action" used in sub-paragraph (iii) are adjectival phrases. It is only administrative action bearing those particular qualities that is relevant to the consideration of whether the disability arises wholly or predominantly from the administrative action. That suggests the need for some connection between the lack of reasonableness and the disability. The result might be different if the paragraph were drafted as a proviso or qualifier so that the disability was compensable if it did not arise wholly or predominantly from administrative action, unless the administrative action were reasonable or unless it was taken in a reasonable manner. The interpretation I favour also gains support from the fact that the administrative action bearing the necessary qualities must have been taken in connection with the worker's employment. It must not only be shown to be taken in an unreasonable manner but in an unreasonable manner and in connection with the worker's employment.

I will need to return to these considerations when I deal in more detail with the appeal which came before the Tribunal.

Based largely on Dr Taylor's evidence, the Review Officer concluded that the worker was suffering an illness or disorder of the mind, and taking all the evidence into account, she found that on the balance of probabilities the worker's employment was a substantial cause of her disability (s30A(a)). She did not consider that non work-related factors played any significant role in her condition. She said:

"I consider that the sequence of events in the last few days before the worker ceased work, as recounted by the worker, supports a strong link between work-related matters and her condition. In particular, the denial of her request to James Grealy to do her assessment, in the context of some appraisals (albeit on a trial basis) having already been done on some other staff, and in the context of her conversation with David Warner, was followed that evening by a severe state of anxiety, and in my view is an impressive sequence of events. I prefer Dr Taylor's opinion that a number of factors combined to bring about the condition, culminating in the implementation of some appraisals by James Grealy; on my view of the evidence, an additional factor also came into play, namely Mr Grealy's declining to do the worker's appraisal on the day she requested it."

The worker had thus overcome the hurdle provided by paragraph (a) of s30A. The question the Review Officer then had to consider was whether she could be satisfied that the disability did not arise wholly or predominantly from reasonable administrative action taken in a reasonable manner by the employer in connection with the worker's employment (paragraph (b)(iii)). Her conclusions on that were as follows:

"In my view, having regard to Dr Taylor's opinion, the David Warner conversation and the management style of James Grealy were contributing factors, but I agree with Ms Caucus (sic) that they are not 'administrative actions', but that the implementation of the audit process was. In view of the worker's evidence as to the events leading to the onset of her condition, ending with the commencements (sic) of assessments of some staff by James Grealy (revealed by other evidence to be a trial), and his declining to do her assessment on the particular day requested by her, which evidence I accept, I consider that factor to be the major or precipitating one. I accept the general proposition that the employer was reasonable in implementing an individual assessment procedure to assist it in meeting the required standards of nursing home care. It was also a reasonable approach to commence with a trial or pilot involving a small number of staff to test the audit competency tool.

I consider that the implementation of the audit process constitutes 'reasonable administrative action'. It is therefore necessary to determine whether it was carried out in a reasonable manner. If not, the worker's condition is compensable.

It was the worker's evidence that, from the information available to her, the audit procedure proper commenced with James Grealy conducting an assessment of a number of staff, and that some of those staff expressed disquiet to her, including one who rang her at home quite distressed. This occurred in the context of written information about the process having gone missing from the staff desk where it was supposed to be available for perusal by staff. This latter point is supported by the evidence of Ann (sic) Henderson. I accept the worker's evidence on these matters, which led her to being ignorant of the trial nature of the initial assessments. I do so because I do not consider that she was lying or consciously reconstructing her evidence and also because that evidence was supported by the oral evidence of David Warner. The brief written statements of Ms Sutcliffe, Ms Dorigo and Ms Pettinger do not constitute evidence that they understood that the tool was being trialled - only that they were comfortable with the way it was actually carried out. I note the written statement of Toni Venner that four nurse assistants 'volunteered to participate in a trial of the proposed assessment process' but she also states that she was 'dubious' about James Grealy doing the assessment. I do not think there was any conscious intent by the employer to hoodwink the staff, but given the timing of the introduction of the process, shortly after the resignation of the one strong staff voice of opposition to it (in Liz Hill), I think that particular sensitivity was required to ensure that staff were fully aware of the nature of the process to be adopted. I conclude that not all staff understood clearly that the initial assessments constituted a trial and that the full process would not commence until the staff nominees had been consulted. I also find that there was apprehension amongst some staff about James Grealy doing the assessments.

Not without hesitation I conclude that the employer's action in commencing the audit in the manner it did was not reasonable. Hence, the worker has succeeded in demonstrating that her disability did not arise from a reasonable administrative action taken in a reasonable manner."

Accordingly, the Review Officer held that the worker was entitled to payment of compensation.

In summary, the Review Officer held that the implementation of the audit process was "administrative action", and that among others, that factor was the "major or precipitating one" in relation to her disability. That phrase is foreign to the Act, but I infer that the Review Officer was intending to conclude that the disability arose predominantly from that administrative action. She also held that that administrative action was reasonable but that it was carried out in an unreasonable manner.

As to the manner of implementing the audit said to be unreasonable, the Review Officer's material findings and reasoning seem to have been as follows:

The assessments conducted prior to the worker's disability arising were by way of trial only.

The worker was aware that some assessments had occurred.

The worker was ignorant of the fact that those assessments were by way of trial, and believed that they were part of the audit procedure proper.

Not all staff understood that the initial assessments constituted a trial.

There was a heavy obligation on the employer to ensure that staff were aware of the nature of the process and that the initial assessments were by way of trial.

The circumstances giving rise to that heavy obligation were:

(a) that the implementation followed the resignation of Ms Hill who had been a strong voice of opposition to the process, and

(b) the fact that the assessments were being conducted by Mr Grealy, about which some of the staff were apprehensive. [I do not understand the reference to the staff being apprehensive about Grealy doing the assessments as constituting a finding that that fact constituted an unreasonable manner of implementing the audit because it was done by Mr Grealy. The Review Officer refers only to apprehension of some of the staff, and I therefore conclude that that was merely another factor which required particular sensitivity.]

The failure properly to inform the staff that the initial assessments were by way of trial constituted a failure by the employer to take the administrative action in a reasonable manner.

The Corporation's appeal to the Tribunal was on one ground only as follows:

"The Review Officer was wrong in law and in fact in determining the employer's administrative action in relation to the 'audit' process was not carried out in a reasonable manner by the employer."

In other words, although they had been issues before the Review Officer, the Corporation was not challenging the finding that the worker had an illness or disorder of the mind or that the employment was a substantial cause of the disability. The only question raised by the appeal was the reasonableness of the manner of going about the audit process.

On the hearing of the appeal the worker naturally sought to justify the Review Officer's conclusion on that topic, but also argued that the disability did not arise wholly or predominantly from the administrative action in question. The question of reasonableness, it was submitted, need not arise because the administrative action, insofar as it was a contributing cause of the disability, was not a predominant one. I should say that that is my understanding of the argument and as it was explained to us by Mr Durkin, counsel for the worker. Although the Tribunal's summary of the argument is a little confusing, I think it accords with the summary I have given. However, whether it was the way it was put before the Tribunal or whether it was due to some misunderstanding on the part of the Tribunal, it seems to have become confused in the mind of the Tribunal with questions concerning what was a substantial cause of the disability and whether, in the event that the administrative action was not a predominant cause, the employment was a substantial cause at all. As I have already observed, that was not an issue before the Tribunal, and related to paragraph (a) of s30A. I shall return to how the Tribunal dealt with these arguments in due course. It only remains to observe at this stage that the worker did not pursue an argument put to the Review Officer that the audit process was not administrative action.

Before considering how the Tribunal dealt with the two main arguments, it is necessary to proceed with an understanding both of the nature of the proceedings before the Review Officer, and of the nature of the role of the Tribunal in hearing an appeal under the former s97 of the Act.

By s88(1)(a) of the Act the Review Officer was required to act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms. By s88(1)(b) she was not bound by any rules of evidence, but was able to inform herself on any matter in such manner as she thought fit. In this case the Review Officer had before her written statements of most of the witnesses who were called, and also had reference to written statements, on which she relied, from persons who were not called. I refer in particular to the brief written statements of Ms Sutcliffe, Ms Dorigo and Ms Pettinger, and to the more expansive statement of Toni Venner. Whilst the Review Officer was not bound by any rules of evidence, the authorities referred to by King CJ in General Motors-Holden's Automotive Ltd v Kalogerinis [1994] SASC 5064; (1994) 62 SASR 492 at 494-495 indicate that such rules cannot be set aside entirely without risk of causing grave injustice. The extent to which they may be set aside will depend upon the circumstances, but generally speaking it would be inappropriate to make findings on disputed facts affecting the outcome of the case if those findings were based on written statements admitted under s88(1)(b), and the makers of those statements were not cross-examined on them.

The appeal to the Tribunal was brought under the then s97 of the Act. The Tribunal was likewise not bound by any rules of evidence. The relevant parts of s97 were as follows:

"97. (1) An appeal lies to the Tribunal against a decision by a Review Officer on a review. ... (4b) The Review Officer must, as soon as practicable after receiving notification [of an appeal] under subsection (4a), send to the Registrar of Review Authorities -

(a) any application, documents, written submissions, statements, reports, and other papers lodged with, or received by, the Review Officer during the course of the earlier proceedings; and

(b) any relevant exhibits in the custody of the Review Officer; and

(c) a copy of any notes of evidence made by or at the direction of the Review Officer during the course of the earlier proceedings; and

(4c) The Tribunal may, on an appeal under this section -

(a) examine any papers, exhibits and notes submitted under subsection (4b) and draw any conclusions of fact from them it considers proper;

(b) direct the Review Officer to furnish a report (which must be made available to the parties to the appeal) on any aspect of the subject matter of the appeal.

(4d) Subject to subsection (4e), the Tribunal has a discretion to rehear the whole or any part of the evidence taken before the Review Officer, or to take further evidence.

(4e) The Tribunal must, on the application of a party to the appeal -

(a) rehear evidence taken before the Review Officer if the evidence is relevant to the appeal and the record of the evidence is incomplete or inaccurate in a material particular;

(b) hear oral evidence relevant to the appeal from a witness from whom evidence was taken in documentary form by the Review Officer;

(c) take further evidence if the evidence is relevant to the appeal and the party seeking to introduce it could not reasonably be expected to have done so in the proceedings before the Review Officer;

(ii) there is some substantial reason for admitting the evidence in the interests of justice.

(4f) A party must be afforded a reasonable opportunity to examine or cross-examine witnesses appearing before the Tribunal.

(5) On an appeal under this section, the Tribunal may exercise any one or more of the following powers -

(a) confirm, vary, set aside or reverse the decision under appeal;

(b) refer the subject matter of the appeal, or any matter arising in the course of the appeal, back to a Review Officer with directions or suggestions the Tribunal considers appropriate;

The appeal to the Tribunal is an appeal by way of rehearing on the documents: Simpson Ltd v Arcipreste [1989] SASC 1951; (1989) 53 SASR 9 at 13. Subsections (4d), (4e) and (4f) of s97 set out the circumstances under which further evidence may be led before the Tribunal. There was apparently no application in this case to hear oral evidence from any of the persons whose evidence was in documentary form before the Review Officer.

In the absence of any oral evidence before the Tribunal, where the findings of fact of the Review Officer are based on the credibility of witnesses, those findings will not be set aside by the Tribunal merely because the Tribunal thinks that the probabilities are against that finding: Devries v Australian National Railways Commissioner (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479.

Brunskill v Sovereign Marine and General Insurance Co Ltd [1985] HCA 61; (1985) 59 ALJR 842 gave effect to a long line of cases which recognise a distinction between an appeal on a question of fact which depends on a view taken of conflicting testimony, and an appeal depending on inferences drawn from uncontroverted facts or from primary facts properly found by the primary Tribunal. Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 makes it clear that the appeal court may properly draw its own inferences from those primary facts.

In this case, whether administrative action is taken in a reasonable manner is very much a question of objective fact, and is to be determined against the ordinary standards of reasonable employers in all the circumstances of the case. Whether administrative action is reasonable or is taken in a reasonable manner depends first on the finding of the primary facts as to what occurred in the taking of the administrative action, namely what decision was made, who made it and why it was made, what was done, what was omitted to be done and the factual background against which the decision was made or implemented.

Although it is a finding of fact as to whether the action was taken in a reasonable manner, that fact depends in part on inferences to be drawn from the primary facts, on the weight to be given to particular primary facts and on the fact finder's assessment of what is reasonable in all those circumstances. It is a jury question committed, in this case, to the Review Officer. However, the determination as to what is reasonable in the established circumstances, being in the nature of an inference to be drawn from the primary facts, is a factual conclusion that the Tribunal, in most cases, will be able to make for itself. Of course, the Tribunal should give respect and weight to the finding reached by the Review Officer on that topic, but in the end, it is open to the Tribunal to reach its own conclusion on the topic and to give effect to it: Warren v Coombes (supra) per Gibbs ACJ, Jacobs and Murphy JJ at 551.

The position of the Tribunal in this case is not unlike that of an appellate body hearing an appeal against a determination that a dismissal is harsh, unjust or unreasonable. Save in exceptional circumstances the appellate body will act on the primary facts found by the Tribunal at first instance but will nevertheless be free to determine for itself the factual question of whether the dismissal was harsh, unjust or unreasonable in those factual circumstances: Musicians' Union v Warner (1985) 52 SAIR 202. It is also not unlike an appeal from a decision as to whether a person can conveniently belong to an industrial organisation, where the appellate body can take fresh evidence and make such order as it thinks fit and may confirm, vary or quash the decision appealed against: Public Service Association of SA Inc v Federated Clerks' Union of Australia [1991] HCA 33; (1991) 173 CLR 132. In that case Brennan J held at 140 that the appellate body, subject to the granting of leave to appeal, could determine for itself that factual question as to whether a person could conveniently belong to the organisation.

Of course, this is not an appeal from a discretionary judgment to which different considerations apply: House v The King (1936) 55 CLR 499 per Starke J at 503; Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513.

The Tribunal was therefore bound by the Review Officer's primary findings of fact, particularly where they were based on the credibility of witnesses, unless those findings were quite perverse or were inconsistent with facts incontrovertibly established by the evidence or were glaringly improbable: Brunskill v Sovereign Marine and General Insurance Co Ltd (supra) at 844. The Tribunal was, however, able to reach its own conclusion as to the reasonableness of the manner in which the action was taken.

The Decision of the Tribunal - Reasonableness of the Manner of Implementation

On the issue raised by the Corporation's appeal to the Tribunal, namely the reasonableness of the manner of implementation of the audit process, the Tribunal disagreed with the decision of the Review Officer and found in favour of the Corporation. Grounds 2 to 5 inclusive of the appeal before this Court allege various errors of law by the Tribunal in dealing with this issue. I will address those in my consideration of the Tribunal's decision on the issue.

The learned Deputy President constituting the Tribunal analysed in some detail the passage from the Review Officer's decision which I have quoted containing her finding that the manner of implementation of the scheme was unreasonable. I have already stated what I consider, in summary form, to have been the material findings and reasoning of the Review Officer. The Tribunal considered first that the Review Officer had misquoted the evidence or had misapprehended the evidence, and that that called for the application of Churchill v Badenoch's Transport Pty Ltd and Devine (1971) 1 SASR 63, namely that there were "errors of fact or reasoning in the reasons for judgment... which could have affected the result" (per Bray CJ at 65). Secondly, the Tribunal considered that an incorrect standard of reasonableness had been applied. Before us it was argued that, as a matter of law, neither of those conclusions was open to the Tribunal.

In relation to the first ground, namely the alleged misquotation or misapprehension of the evidence, the learned Deputy President attacked a number of the Review Officer's findings.

He first attacked the finding that some of the staff "expressed disquiet to (the worker), including one who rang her at home quite distressed". The Tribunal considered that what other members of staff had told the worker was hearsay and inadmissible, and that accordingly the Review Officer had wrongly relied on such evidence. However, there was no analysis by the Tribunal of the purpose for which that evidence might have been or was used by the Review Officer. If it could be shown that the content of those discussions with the worker was used by the Review Officer to prove the fact that members of the staff were apprehensive about Mr Grealy performing the assessments, it was plainly hearsay evidence used to establish one of the facts relevant to the reasonableness of the manner of implementation of the scheme. That was a fact in issue, and notwithstanding the provisions of s88(1)(b) of the Act, it would have been inappropriate for the Review Officer to have used such evidence to establish that fact where that was contrary to other acceptable evidence which tended to prove otherwise. Only in those circumstances would the criticism of the Review Officer by the Tribunal have been justified.

However, there was no suggestion that the Review Officer did use the content of such conversations for such a purpose. There was other evidence which established the fact that staff had reservations about the assessments being conducted by Mr Grealy. That came from Ms Henderson herself and from other material properly before the Review Officer. The only apparent relevance of the conversations, at least in the eyes of the Review Officer, was that the fact of the conversations was one of the subsidiary facts which supported the finding made by the Review Officer that the worker did not in fact know that the assessments were being performed by way of trial. That finding itself was based principally on the Review Officer's acceptance of the truth of the worker's evidence. If, as seems to be the case, the Review Officer was relying on those conversations for no more than that, then the criticism by the Tribunal of their use by the Review Officer was not justified.

The next attack on the use of evidence by the Review Officer concerned the reliance of the Review Officer on the written statements of Ms Sutcliffe, Ms Dorigo and Ms Pettinger as not constituting evidence that those members of staff understood that the tool was being used as a trial. That evidence was plainly used in support of the finding that not all staff knew that the assessments were by way of trial only. A fair reading of the Review Officer's reasons suggests that in fact she did rely on those statements for that purpose. Whether the staff knew that the assessments were being conducted only as a trial was a fact in issue, and was crucial to the ultimate finding by the Review Officer that the manner of implementation of the scheme was unreasonable. The statements concerned were only very brief written statements by participants in the process who, by their statements, expressed satisfaction with the process and with the outcome. The statements did not address the question of the state of knowledge of those parties of whether it was a trial. The parties themselves were not called, either before the Review Officer or the Tribunal. There was even evidence, in the form of letters of thanks to those parties, the text of which has been quoted above, from which it might be inferred that they were aware that it was a trial. Furthermore, the written statement of Ms Venner was before the Review Officer. That was a much more elaborate statement. She was one who had also participated in the assessment, and whose statement included the following passage:

"During the course of the consultative process, 4 nurse assistants volunteered to participate in a trial of the proposed assessment process..."

That statement was tendered by counsel for the Corporation (AB429). Ms Venner was not required to be called before the Review Officer, and I infer that the worker did not apply to have her called before the Tribunal pursuant to s97(4e)(b) of the Act. Although no doubt the written statement was received by the Review Officer exercising powers under s88(1)(b) of the Act, the statement gains standing by the fact that the worker did not seek to have her called. The strongest inference to be drawn is that the worker did not dispute the statement. That therefore became strong evidence against the finding actually made by the Review Officer. To the extent that the Review Officer sought to infer from the very brief statements to which she referred that other staff were not aware of the fact that the assessments were being conducted by way of trial, the Tribunal was justified in its criticism of the Review Officer. It was impossible to draw any inference from these statements as to what the state of knowledge of those participants was as to whether the process was a trial.

The third criticism of an evidentiary nature was of the Review Officer's reliance on the statement of Ms Venner to establish that she was dubious about Mr Grealy doing the assessment. For the reasons I have already mentioned, the statement was plainly admissible, and because of the failure to require Ms Venner to be called, her statement could be used to establish that fact. However, the Tribunal also criticised the Review Officer for failing to act on that part of Ms Venner's statement which said that despite that reservation, she had no problems with any other aspects of the proposed assessment process, and by which she also indicated her apparent acceptance that Mr Grealy would have to do the assessments. In my opinion the Review Officer was entitled to rely on the statement that Ms Venner was "dubious" about Mr Grealy doing the assessment. I shall return to the other criticism of the Tribunal about the failure to refer to other aspects of the statement.

There were other criticisms of the Review Officer's reference to some of the other factual issues, but in my opinion such criticisms were not relevant to the issue decided by the Review Officer.

Therefore, in relation to the evidentiary points, the one criticism of the Review Officer by the Tribunal which I consider to be valid, namely the Review Officer's reliance on the three short written statements, did call in question the Review Officer's finding that members of staff were unaware of the trial nature of the assessments. That was an important part of the Review Officer's process of reasoning, and was the key matter on which the Review Officer considered the manner of implementation of the scheme to be unreasonable. Therefore, although I do not agree with all the criticisms of the Review Officer made by the Tribunal, that one justified the Tribunal, if there were nothing else, in allowing the appeal and either making its own findings in respect of the reasonableness of the manner of implementation, or alternatively of remitting the matter to the Review Officer to reconsider the question in the light of the evidence on which she could rely.

However, there was something else which rendered that criticism, although valid, somewhat irrelevant in the circumstances. That brings me to the second ground on which the Tribunal found that the Review Officer's decision as to the reasonableness of the manner of implementation could not stand. That is, that the Review Officer used a different standard of reasonableness from that which the Tribunal considered she should have used. The Tribunal attacked the passage of the Review Officer's decision whereby the Review Officer said that she accepted the worker's evidence which led to her being ignorant of the trial nature of the initial assessments. The Tribunal did so by saying that the fact of whether the assessments were or were not a trial was irrelevant to the question of whether the manner of conducting the review was reasonable. According to the Tribunal, what was relevant, and what the Review Officer had not relied on, was the apparent satisfaction with and approval of the process by those who had taken part in it. Furthermore, in criticising the Review Officer's failure to rely on that part of Ms Venner's statement which said that she did not have any problems with other aspects of the process, the Tribunal was in effect saying that the Review Officer had failed to take into account that relevant evidence.

In other words the Tribunal was saying that the fact that the assessment was being conducted by way of trial was not relevant to the reasonableness of the manner of implementation of the scheme. By necessary implication the Tribunal was also saying that whether the staff knew it was a trial or not was also not relevant to the question of reasonableness of implementation. At the same time the Tribunal was saying that what was relevant, and what the Review Officer had overlooked, was the degree of satisfaction with the process expressed by other members of the staff, through the written and oral evidence of Mr Warner and Mr Henderson, supported by the other written statements in that regard which had apparently not been challenged by the worker. The Tribunal therefore considered that the "particular sensitivity" which the Review Officer considered to be necessary in informing the staff that the assessments were merely being conducted by way of trial was not, in those circumstances, required. The Tribunal criticised the use of the phrase "particular sensitivity" as being a sociological test, idiosyncratic to the Review Officer. I doubt whether I would have used those terms to describe the Review Officer's standard of reasonableness. But in reality, the Tribunal was saying that, whether the manner of implementation was reasonable, there were factors which the Review Officer wrongly took into account or to which she gave undue weight, and there were other factors which the Review Officer did not take into account or to which she gave too little weight. The view of the Tribunal was that in all the circumstances the appraisal process was carried out in a reasonable manner.

Although that was a factual finding, it was a finding of the type which the Tribunal was able to make in substitution for that of the Review Officer. It was in the nature of an inference or a secondary finding, and did not require a reversal of any of the relevant primary findings of fact of the Review Officer. It was a factual conclusion to which the Tribunal was entitled to come after giving due weight and consideration to the view of the Review Officer, and after applying to the relevant primary facts what it considered to be the proper standard of reasonableness. Accordingly, in my opinion, the Tribunal was entitled to find that the manner of implementation of the scheme was reasonable in all the circumstances, and that the worker had failed to discharge the onus of proving that the reasonable administrative action was not taken in a reasonable manner by the employer in connection with the worker's employment. That conclusion was not dependent upon the Tribunal's criticism of the Review Officer's use of evidence. That criticism, in the circumstances, became irrelevant.

Accordingly, in my opinion the worker does not succeed before us on her arguments challenging the reversal of the finding of unreasonableness by the Tribunal.

The Tribunal's Decision - the Worker's Alternative Argument

I come to the alternative argument of the worker before the Tribunal by which the entitlement to compensation was defended, namely that the worker's disability did not arise wholly or predominantly from the administrative action identified by the Review Officer to have been taken in an unreasonable manner. The rejection of this argument formed the basis of ground 1 of the appeal in this Court.

It will be recalled that the question arising under paragraph (a) of s30A of the Act, namely whether the employment was a substantial cause of the disability, was not in dispute before the Tribunal. It had not been put in issue by the Corporation on the appeal before the Tribunal. What I understood to be argued by the worker was a challenge to the Review Officer's observation that the implementation of the audit process was the "major and precipitating" factor in her disability, which I have taken to be a finding that the disability arose predominantly from the administrative action consisting of the implementation of the audit process.

As I have already mentioned, Dr Taylor's evidence referred to other causative factors, including the conversation with David Warner and the worker's perceptions of the management style of Mr Grealy. The Review Officer had described these factors as "contributing factors". All had contributed to the unchallenged finding that the employment was a substantial cause of the disability.

The Tribunal dealt with this argument, in relation to the Warner conversation, by holding that as the Review Officer had preferred the version of Mr Warner, there was nothing that he said that could have been productive of the disability, and that furthermore, the conversation in any form was nothing to do with "employment". In relation to the perceptions of Mr Grealy, the Tribunal analysed the evidence which gave rise to the worker's apprehensions about Mr Grealy and held that they could be characterised as arising out of employment. However, the Tribunal went on to hold that they were not "the substantial cause" of the disability. The substantial cause was the audit process and the worker's perception of it.

The Tribunal then considered a number of events said to be causally relevant to the worker's disability, and dismissed them all as either having no causal effect, as being not known to the employer, as being not work-related or not otherwise generating any obligations on the employer's part.

In this regard I consider that the Tribunal erred in a number of material respects. In the first place, in dealing with these issues the Tribunal at no stage asked itself the relevant question as to whether the disability arose wholly or predominantly from the administrative action on which the Review Officer had relied. The Tribunal seemed more concerned to have posed the question as to whether a particular stated cause of the disability was anything to do with the worker's employment. That was a question relevant to the issue raised under paragraph (a) of s30A - a matter which was not in dispute before the Tribunal. When dealing with the worker's apprehensions about Mr Grealy, the Tribunal considered that they were not "the substantial cause" of the disability. Not only was that a phrase which was more appropriate to consideration of matters under paragraph (a) of the section, but it was also a misstatement of paragraph (a), as the only question under that paragraph was whether employment was a substantial cause of the disability. The question of whether a particular cause of the disability was the substantial cause was not relevant to a consideration of matters under paragraph (b) of the section. In so far as the Tribunal dismissed a number of stated causes as having no causal effect at all, those observations were made without reference to and were contrary to the medical evidence which the Review Officer had accepted.

Therefore, in respect of the alternative argument put by the worker on the appeal before the Tribunal, the proceedings, in my opinion, miscarried in that the Tribunal failed to ask the right question. It also made findings of fact which not only were contrary to the Review Officer's primary findings of fact and with which the Tribunal was not at liberty to interfere, but which were also contrary to the evidence. The real question, namely whether the disability arose wholly or predominantly from the administrative action (whether reasonable and taken in a reasonable manner or not) was never addressed. For this reason the appeal must be allowed.

The question then arises whether the matter should be remitted to the Tribunal to determine the question, or whether it is possible for this Court in the context of this appeal to give a definitive answer.

The appeal to this Court is only on a question of law. This Court cannot reach its own conclusion on the facts - even the fact as to whether the disability arose wholly or predominantly from a particular cause. However, the argument of the worker before the Tribunal was, or at least included, an argument that there was no evidence upon which the Review Officer could find that the administrative action was the factor from which the disability wholly or predominantly arose. That is a matter of law, and if the only conclusion available to the Tribunal was that there was no such evidence, the Tribunal failed to reach that conclusion and erred in law in so doing. This Court can then properly substitute that conclusion for that wrongly reached by the Review Officer.

No-one in evidence had suggested that the disability arose wholly from any one particular cause. The Review Officer accepted the evidence of Dr Taylor as to four causes of the disability. Those four causes or factors were the worker's general concern regarding the appraisal scheme, her inter-personal relationship with Mr Grealy, the Warner conversation and the fact that appraisals were actually being implemented. She also accepted Dr Taylor's opinion that those factors combined to bring about the condition. In the context of her finding under paragraph (a) of s30A the Review Officer added one more factor, namely Mr Grealy's declining to do the worker's appraisal on the day she requested it. I have already noted that Dr Taylor was unable to attribute predominance to any of the four causes which he identified. When asked to assume that the Warner conversation was as Warner described it he did not dismiss that as a factor but said that it downplayed the significance of that particular component of her problems. He certainly did not identify as predominant the administrative action on which the Review Officer had relied as having been taken in an unreasonable manner. There was no evidence from any other person, and certainly from an expert in the field, as to the predominant cause of the disability.

Absent such evidence, it seems to me that the Review Officer was bound to find that the implementation of the assessment scheme (the administrative action) was not the factor from which the disability predominantly arose. There were four or five stated causes of the disability. The evidence did not show that any one of them was predominant. In those circumstances the worker had discharged the onus of proof that her disability did not arise predominantly from the administrative action on which the Review Officer relied. She did not have to go as far as to prove that some other factor was the predominant one, let alone prove that it was the substantial cause of the disability. If she had proved that one of the other factors was the predominant one, she would undoubtedly have succeeded under paragraph (b). However, that was not necessary. It was enough that none of them was shown to be predominant. Therefore, on that ground alone, I would hold that the conclusion that the disability arose predominantly from the administrative action was not open to the Review Officer, and that the Tribunal should also have so held.

Whilst it is not necessary for the decision, I consider that it would have been open to the Review Officer to hold that the Warner conversation and the worker's perception of Mr Grealy combined to be the predominant factor from which the disability arose. I have already referred to the sequence of events referred to by the Review Officer in her finding that the employment was a substantial cause of the disability. All the worker's evidence (which the Review Officer accepted) pointed to these factors causing her the greatest anxiety leading up to her ceasing work. She had identified these two factors as being what she was afraid of, and the Warner conversation as being "uppermost" and not going out of her mind.

The Review Officer may also have misdirected herself by merely asking the question whether the implementation of the audit process was the major or precipitating event or, as the Act requires, the predominant event. I refer back to my discussion on the effect of paragraph (b). It was not enough to ask merely whether the administrative action in the form of the implementation of the process was the event from which the disability predominantly arose. The question to be asked was whether the administrative action bearing the quality of being taken in an unreasonable manner was the predominating factor. In other words, there had to be a link between the unreasonable manner of the implementation (in this case the failure adequately to inform the staff of the trial nature of the scheme) and the disability. There was certainly no evidence to support that as being the predominant factor, and had the Review Officer asked herself the right question, she may not have been misled into the finding that she made.

I also referred earlier in these reasons to the possibility of predominant factors changing from time to time. It seems that the worker was almost fit to resume work on 1 November 1995. On that day she saw Dr Scanlon at the request of the Corporation. Dr Scanlon's evidence was not only rejected by the Review Officer in favour of that of Dr Taylor, but Dr Taylor's unchallenged evidence was that the worker became considerably worse as a result of that interview. There was no consideration by the Review Officer, or by the Tribunal, as to whether the disability by then arose predominantly from some other factor related to the interview with Dr Scanlon.

It is not necessary to make any particular findings about that, and it would be improper to do so. I need only content myself by saying that there was no evidence on which the Review Officer could reach the conclusion that the disability arose predominantly from administrative action bearing the necessary quality required by paragraph (b) of s30A. It follows that if the Tribunal had also asked itself the right question on the alternative argument put by the worker, the Tribunal would, as a matter of law, have to have given the same answer. In my opinion the worker succeeds in the appeal on this ground.

I would therefore allow the appeal, set aside the determination of the Tribunal and in lieu thereof order that the appeal against the determination of the Review Officer be dismissed. I would wish to hear the parties as to costs.