Solicitors for the appellant: Pamela Coward and Associates

Counsel for the respondent: Mr R. Hulme QC and Mr D.G. Nock

Solicitors for the respondent: Mallesons Stephens Jaques

Paragraph 3 of the orders made by the trial judge be set aside, and, in lieu thereof, it be ordered that the matter be remitted to the Administrative Appeals Tribunal to be heard and decided again with or without the hearing of further evidence.

The respondent pay the appellant's costs of the appeal.

Note: Settlement and entry of orders is dealt with in order 36 of the Federal Court Rules.

This is an appeal from a judgment of a single judge of the Court. The learned trial Judge allowed an appeal from a decision of the Administrative Appeals Tribunal which had held that the appellant, Beverley June Boyd, was entitled to compensation under the Compensation (Commonwealth Government Employees) Act 1971 (Cth) ("the Act") in respect of an aggravation of a stress-related psychiatric illness, reactive depression, as Ms Boyd's employment with the Australian Industry Development Corporation ("the Corporation") had been a contributing factor. The trial Judge held that it was not open to the Tribunal, on the material before it, to conclude that Mrs Boyd's employment by the Corporation contributed to the aggravation of the disease from which she suffered. His Honour ordered that the appeal be allowed, that the decision of the Tribunal be set aside and that a determination made on 17 September 1987 by a delegate of the Commissioner for Employees' Compensation refusing compensation be affirmed.

2. Ms Boyd, although an officer of the Public Service covered by the Officers' Rights Declaration Act 1928 (Cth), spent many years working in positions outside the Public Service. She held a number of positions as private secretary to Ministers. In 1971, Ms Boyd joined the staff of the Corporation as private secretary to its first Chief Executive, Sir Alan Westerman. In 1977, Mr J.R. Thomas was appointed as Chief Executive and Mrs Boyd became his executive assistant. Ms Boyd suffered an underlying psychiatric condition described by medical practitioners as reactive depression and from time to time after 1977 symptoms of this condition became manifest. From 1978 to 1981 Ms Boyd suffered stress related gynaecological problems. In 1984 she saw a doctor concerning stress and discussed with Mr Thomas possible retirement, but took sick leave instead.

3. Mr Thomas was to retire as Chief Executive of the Corporation at the end of 1986. From the middle of 1986, Ms Boyd demonstrated a number of symptoms which may have been stress-related. The trial Judge noted the following facts:-

"In July 1986, she considered she needed a break. She informed

Mr Thomas that she was physically and mentally exhausted and

that, unless she had some time off, she would not be able to

cope. She proceeded on a week's sick leave. After her return

to work she continued to have problems with her health and

consulted Dr Foo on 19 August, 10 September and 10 October

1986. Those visits concerned a hormonal problem. In

November 1986 an incident occurred at work involving a

momentary loss of memory and consequent distress. At about

this time the respondent was concerned that Mr Thomas had

not discussed with her a revised remuneration package and this

led, in her words, to `an altercation' with Mr Thomas on the

afternoon of 4 December 1986. She had also had a

confrontation with another member of the staff on the morning

of that day. During the evening of 4 December 1986 she

consulted Dr Foo, his notes recording that the visit was in

relation to a rash on her hands and other parts of her body.

The doctor's clinical notes record that in answer to questions

from him, the respondent said she was `under stress at work

mainly with "boss"'. The doctor did not consider her unfit

for work.

4. On Friday, 5 December 1986 she attended work but, by arrangement, left early in order to drive to Wauchope to attend her brother's wedding, intending to return to work on the following Monday. She had planned to commence two weeks' recreation leave later in December 1986. She knew that Mr Thomas was to retire towards the end of the following week. Once the date of Mr Thomas' retirement became known at the beginning of October 1986, other employees of the Corporation inquired of the respondent what she was going to do once Mr Thomas had left. The respondent said that she gave flippant responses to those inquiries. She gave the following evidence:

`I had neither the time nor the

mental capacity at that time to do

anymore than hold that job that I

was doing and, as for planning

for the future, it was down the

track and always I knew I had

long-service leave that would get

me through any time that I

needed to look to the future.'

5. The respondent became ill during the week-end and on Monday, 8 December 1986 she consulted Dr W.G. Hain at Wauchope. He diagnosed bronchitis and certified that she was unfit for work until 13 December 1986. On 15 December 1986 Dr Hain issued a further certificate of unfitness for work until 29 December 1986.

6. As she was still feeling unwell, the respondent took a few days' recreation leave before returning to work on 5 January 1987.

7. Asked about her health at that time, the respondent said:

`I was still ill. I still had the bad

cough. I was just so weak and I

could not think straight. I could

not remember. I could not

transfer dates from one side of

the piece of paper to another and

I was worried about all the

things, the normal things, that

had not got done on the job

during November. I worried

about those while I was away ill.

I was just holding together.'"

8. On Ms Boyd's return to work on 5 January 1987, she was informed by the newly appointed Chief Executive of the Corporation, Mr O'Sullivan, that she would not be appointed as his executive assistant and that her employment with the Corporation would terminate. Ms Boyd suffered a reaction to that news such that, effectively, she did not work thereafter, save for some minor tidying up. As Ms Boyd was entitled to sick leave, her employment was not terminated until later in 1987. On or about 10 August 1987, Mr O'Sullivan wrote to Ms Boyd stating that her employment would be terminated as from 10 September 1987. Thereupon Ms Boyd instituted proceedings in the Supreme Court of the Australian Capital Territory which, on 12 November 1987, were resolved by agreement on terms which included a declaration that her employment with the Corporation terminated on 23 October 1987 on the grounds of redundancy.

9. Necessarily, these facts gave rise to the question whether the aggravation to Ms Boyd's psychiatric illness which undoubtedly occurred was an aggravation which was contributed to by her employment or only a reaction to employment with the Corporation ceasing. Section 29 of the Act requires that the employment be "a contributing factor to the ... aggravation" of the disease. This criterion is not satisfied if the relevant cause of the aggravation is not the employment itself but its cessation, the state of unemployment. Thus, in Australian Telecommunications Commission v Tzikas (1985) 5 AAR 173, the Court rejected the view that matters, such as the change in status resulting from a cessation of earning money, the attention from the family resulting from unemployment, the distaste of work due to a background and upbringing in Greece and resentment toward the former employer from the loss of income and the delays which occurred in the processing of compensation, were grounds which in themselves constituted a contribution by the former employment to an aggravation of the employee's mental illness. At pp 194-5, Sweeney and Woodward JJ. said:-

The first (error of law) relates to the question whether any

employment by the Commonwealth is still a contributing factor of any

relevant aggravation or acceleration of the respondent's disease,

within the meaning of s 29(1) of the Act. On this issue, we believe

the Tribunal led itself into error by adopting the word `sequelae',

apparently used by one of the medical witnesses, without considering

whether the factors listed were truly the results or consequences of

the former aggravation and acceleration, which it must be remembered

had resulted from noise and stress, rather than the manifestations or

results of her underlying disease. The first three factors (above)

listed flow not from the respondent's employment with Telecom, but

from her cessation of that work; they are not affected in any way by

the nature of her former work, but arise simply from the fact of

previous employment operating on a person of her temperament,

background and family circumstances. The fact that she feels her

status has decreased as a result of lower earnings, but she finds not

working congenial, and enjoys the increased attention from her

family, can hardly be said to flow from, or have been contributed to

by, her employment by the Commonwealth. This issue of causation was

simply not considered by the Tribunal, which assumed a causal

connection because these things flowed, in a medical sense, from the

cessation of work, which was in turn contributed to by employment

factors. The fourth factor (above) listed by the Tribunal is more

difficult to resolve than the others. In our opinion, the resentment

of a sick mind, directed towards former conditions of employment, if

it aggravates or accelerates the disease, and thus contributes to

incapacity, is capable of leading to a finding under s 29(1) of the

Act that the employment is still contributing to the aggravation or

acceleration. However we believe that resentment about lower

earnings and delays in litigation cannot be said to have been

contributed to by the employment. Such considerations are as remote

from the employment as the other factors, such as relief at not

having to work, dealt with earlier."

10. Smithers J. expressed a similar view. For example, at p 187, his Honour said:-

"The employment caused the respondent to stop work. Her

ceasing to work is said to have caused loss of family esteem

even though apparently she succeeded in obtaining an award of

compensation. In my opinion the connection between the

employment and the aggravation of the neurosis breaks down at

the intermediate step. The loss of esteem was due to events of

a different order from the events contributed by the

employment and its incidents. It arose from the personal

attitudes of the family to legal situations which had arisen from

the employment. Those attitudes were not contributed to by

Telecom."

11. However, their Honours in Tzikas' case did not hold that whatever is said or done at the time of termination of employment or in the course of events leading up to the termination of employment cannot play a material part in a sequence of events which constitutes a chain of causation sufficient to amount to a contribution by the employment to an aggravation of an underlying medical condition. In this area as in others, concepts of causation are involved. The issue is whether employment contributed to the aggravation. A practical, commonsense approach is required. As McHugh J.A. said in Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310 at p 350:-

"In principle, therefore, there is no reason why the legal theory

of causation should be concerned with any question other than

whether a particular act or condition was one of the conditions or

relations necessary to complete the set of conditions which

represent the total cause. This is the basis of the `but for'

test of causation which is championed by many legal writers and

applied in practice by courts and juries. It accords with

ordinary habits of thought and speech. People attribute as a

causes any condition or relation known to them `but for' which the

result would not have occurred."

"This is to be decided by the application of commonsense

principles. In general, the application of the `but for' test

will be sufficient to prove the necessary causal connection. But

that test is only a guide. The ultimate question is whether, as a

matter of commonsense, a relevant act or omission was a cause."

Earlier in Nader v Urban Transit Authority of New South Wales (1985) 2 NSWLR 501 at p 530-1, McHugh J.A. said:-

"Causation in fact is to be determined, not according to

scientific or philosophical theories of causation, but by

`common sense principles': Leyland Shipping Co Ltd v Norwich

Union Fire Insurance Society Ltd (1918) AC 350 at 362;

Fitzgerald v Penn [1954] HCA 74; (1954) 91 CLR 268 at 277."

12. In this light, there was material before the Tribunal on which the Tribunal would have been entitled to find that Ms Boyd's employment with the Corporation contributed in a material way to the aggravation of her reactive depression. In a report dated 19 July 1988, Dr T.C.T. Lee, the treating psychiatrist said, inter alia:-

"The abovenamed patient was referred by her General Practitioner

and first presented on 10.7.87 for problems regarding her `stress

symptoms'. Beverley gave a long drawn-out history about her

feelings of distress, anger, resentment with symptoms of anxiety,

tension and depression. Further elaboration of her history

revealed a highly conscientious person much dedicated to her work,

very competent and hard working. Starting work soon after leaving

school at 15, she strived hard and achieved responsible positions

in her work. In 1971 she was employed by Australian Industry

Development Corporation and was very pleased by her appointment,

its challenges and responsibility. For the first six years there

were no difficulties and she worked very well with her senior

offices (sic) and colleagues. In 1977 she had a change of her

boss and problems began to surface for the first time. She was

unable to relate to the person and felt manipulated by pressures

put on her, both mentally and physically with excessive work.

Over the ensuing years she had on many occasions felt unable to

tolerate the emotional stress and turmoil and felt inclined to

resign but unable to do so as it was not pragmatic, and she was

also dissuaded from doing so by this boss. She felt ambivalence

in her relationship with the man with need to please him and yet

resenting his manipulation. Contributing to her difficulties were

problems with food allergies, relationship difficulties with a

neighbour and some grief problems related to the loss of her

boyfriend at that time. As a result of continuing pressures and

emotional turmoil, she began to decompensate in her functioning

with development of symptoms of forgetfulness, memory gaps, poor

concentration, intense anxiety, irritability, depressive feelings

and inability to cope. Her sleep was poor and disturbed frequently

by intense headaches. She became irrationally fearful and

confused, culminating in her stopping work by the beginning of

1987, feeling totally devastated and defeated. She now feels

extremely angry, resentful and depressed that she had lost a job

for which she worked so very hard, a position symbolic to her of

success and achievement but especially more so because

psychologically it was important for her to be good, capable and

recognised by others, almost a psychological indictment of her.

...

I feel that this person suffers a Reactive Depression stemming

from her difficulties in resolving the loss of her professional

status which she had striven for many years to achieve. She feels

strongly aggrieved by what she perceives as an injustice done to

her by others who were unsupportive and who treated her poorly.

The emotional turmoil has caused her to have symptoms of anxiety,

depression, irritability and other somatic manifestations of her

frustrations. In my opinion the alleged stresses caused by her

work environment could possibly have contributed and triggered off

the particular mental and physical condition that she now

presently suffers. Even though there had been some emotional

factors of her life that may have played a role in her present

predicament, I feel that the environmental circumstances of heavy

work and emotional binds in her workplace influenced the onset of

her difficulties."

13. In his oral evidence, Dr Lee emphasised how, arising out of the interaction of her own personality with that of Mr Thomas, Ms Boyd had developed an emotional tie with the Chief Executive officer and with the Corporation itself. The following questions and answers were given in the course of Dr Lee's evidence:-

"Well, assume that she did not leave the job until shortly

after his retirement?---Yes.

Does that affect your view of the matter?---I think it does play

some part on the whole emotional reaction to her own job and

how she felt before and after the retirement of this man.

Are you able to say what part was played by the retirement?---

It is hard to say. I think that she was caught in an ambivalent

bind with a man. And because, you know, the bind did not

allow her to express clearly her own emotional needs. When

the man was there there (were) continuing difficulties when the

man left the place and if she had retired herself sometime later,

then I guess one can postulate that there could be continuing

problems about what has happened to her and the person as well.

...

She was a person, and has been all her life, who is emotionally

unstable if I can use that in a simplified term. Is that right,

doctor?---I think that there needs to be qualification on that

statement. I think that she is not emotionally unstable in that

sense because she had been able to cope, to actually carry herself

with some dignity and appropriateness in many areas of her life.

So one cannot say that she is always emotionally unstable. But

there is an underlying tendency, given a trigger situation, that

could trigger off emotion?---Yes.

...

If, assuming that she says she is going to retire when the Chief

Executive retires, that is an indication that as far as

relationships with that Chief Executive is concerned that it was

not a situation where she was anxious to get rid of him or to work

for somebody else or anything of that nature; that she was quite

prepared to continue working up until he retired; do you agree

with that?---I think if you are asking me to assume all the

things that you have stated I guess that - you know I could not

say that it is consistent with your train of argument because I

think that this person has been caught in an ambivalent bind with

the man, and because she has been caught in an ambivalent bind, a

lot of her perceptions and a lot of the things that she would do

would not be very logical. But given that she is caught in an

ambivalent bind with him, the step that she was taking of retiring

would not be unusual, and the fact that she says she did not want

to break in a new executive would not be unusual in this type of

personality?---I guess she has become dependent and bonded him in

an emotional tie.

...

Assume, if you would, doctor, that when she returned to work on 5

January the inevitable did happen, she had a conversation with Mr

O'Sullivan and she was informed that she did not have the job.

Assume, if you would, that the evidence from the members of staff

will be that they never even considered it because they thought

she was retiring and assume, as far as she was concerned, she was

making application for the job. And assume she did not get it and

she was told so. Assume, if you would - well, stop it - if I may

stop you there - that could be, given the personality of this

particular person, a very significant factor, could it not?---I

think it certainly is a significant factor but not because of, you

know, either Mrs Thompson or Mrs Sullivan but, basically, because

the AIDC is the parental surrogate for her rather than any person.

...

Yes. And that is typical, is it not, of the underlying condition?

Something aggravates the situation and she explodes, if you like,

is that right?---I think it is typical of a lot of people to want

to, perhaps, talk about leaving under stress situations but in her

case she is caught in the bind of not being able to leave.

...

Doctor, I shall not keep you long. Certainly she did continue to

work until she lost her job except for that period of a month, so

it was the events of losing the job that turned her from a person

who could not work to a person - from a person who could work to a

person who could not. Is that right?---Yes. I think that she was

coping, you know, perhaps with some difficulty but still coping.

...

No. I think you used the term that the relationship with the

Chief Executive was one of the danger areas, and that is my words,

for emotional - triggering of emotional instability outbursts and

so forth in this type of person. Is that right?--- Only a certain

type of relationship. Yes?---Yes. But in this particular case,

with this particular man that that situation existed?---Yes."

14. The above sets out only some of Dr Lee's evidence. But it is sufficient to show that Dr Lee was of the view that, arising from her past history, her personality and that of Mr Thomas, Ms Boyd developed over many years an emotional relationship which bound her to the Chief Executive and to the Corporation in a special way, so that she had an emotional response to her work for the Corporation, and felt bound to it and unable to leave. In turn, it can be gathered from Dr. Lee's evidence, that she was disturbed and upset by the forthcoming retirement of Mr Thomas and accordingly began to decompensate in 1986 before his retirement. Ms Boyd's emotional tie with the Chief Executive and the Corporation played a part in her ultimate breakdown. On this view of the facts, the notice Ms Boyd was given by Mr O'Sullivan on 5 January 1987 was merely the culminating step which finally fractured the special relationship which had developed over many years from the circumstances and nature of her employment. The emotional bond as well as the notice of termination both played a part in the aggravation of Ms Boyd's underlying psychiatric illness.

15. If the Tribunal had taken that view of the evidence, it would have been open to the Tribunal to find that Ms Boyd's employment contributed in a material way to the aggravation of her condition. That is not to say that the Tribunal should have made those findings of fact or drawn that conclusion of causation, merely that a finding favourable to Ms Boyd on the question of causation was open to the Tribunal on the evidence before it.

16. The trial Judge came to the contrary view expressing his finding as follows:-

"Neither the passages cited from the two cases mentioned nor

anything else that was said therein supports the proposition that

the employment of a worker is a contributing factor to the

aggravation or acceleration of a disease if all that is

established is that the worker was, while he or she was at the

place of employment, informed that the contract of employment was

to be terminated in accordance with its terms. Such an event

cannot, in my view, properly be described as an incident or state

of affairs to which the worker is exposed `in the performance of

his duties'. Nor can it properly be described as a characteristic

of the work performed or a condition in which the work was

performed in the sense in which those expressions are used in

Federal Broom Pty Ltd v Semlitch (supra). Given the Tribunal's

findings of fact that the respondent's work as Executive Assistant

did not contribute to her disability and that it was `the removal

of the (respondent) from her job' in January 1987 that contributed

to the aggravation of her psychiatric condition, the decision in

Australian Telecommunications Commission v. Tzikas (supra), far

from supporting the Tribunal's decision, requires the opposite

conclusion."

However, the evidence which we have set out above went much further than to say merely that Ms Boyd suffered reactive depression when she was informed that her contract of employment was to be terminated in accordance with its terms.

17. We agree with the trial Judge that a decision in favour of Ms Boyd could not properly have been made by the Tribunal in view of the findings of fact expressed by the Tribunal. The Tribunal expressly found that Ms Boyd's work as executive assistant did not contribute to the causation, aggravation or acceleration of her reactive depression. The standing and intent of this finding is difficult to determine as, in reaching it, the Tribunal did not discuss the evidence of Dr Lee we have mentioned, though the Tribunal subsequently cited at considerable length from Dr Lee's evidence and relied substantially upon it to support the Tribunal's decision in favour of Ms Boyd's claim. We read that finding of the Tribunal's as dealing only with aspects of the case which we have not found it necessary to discuss. The trial Judge relied upon the finding when he affirmed the determination refusing compensation. However, we consider that, if the Tribunal's decision be set aside for error of law as we have contended it must, the matter ought to be remitted to the Administrative Appeals Tribunal to be heard and decided again. There was evidence before the Tribunal which the Tribunal did not reject on which the Tribunal could have found in favour of Ms Boyd.

18. For the reasons we have given, we would substitute for his Honour's order that the determination made on 17 September 1987 by a delegate of the Commissioner for Employees' Compensation be affirmed an order that the matter be remitted to the Administrative Appeals Tribunal to be heard and decided again with or without hearing further evidence. The appeal should therefore be allowed. The Corporation should pay the costs of this appeal.