Repatriation Commission v Holden

Federal Court of Australia|2014-06-12|Before: Mortimer J

INTRODUCTION 1 Mr Geoffrey Albert Holden was a member of the Australian Army and served during the Second World War, primarily on small army ships in the south-west Pacific region, delivering supplies to Australian troops at night, to avoid detection by the Japanese army. Mr Holden died in August 2011. 2 After his death, in October 2011 his widow, Mrs Holden (the first respondent), applied for a pension under the Veterans' Entitlements Act 1986 (Cth) (the Act). Her claim was that Mr Holden suffered from post-traumatic stress disorder (PTSD) caused by his war service, that this PTSD caused hypertension and led to his death from ischaemic heart disease. Her application was refused by the applicant, the Repatriation Commission, on 15 November 2011. That decision was affirmed by the Veteran's Review Board (VRB) on 25 June 2012. 3 On 9 August 2012, Mrs Holden applied to the Administrative Appeals Tribunal for review of that decision. She was successful and, on 1 November 2013, the Tribunal set aside the decision of the Commission to refuse to grant a pension, and substituted a decision that Mrs Holden be granted a widow's pension with effect from 28 July 2011. 4 By a notice of appeal filed with this Court on 29 November 2013, the Commission appeals to the Court on three questions of law, pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). 5 For the reasons I set out below, there will be orders allowing the appeal.

THE TRIBUNAL'S DECISION 13 The applicant noted in its submissions that Mrs Holden's claim concerned what is sometimes called a "complex hypothesis" for the purposes of the Act: see McKenna v Repatriation Commission (1999) 86 FCR 144; [1999] FCA 323 at [19]-[20]. As the Full Court in McKenna explained, the Act permits a hypothesis for the purposes of ss 120(3) and 120A(3) linking a veteran's death or disease with the circumstances of particular war service, to have sub-hypotheses. In other words, the hypothesis can be articulated in two stages. However, as the Full Court in McKenna also pointed out, if that is the kind of hypothesis which is articulated on behalf of a veteran, each of the sub-hypotheses must be upheld by a SoP (at [20]). 14 The parties appear to accept that where a claim involves a "complex hypothesis" it is appropriate for a decision-maker, in substance, to undertake the steps required by ss 120(3) and 120A(3) twice. That is how the Tribunal approached its task in this case. I hold some doubts whether that is what the Full Court in McKenna 86 FCR 144; [1999] FCA 323 contemplated, or what the Act requires. However, this issue was not raised in this appeal so it is unnecessary to decide. 15 It is certainly the case that the Full Court in McKenna held that, where there are two sub-hypotheses, each sub-hypothesis must be upheld by a SoP before the primary hypothesis can be found to be a reasonable hypothesis within the meaning of s 120A(3). 16 In this case, the hypothesis articulated on behalf of Mrs Holden was that Mr Holden's death from ischaemic heart disease was war-caused, because there were events during his service which caused him to develop PTSD, and this PTSD was a factor in his development of ischaemic heart disease. Thus, it can be seen that one of the "sub-hypotheses" is that there was a causal relationship between Mr Holden's PTSD and his war service. 17 In that context, the Tribunal identified three issues arising in the review before it. 18 The first was what the Tribunal described as "the kind of death" suffered by the veteran, relying for this description of the issue on Repatriation Commission v Hancock (2003) 37 AAR 383; [2003] FCA 711, together with the use of this phrase in the relevant SoPs. It found, and it is not contentious on this appeal, that the cause of Mr Holden's death was ischaemic heart disease (as a long-term cause) and then cardiogenic shock and right-sided pleural effusion as immediate causes. 19 The second issue identified by the Tribunal was more complex. It was whether the veteran suffered from PTSD and, if so, whether it was war-caused. It is accepted by the parties that this question involved a posthumous diagnosis, and therefore also a posthumous determination of whether, if Mr Holden did suffer from PTSD, it was war-caused. This affected the process by which the diagnosis could be made: that is, mainly by reference to accounts by Mrs Holden and documentary information, including clinical records. 20 There were three possible events identified by the Tribunal which could have been said to be a "traumatic event" for the purposes of a diagnosis of PTSD. The Tribunal focused on one event, which was Mr Holden's experience of a severe storm off the coast of Papua New Guinea. No criticism of that focus was made by the Commission on appeal. The storm flooded the supply ship to which Mr Holden was assigned and made everyone on board sick. The ship had to be towed to safety and repaired. There were no contemporaneous notes about the event in Mr Holden's personal diary but there was evidence he had spoken about it in the years closer to his death. Both the account given by Mr Holden to Mrs Holden in 2010, and the account he gave to the psychiatrist in 2009, involved descriptions by Mr Holden that he thought the ship was going to sink, and that he was terrified he would die. 21 The hearing before the Tribunal lasted two days. After considering the evidence given by Mrs Holden, her daughter, a long-term friend of Mr Holden's and file notes from a departmental medical officer, together with expert evidence from two psychiatrists and a clinical neuropsychologist, the Tribunal concluded that Mr Holden had a condition meeting the diagnostic criteria set out in SoP No 5 of 2008 concerning PTSD. 22 One of the psychiatrists had undertaken a consultation with Mr and Mrs Holden before Mr Holden died, the other had reviewed the documentation and provided a report. The clinical neuropsychologist (Mr Jackson) had also examined the relevant documentation including the report of the psychiatrist who had examined Mr Holden. Mr Jackson's opinion was described by the Tribunal in its reasons (at [30]) in the following terms: Mr Jackson concluded that the clinical picture was one of neuropsychological changes due to damage to the frontal lobe (acquired brain injury) arising from the 1994 surgery and were not primarily symptoms of a psychiatric condition. He stated: All the supplied documentation indicates that whilst there may have been some symptoms of Post Traumatic Stress Disorder, that these were never of a degree that had resulted in formal psychological or psychiatric intervention and did not appear to have a major impact on his domestic or social life up to his operation. 23 The Tribunal described the opinions of the psychiatrist who had seen Mr Holden (Dr Heffernan) in the following terms (at [26]-[27]): Dr Heffernan noted that Mrs Holden referred to the veteran's controlling manner and his limited range of participation in social activities, plus memory deterioration. Dr Heffernan said that due to time constraints and the veteran's significant cognitive impairment he was unable to obtain details of family background or life prior to war service, and only limited details of life after service. Dr Heffernan stated in his first report that his clinical impression was of … Frontal lobe dementia, possibly secondary to significant surgery five years ago, on a background of Post Traumatic Stress Disorder. Dr Heffernan reported that in relation to the effect of cancer surgery in 1994, Mrs Holden noted behavioural issues and memory deterioration since then. She told Dr Heffernan that the veteran had been excessively preoccupied with events that occurred during his army service, reading books about them and speaking regularly about them, particularly after the surgery. Dr Heffernan was unable to identify a history of flashbacks or nightmares pertaining to the stressful events, but stated in his second report that his clinical impression was of a … Frontal lobe dementia, possibly secondary to significant surgery five years ago. I cannot exclude a past history of Post Traumatic Stress Disorder… 24 The Tribunal described the opinion of the psychiatrist who had produced a report (Dr Kernutt) based on the documentation he had reviewed in the following terms (at [29]): Dr Kernutt acknowledged in his report that there was no specific documentation of psychiatric symptoms or posttraumatic-type symptoms, although the veteran's pre-morbid personality description would tend to indicate he kept these issues to himself but was also prone to aggressive behaviour. Dr Kernutt concluded that the veteran had suffered from PTSD as a direct result of his experiences during war service, followed by an increased preoccupation with wartime experiences as a result of frontal lobe damage arising from the 1994 surgery. 25 In making its finding of PTSD, which necessarily involved a rejection of the opinion of Mr Jackson, the Tribunal explained its reasoning in the following way: These findings are consistent with the conclusion reached by Dr Heffernan and also by Dr Kernutt, who made a detailed analysis of relevant documentation. Mr Jackson, who is not a qualified medical practitioner but is a clinical neuropsychologist with experience in the cognitive effects of PTSD, noted possible symptoms of PTSD but was unaware of Mrs Holden's evidence about the veteran's social and domestic life prior to 1994. Dr McCurdy referred only to Dr Heffernan's second report when stating that there was insufficient evidence of PTSD. Consequently the Tribunal finds that the veteran's response to the traumatic storm event involved intense fear, helplessness or horror, and the veteran satisfies the criteria for a diagnosis of PTSD. Therefore the Tribunal is not required to make findings in relation to the other stressful events experienced by the veteran. 26 Relying on essentially the same material, the Tribunal then went through the steps set out by the Full Court in Repatriation Commission v Deledio (1998) 83 FCR 82 at 97, and concluded that Mr Holden's PTSD was war-caused. It found the clinical onset of PTSD occurred after Mr Holden's operational service. 27 The third issue identified by the Tribunal was whether the veteran's PTSD contributed to his death from ischaemic heart disease. The Tribunal once again went through the process in s 120, as affected by s 120A, in accordance with the guidance given by the Full Court decision in Deledio 83 FCR 82. 28 The key criteria which the Tribunal needed to address in the 2007 SoP were the following, as the Tribunal set out in its reasons. The parties agreed the Tribunal accurately set out the relevant criteria in this part of its reasons. … (rr) for angina, acute myocardial infarction or sudden death from ischaemic heart disease only: … (iv) having panic disorder within the 12 months before the clinical worsening of ischaemic heart disease; or Paragraph 2 of SoP Nº 43 of 2009 provides: 2. The Repatriation Medical Authority amends, under subsection 196B(8) of the Veterans' Entitlements Act 1986, Statement of Principles concerning ischaemic heart disease No. 89 of 2007 by: … (B) Replacing existing factor "(rr)(iv)" in clause 6 with the following: "(rr)(iv) having a clinically significant anxiety spectrum disorder as specified, at the time of the clinical worsening of ischaemic heart disease; or"; … (E) Inserting a new definition for "a clinically significant anxiety spectrum disorder as specified" in clause 9 as follows: '"a clinically significant anxiety spectrum disorder as specified" means one of the following disorders: … (e) posttraumatic stress disorder; or … that attract a diagnosis under DSM-IV-TR and is sufficient to warrant ongoing management. The ongoing management may involve regular visits (for example, at least monthly), to a psychiatrist, clinical psychologist or general practitioner;'; and … 29 Neither party contends the Tribunal was wrong to identify the three issues in the way it did. Neither party contends that the general approach taken by the Tribunal to its task under ss 120 and 120A, in accordance with the guidance given by Deledio 83 FCR 82, was erroneous. 30 Rather, the questions of law raised by the applicant arise by reference to two paragraphs of the Tribunal's reasons. In those paragraphs, the Tribunal recorded its conclusions under s 120A(3) and under s 120(3), although expressed in terms of the guidance given by the Full Court in Deledio 83 FCR 82. The Tribunal stated (at [47]-[48]): In relation to the third step from Deledio the Tribunal has considered all the material and forms the opinion that the hypothesis raised is a reasonable one. Therefore the veteran satisfies the third step. In relation to the fourth step from Deledio, the Tribunal finds that the veteran's PTSD was sufficient to warrant ongoing management, even though there is no evidence that he visited a psychiatrist, clinical psychologist or general practitioner. Consequently the veteran's PTSD was a clinically significant anxiety spectrum disorder and the veteran satisfies factor 6(rr)(iv) of SoP Nº 89 of 2007 (as amended by SoP Nº 43 of 2009) and satisfies the fourth step. The Tribunal is not satisfied, beyond reasonable doubt, that there is no sufficient ground for making a determination that the veteran's IHD contributed to his death. Therefore his death was war-caused within the meaning of s 8 of the Act. Consequently there is no need for the Tribunal to make a finding as to the causal connection between the veteran's IHD and hypertension. (Emphasis added.) 31 The subject matter of the questions of law raised by the applicant is the Tribunal's conclusion that Mr Holden's PTSD was "sufficient to warrant ongoing management", for the purposes of cl 6(rr)(iv) of the 2007 SoP, read with cl 9 of that SoP.

THE PARTIES' ARGUMENTS 32 The first two questions of law challenge the Tribunal's conclusion in two different ways. Question 1 asks whether the Tribunal correctly construed the phrase "sufficient to warrant ongoing management", for the purposes of cl 6(rr)(iv) and cl 9 of the 2007 SoP. As developed in written and oral submissions, the applicant submitted that the bare conclusion by the Tribunal to this effect at [48] of its reasons, as well as its opinion at [47] that the (sub-)hypothesis was a reasonable one, could not have proceeded from a correct construction of that phrase. The correct construction, the applicant contended, was that there must be actual ongoing management of a veteran's PTSD condition, or there must be a recommendation by a medical practitioner of such management, or the Tribunal itself must recognise and find that such management was needed (whether or not it was recommended or obtained). That being the correct construction, the applicant submitted because there was no evidence or other material before the Tribunal which could have led it to any one of those three conclusions, the Court should infer the Tribunal had misconstrued the phrase in the SoP. 33 Alternatively, the applicant contended (through its second question of law) that, even if this inference could not be drawn, the Court should find that there was no evidence on which the Tribunal's conclusions at [47]-[48] of its reasons were based. Counsel for the applicant recognised in oral submissions the high threshold this ground imposed, but submitted it was met because the evidence from both Dr Kernutt and Mr Jackson noted the absence of any psychiatric treatment or intervention for Mr Holden for his PTSD, and there was no medical evidence before the Tribunal that any management would have been warranted. Further, the applicant contended that the Tribunal did not explain how, if it reached a finding for itself that management would have been warranted, the evidence enabled it to make that finding. 34 The third question of law flows rationally from the contentions on the second question of law and concerns the Tribunal's obligations to give reasons pursuant to ss 43(2) and 43(2B) of the AAT Act. 35 Section 43(2) provides: Subject to this section and to sections 35 and 36D, the Tribunal shall give reasons either orally or in writing for its decision. 36 Section 43(2B) provides: Where the Tribunal gives in writing the reasons for its decision, those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based. 37 The applicant contends that the Tribunal has failed to comply with these obligations. Its question of law did not identify specific reliance on one or both of the provisions. Its submissions concentrated on the obligation in s 43(2B). The Commission accepts the Tribunal's statement that it "finds that the veteran's PTSD was sufficient to warrant ongoing management, even though there is no evidence that he visited a psychiatrist, clinical psychologist or medical practitioner" is a finding on a material question of fact. However, the applicant contends the Tribunal does not set out references to evidence or other material on which that finding is based, and that constitutes non-compliance with s 43(2B). The applicant contends it is not possible to understand how the Tribunal reached the finding it did on this critical aspect of the SoP, for the purposes of performing its task under s 120(3) of the Act. Couching the submission in this way might be seen to invoke the obligation in s 43(2) as well. 38 The first respondent contended there was no misconstruction of the phrase in the SoP by the Tribunal. She accepted that the proper construction was as set out by the applicant, adapted from the decision of Tracey J in Simos v Repatriation Commission (2013) 212 FCR 391; [2013] FCA 607 at [58]; namely, that the word "warrant" meant "justify". She submitted the key word in the phrase was "sufficient" rather than "warrant". 39 She contended that the Tribunal had before it evidence and material on which it could base the findings it made: principally, this was the same evidence on which it relied to make findings that the applicant in fact suffered from PTSD. It was, therefore, evidence set out by the Tribunal at an earlier part of its reasons, relying on Mrs Holden's evidence, that of her daughter, and of the medical practitioners. 40 The first respondent submitted that, when read fairly, it was clear the Tribunal at [47]-[48] was acting on the evidence it had earlier recited when it made the findings: in particular, the evidence about the symptoms of PTSD which led it to make its earlier finding that Mr Holden did suffer from PTSD. The language used earlier was said by the first respondent to indicate the Tribunal's view of the severity of the condition to a level which met the standard of "warranting management" of the condition for the purposes cl 6(rr)(iv) and cl 9 of the 2007 SoP. 41 Although she accepted the brevity of the Tribunal's reasoning at [47]-[48], the first respondent submitted that a fair reading of the Tribunal's reasons, especially appreciating that the same material it relied on for the finding about Mr Holden suffering from PTSD could be used to assess severity, meant that it had set out earlier in its reasons enough material to satisfy the obligation in s 43(2B) to "refer" to the evidence or other material on which its findings in those paragraphs were based.

Question 1: construction of "sufficient to warrant ongoing management" 42 In my opinion, the Tribunal's reasons do not disclose any misconstruction of this phrase. It must be said that the reasons disclose no express construction at all. However, there is, as the applicant accepted, no obligation on the Tribunal (whether through s 43(2), s 43(2B) or otherwise) to set out in express terms its construction of part of a SoP in a circumstance such as this. 43 I am not prepared to infer from the Tribunal's conclusion on this issue, favourable to Mrs Holden, that it had misunderstood or misconstrued the phrase. 44 After some development in oral submissions, the parties substantially agreed on the proper construction of this phrase. They agreed, and I accept, that the phrase is not directed solely at whether in fact a veteran obtained management for a clinically significant anxiety spectrum disorder. The phrase "sufficient to warrant" refers to an objective judgment to be made by the Tribunal on the basis of the evidence at the time of the review, rather than by reference to historic fact. Nor, as counsel for the applicant properly conceded, does the phrase require that there be any expert or medical opinion that management of the condition is warranted. Of course, in a given case there may be such evidence and the Tribunal will need to consider such evidence, and the weight to be given to it. Ultimately, however, like every other aspect of the SoP (see O'Dowd v Repatriation Commission [2013] FCA 991 at [37] per Marshall J and the cases there referred to), it is for the Tribunal itself to make findings about whether the condition suffered by the veteran is the condition specified in the SoP, and whether the SoP upholds the hypothesis put forward, so as to meet the reasonableness requirement in s 120A(3). 45 In this case, the Tribunal made its own findings, as it was required to do. The fact that there was no medical evidence about the "need" for management of Mr Holden's PTSD did not preclude the Tribunal making a finding that his PTSD was "sufficient to warrant ongoing management". 46 The applicant accepted, by reference to the observations of Tracey J in Simos 212 FCR 391; [2013] FCA 607 at [58] about a different SoP, that the word "warrant" means in this context "justify". 47 Accepting that meaning, the word "warrant" forms part of a larger phrase, used in a particular context and as part of a larger set of criteria. It is important to construe the phrase as a whole: Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378; [2012] HCA 56 at [24] per French CJ and Hayne J; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69] per McHugh, Gummow, Kirby and Hayne JJ. 48 Whether the emphasis is placed on the word "sufficient" (as the first respondent contends) or on the word "warrant" (as the applicant contends) is not to the point. Construed as a whole, the phrase is clearly intended to require a decision-maker to form an opinion about the level or severity of the PTSD condition suffered by the veteran. The whole phrase imports a relative concept, assuming that there may be some conditions which are so mild as not to be capable of being causative of ischaemic heart disease. This construction is, in my opinion, supported by the use earlier in cl 6(rr)(iv) and cl 9 of the term "clinically significant" in an adjectival way. The subsequent requirement for ongoing management is in my opinion another way of the SoP emphasising, as it does with the use of the term "clinically significant", that not every diagnosed anxiety spectrum disorder is intended by the SoP to be a factor capable of upholding the hypothesis of a causative relationship between that disorder and ischaemic heart disease. 49 There is nothing in the Tribunal's reasons to indicate that it understood the phrase differently, or wrongly. The presence of the qualification in its finding ("even though there is no evidence that he visited a psychiatrist, clinical psychologist or general practitioner") demonstrates that it was alive to a meaning of the SoP which went beyond the historical fact of clinical management of Mr Holden's PTSD. 50 Although its findings concerning whether Mr Holden was suffering from PTSD are located in the earlier parts of its reasons, a fair reading of those parts of the Tribunal's reasons discloses an awareness of the need to look for a level of PTSD which first, was clinically significant and, second, which required ongoing management as an indicator of severity. For example, at [22]-[25] of its reasons, the Tribunal recounts the evidence of Mrs Holden and Mr Holden's friend Mr Rose about Mr Holden's moods, his aggression, how stressful he had found events during his war service, and how he had some "dark times". 51 Again, in that part of its reasons dealing with the diagnosis of PTSD, the Tribunal makes (at [31]-[32]) the following findings, central aspects of which indicate that the Tribunal understood the emphasis in the 2007 SoP on the need for a level of severity to attach to the nominated anxiety spectrum disorder. The Tribunal accepts the evidence from Mrs Holden and Mr Rose, also told to Dr Heffernan by Mrs Holden, that the veteran persistently re-experienced the storm event by recurrent and intrusive distressing recollections of the event, including images, thoughts or perceptions (paragraph 3(b)(B) of SoP No 5 of 2008). Further, the veteran persistently avoided stimuli associated with the trauma and numbing of general responsiveness (not present before the trauma) by markedly diminished interest or participation in significant activities such as family events; he demonstrated a feeling of detachment or estrangement from others by being unsociable and having few friends; and he had a restricted range of affect by being unable to have loving feelings towards his family (paragraph 3(b)(C)). The Tribunal also finds that the veteran had persistent symptoms of increased arousal (not present before the trauma) such as irritability or outbursts of anger; and difficulty concentrating (paragraph 3(b)(D)). The Tribunal finds that the duration of the disturbance was more than one month (paragraph 3(b)(E)) and that the disturbance caused clinically significant impairment in social, occupational or other important areas of functioning (paragraph 3(b)(F)). 52 Criteria such as those set out in cl 3(b)(F) of the 2008 SoP - that the disturbance caused "clinically significant distress or impairment in social, occupational or other important areas of functioning" - are, in and of themselves, capable of suggesting a need for ongoing management. 53 Whether they do or do not will depend on the circumstances in an individual case. In any given factual situation, there may be reasons why such management is no longer needed by the time of the clinical worsening of a veteran's ischaemic heart disease: for example, successful treatment of the PTSD. In those circumstances, a major resolution of the condition could sever the causative link with ischaemic heart disease. Alternatively, given that PTSD may be diagnosed where there is a disturbance greater than one month - but therefore not necessarily a disturbance which lasts for years - it may not be possible for a decision-maker to find on the material that a veteran was still suffering PTSD at all at the time the veteran's ischaemic heart disease worsened. Finally, it is possible to conceive of a circumstance where, even without treatment, a veteran's PTSD might resolve to such a mild level that, at the time of the worsening of that veteran's ischaemic heart disease, the decision-maker could not reasonably find that ongoing management of the PTSD was needed, in the sense that the PTSD was not sufficiently severe as to uphold a hypothesis of a causative link between the PTSD and the ischaemic heart disease. Therefore, it will not be in all circumstances that the reasoning applicable to diagnosis of PTSD can be applied to the criterion in cl 6(rr)(iv) and cl 9. 54 None of those circumstances which I have just outlined, and which the terms of the SoP are intended to cover, appear to have arisen in Mr Holden's case. The Tribunal's references to the evidence on which its findings about the posthumous diagnosis of PTSD are based make it clear that the Tribunal understood that a level of severity needed to attach to Mr Holden's PTSD to meet the criteria in the 2007 SoP. In my opinion, the applicant has not established any error in the Tribunal's construction or understanding of the construction of cl 6(rr)(iv) and cl 9.

Question of law 2: whether no evidence 55 As the applicant conceded, to persuade a reviewing court that a finding of a decision-maker was made without any basis in the evidence presents a high threshold, as well as involving an analysis which, if not carefully delineated, can slide into a review of the merits of the decision. 56 It is instructive to recall the distinction explained in R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co Pty Ltd (1953) 88 CLR 100 at 119-120 per Dixon CJ, Williams, Webb and Fullagar JJ. This case concerned an application for prohibition under s 75(v) of the Constitution, but for present purposes in my opinion that is not a material difference to the operation of the principle: the chief point of difficulty in the case lies in the distinction between on the one hand a mere insufficiency of evidence or other material to support a conclusion of fact when the function of finding the fact has been committed to the tribunal and on the other hand the absence of any foundation in fact for the fulfilment of the conditions upon which in point of law the existence of the power depends. It is not enough if the board or the delegate of the board, properly interpreting pars. (a) and (b) of s. 23 (1) and applying the correct test, nevertheless satisfies itself or himself on inadequate material that facts exist which in truth would fulfil the conditions which one or other or both of those paragraphs prescribe. The inadequacy of the material is not in itself a ground for prohibition. But it is a circumstance which may support the inference that the tribunal is applying the wrong test or is not in reality satisfied of the requisite matters. If there are other indications that this is so or that the purpose of the function committed to the tribunal is misconceived it is but a short step to the conclusion that in truth the power has not arisen because the conditions for its exercise do not exist in law and in fact. 57 As well as highlighting the distinction between no evidence and evidence which a reviewing court (or one party) might consider inadequate, the passage explains the potential for a link between a question of law of the kind first relied on by the applicant and a "no evidence" argument. 58 As I have found, the fact that the Tribunal's reasons might be said insufficiently to reveal the material on which it based its conclusion about cl 6(rr)(iv) and cl 9 does not lead me, in this particular case, to conclude that the Tribunal misconstrued in its context the phrase in cl 6(rr)(iv) and cl 9 "sufficient to warrant ongoing management". 59 The distinction made by the High Court in Melbourne Stevedoring 88 CLR 100 between no evidence and evidence perceived to be inadequate continues to be adhered to in the identification of what constitutes a question of law, or an error of law, under statutory schemes where appeal rights are dependent on such criteria. See, amongst many authorities which could be referred to, Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356 per Mason CJ, at 367 per Deane J; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611; [1999] HCA 21 at [49] per Gleeson CJ and McHugh J; Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141; [2001] FCA 744 at [34]; Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 207 ALR 12; [2004] HCA 32 at [38] per Gummow and Hayne JJ; Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32 at [91] per Hayne, Heydon, Crennan and Kiefel JJ; Rawson Finances Pty Ltd v Commissioner of Taxation (2013) 133 ALD 39; [2013] FCAFC 26 at [62] per Jessup J, at [84] per Jagot J. One qualification to some of the dicta in those authorities, not relevant in this appeal, but necessary nonetheless to note, is how references to illogicality not being sufficient to constitute error of law might sit with more recent developments in authorities such as Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59; [2003] HCA 30; SGLB 207 ALR 12; [2004] HCA 32; Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611; [2010] HCA 16. 60 If the applicant is correct in its contention that there was no evidence for the Tribunal's finding in relation to cl 6(rr)(iv) and cl 9, there would be no doubt but that the Tribunal's decision must be set aside. If the evidence might be said to be inadequate, or thin, or another qualitative description, the ground is likely to fail. 61 As this ground was developed, it became apparent that, consistently with the findings I have made on question of law 3 below, the real problem was the failure of the Tribunal to identify the evidence or other material on which it based its findings. This is not a case where there was no foundation in the evidence or material on which the Tribunal could base its finding that Mr Holden's PTSD was a disorder of sufficient severity to warrant ongoing management. For example, before this Court and the Tribunal were the clinical notes from Mr Holden's treating doctor, which included the following note to the psychiatrist Dr Heffernan, who saw Mr and Mrs Holden: Thankyou for seeing Geoffrey Holden, age 83 years, for his (?) PTSD … Geoff has rarely initiated anything about any of his symptoms, but his wife volunteers that he exhibits flashbacks etc on almost a nightly basis. He certainly brings it up pretty much every day. 62 Ultimately, Dr Heffernan said in his report he was unable to identify a history of psychiatrically-defined flashbacks or nightmares pertaining to these events, but he had noted in a subsequent report the "significant limitations as regards available information" because of a number of factors - Mr Holden's cognitive impairment by the time of assessment, the fact his marriage to Mrs Holden was his second marriage and therefore she knew little of his experiences immediately after and during the decades following his war service, and that many of his immediate family are deceased. 63 Dr Kernutt, who reviewed all the relevant documentation in order to provide a report about whether Mr Holden suffered from PTSD, concluded that Mr Holden did suffer from PTSD: In my opinion, and based upon the analysis of the documentation and reports provided to me, I conclude on the balance of probabilities, that Mr Holden suffered from Post-traumatic stress disorder as a direct result of his military experiences during the Second World War. These symptoms appear to have been of a mild nature for many years although there is inadequate information to clarify this. He also suffered damage to his frontal lobes following surgery to remove a nasal adenocarcinoma in 1994. It is likely that as a direct result of the frontal lobe syndrome there was a disinhibiting effect and an increased preoccupation with his previous wartime experiences and traumatic memories. Given the description of Mr Holden's premorbid personality, it is unlikely that he would ever have sought treatment of his own accord for any psychological symptoms. 64 He also concluded that it was more probable than not that Mr Holden's PTSD commenced shortly after his war service but did not become clinically significant until after the disinhibiting effects resulting from his frontal lobe dementia resulting from surgery in 1994. This medical evidence, together with Mrs Holden's accounts of how her husband became preoccupied with his war service after that surgery, discussing events during his service in an obsessive way, and developing what his wife described as "nastiness", were all capable of providing an evidentiary foundation for the Tribunal's findings. 65 This is by no means an exhaustive account of the evidence before the Tribunal which was capable of supporting the Tribunal's finding at [48] of its reasons. However, it is sufficient to demonstrate why the second question of law must be answered adversely to the applicant.

Question of law 3: compliance with sections 43(2) and 43(2B) 66 None of the references to the evidence in the preceding paragraphs are to be found in the Tribunal's reasons, in a way which clearly links that evidence with its finding at [48]. It is true that the Tribunal referred in some detail to, and accepted, Dr Kernutt's report, and Dr Heffernan's reports. There is some inconsistency between various statements made by Dr Heffernan, but he was not called to give evidence at the Tribunal so any disconformities were not explored. Nevertheless, the Tribunal's reasons do not explain how the Tribunal came to rely on particular parts of what Dr Heffernan said, rather than other parts. 67 As I have observed at [50] above in relation to the first question of law, the Tribunal's reasons should be read as a whole to see how it understood and applied the phrase in cl 6(rr)(iv) and cl 9 of the 2007 SoP. Its fact finding concerning whether Mr Holden suffered from PTSD (including the evidence to which it refers in those parts) found an inference, which I am prepared to draw, that those parts of its reasons were expressed with the knowledge of the task it needed subsequently to perform, and the issues it needed subsequently to decide, under the SoP about ischaemic heart disease. As I have concluded at [54] above, its reasons do not disclose any erroneous approach to the construction of cl 6(rr)(iv) and cl 9 of the 2007 SoP. 68 To draw an inference in terms of the Tribunal's understanding of its task, and to find no error in its reasons in relation to the proper construction of cl 6(rr)(iv) and cl 9 of the 2007 SoP, is one thing. To address whether, given that inferential process is necessary, it can be said the Tribunal has complied with its obligations under s 43(2B) of the AAT Act, is another. 69 Two issues thus present for determination. First, what is the content of the obligations in ss 43(2) and 43(2B) of the AAT Act and has the Tribunal complied with them? Second, if there has been a failure to comply with those obligations, does such a failure constitute an error of law? Indeed, in terms of s 44 of the AAT Act and the nature of this Court's jurisdiction (on which see Rana v Repatriation Commission (2011) 126 ALD 1; [2011] FCAFC 124 at [11] per Kenny, Stone and Logan JJ; Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321; [2003] FCAFC 232 at [11]-[16] per Branson and Stone JJ; TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 at 178 per Gummow J), the correct expression of this issue is whether a question concerning failures to comply with ss 43(2) and 43(2B) is a question of law. 70 If those issues are answered favourably to the applicant's contentions, a further issue about appropriate relief arises. Since I am prepared to answer those first issues favourably to the applicant, I deal with the appropriate relief at [84] below. 71 In Dornan v Riordan (1990) 24 FCR 564 at 573, the Full Court held that where a statutory obligation to give reasons is a requirement for the exercise under the statute of a decision-making power, then a "substantial" failure to state reasons will constitute an error of law. In that case, a central issue on judicial review was how the Pharmaceutical Benefits Remuneration Tribunal had arrived at the "base rate" for the dispensing fee paid to pharmacists. The Tribunal determined there should be a reduction in the "base rate" from $4.55 to $3.50, but nowhere in its reasons did it explain how it arrived at that figure. In those circumstances, the Full Court held that the failure to give reasons, as its constituting statute required it to do, was a substantial one, because the reasons were not "adequate to enable the Court to determine whether or not any other error had occurred in the reasoning process" (at 575). This aspect was also emphasised, along with others, by the Full Court in Civil Aviation Safety Authority v Central Aviation Pty Ltd (2009) 179 FCR 554; [2009] FCAFC 137 (the CASA case). 72 I note at first instance in the CASA case a careful review and discussion by Perram J of the distinctions in the authorities between errors of law and questions of law, where inadequate reasons are concerned: see Civil Aviation Safety Authority v Central Aviation Pty Ltd (2009) 108 ALD 329; [2009] FCA 49. It is not necessary for me to enter that debate for the purposes of resolving this appeal. The Full Court in the CASA case made it clear that a failure to state reasons for a decision - at least where a statement of reasons is a requirement of the exercise of the decision-making process - constitutes an error of law: at [49]. The Court clearly had in mind legally inadequate reasons as included in the expression"failure". 73 The separate question whether a failure to comply with a statutory reasons obligation invalidates the exercise of power itself may depend on inferences to be drawn from the reasoning process exposed by the reasons of the decision-maker: see Repatriation Commission v O'Brien (1985) 155 CLR 422 at 445-446 per Brennan J. Even where reasons are legally adequate, the reasons in fact given by a decision-maker may also reveal a failure to take relevant considerations into account or a misunderstanding of the law to be applied, because those reasons reveal what the decision-maker considered to be material, and how the decision-maker approached her or his statutory task: see Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30 at [38] per Gaudron J, at [69], [75] per McHugh, Gummow and Hayne JJ. 74 The distinction between inadequate reasons which do not have the additional feature of revealing other errors of law and those which do is illustrated by the reasoning in Re Minister for Immigration and Multicultural Affairs; Ex parte Palme (2003) 216 CLR 212; [2003] HCA 56 at [39]-[48] per Gleeson CJ, Gummow and Heydon JJ. Having identified the statutory reasons obligation in that case as a step "posterior" to the making of the visa decision, and having referred to the distinction in Melbourne Stevedoring 88 CLR 100, the majority said (at [44],[48]): Here, the question is whether the step under s 501G which logically and temporally succeeds the making of a decision in exercise of a power is a condition precedent to that exercise. The possibility that this is so may be conceded. But, as Project Blue Sky emphasised, the answer depends upon the construction of the Act to determine whether it was a purpose of the Act that an act done or not done, in breach of the provision, should be invalid. This gives rise to several immediate difficulties for the prosecutor. … The visa cancellation decision may be reviewed in this Court for jurisdictional error. Such error may be found from what is disclosed by reasons provided under s 501G(1)(e). Failure to provide reasons may also be reviewed in this Court and compliance by the Minister with the statutory duty may be ordered. The reasons then provided may furnish grounds for prohibition under s 75(v) in respect of the visa cancellation decision. But what is not provided for is for a prosecutor, as in this case, to bypass that earlier step utilising mandamus, and to impeach the visa cancellation decision itself for want of discharge of the duty to provide reasons. There is, as was pointed out in argument, a critical distinction between failure to comply with s 501G(1)(e) and using that failure to conclude that the visa cancellation decision is flawed by jurisdictional error. 75 In an appeal under s 44 of the AAT Act, which does not depend on the concept of jurisdictional error, the distinction between reasons which are non-compliant with a statutory obligation and reasons which are non-compliant and also reveal other errors may be most relevant to the relief sought. Otherwise, so long as a question of law is raised in respect of the Tribunal's alleged non-compliance with ss 43(2) and 43(2B), this Court has jurisdiction to determine the matter and exercise the powers conferred on it by s 44 of the AAT Act if it finds such a failure to have occurred. 76 This is not a case of wholesale, or repeated, inadequacy of reasons. The Commission put its argument much more specifically than that, which is why its submissions focused on s 43(2B) rather than s 43(2). 77 So far as s 43(2B) is concerned, the obligation in s 43(2B) is twofold. The Tribunal must set out its findings on material questions of fact, and it must include "a reference" to the evidence or other material on which those findings are based. In a busy administrative tribunal such as the AAT, the content of the obligation in s 43(2B) must be approached with due appreciation of the circumstances in which the obligation must be discharged, including the obligations contained in s 33 of the AAT Act. As Bromberg J observed in Willis v Repatriation Commission (2012) 202 FCR 323; [2012] FCA 399 at [17]-[18], the s 43(2B) obligation must be applied with a view to the materiality and significance of particular findings on material questions of fact in each review. That is consistent with the approach in Dornan 24 FCR 564, that one of the central functions of a statutory obligation for a tribunal to give reasons is to facilitate appeals, here on questions of law only, or judicial review. 78 Where findings on material questions of fact are in issue, or are significant, it has been held that s 43(2B) requires the Tribunal to explain what evidence it has accepted or rejected in making those findings: TelePacific Pty Ltd v Commissioner of Taxation (2005) 218 ALR 85; [2005] FCA 158 at [50] per Sackville J, and the authorities there cited. The text of s 43(2B) requires the Tribunal to "refer" to the evidence or other material on which its material findings of fact were made, but this element is no more than an inclusive aspect of the general reasons obligation in s 43(2), rather than exhaustive of it. I accept that, at least on matters which are centrally in issue or significant, some level of explanation by the Tribunal in the manner suggested by Sackville J will usually be required for compliance with s 43(2B). 79 In my opinion, it cannot be doubted that whether the hypothesis raised by Mrs Holden was upheld by cl 6(rr)(iv) and cl 9 of the 2007 SoP was a significant issue in the Tribunal's review. It also cannot be doubted that whether, as a matter of fact, Mr Holden's death from ischaemic heart disease was related to his war service because he had a clinically significant anxiety spectrum disorder within the terms of cl 6(rr)(iv) and cl 9 of the 2007 SoP was an important issue in the Tribunal's review. Its reasons disclose an awareness that it needed to make findings on material facts in order to address those issues. At [48] of its reasons it made such a finding, but it did not explain why it had done so, nor did it include any reference to the evidence or other material on which its finding was based. This was only partial, and insufficient, compliance with s 43(2B). 80 The questions posed by cl 6(rr)(iv) and cl 9 of the 2007 SoP are different questions to those posed by the 2008 SoP on PTSD. They occur at a different stage of the process required by s 120(3) of the Act. They are the final stepping stones to a determination either in favour or against a claim by a veteran or a veteran's family. They concern the very causative relationship to which ss 120(1) and 120(3) of the Act are directed. Whilst one might speculate about how the Tribunal reached the conclusion it did, and point to evidence available to it, such observations are no substitute for the discharge by the Tribunal of its obligation under s 43(2) and more particularly under s 43(2B). 81 The Commission, on determination of the review by the Tribunal, was required to pay to Mrs Holden a pension in accordance with the Act. It is entitled to understand, by way of express explanation, why the Tribunal concluded Mrs Holden was entitled to that pension under the terms of cl 6(rr)(iv) and cl 9 of the 2007 SoP and what evidence or material it relied upon for that conclusion. The answer to that step in the statutory process was contested on the merits by the Commission before the Tribunal, and the Tribunal was required to record in more detail its explanation of the findings it made.

CONCLUSION 82 For those reasons, in my opinion the Tribunal has failed to comply with its obligation under s 43(2B) of the AAT Act in relation to its conclusion at [48] of its reasons that Mr Holden's PTSD was a factor in his death from ischaemic heart disease, in the terms expressed in cl 6(rr)(iv) and cl 9 of the 2007 SoP. 83 I turn then to the question of appropriate relief.

APPROPRIATE RELIEF 84 By s 44(4) of the AAT Act, this Court is empowered to make such order or orders as it thinks appropriate on the determination of the appeal. The width of that power is not constrained by the terms of s 44(5), and is illustrated by the conferral on the Court in an appropriate case of the power to make for itself findings of fact in a review: see s 44(7). 85 In the CASA case 179 FCR 554; [2009] FCAFC 137 at [55], the Full Court stated: Notwithstanding the divergence in authority, a failure to comply with s 43(2) of the AAT Act should not inevitably lead to an order pursuant to s 44(5) that the Tribunal's decision should be set aside in its entirety or, alternatively, lead to the reasons alone being set aside and an order being made for reasons to be provided. The appropriate order to be made pursuant to s 44 will depend upon the facts and circumstances of each individual case and the exercise of the discretion thereby conferred. 86 In the CASA case, both the primary judge and the Full Court considered that there was a prospect, on the evidence before the Tribunal, of a different decision being reached by the Tribunal. This was recognised to be a factor which could affect the exercise of discretion under s 44(5).The scope of the power in s 43AA of the AAT Act and the primary judge's reliance on it was a material issue before the Full Court. No issue about s 43AA arises on this appeal. The third distinguishing factor in the CASA case was that the Tribunal member who gave the decision under appeal was no longer a member of the Tribunal and thus could not be ordered to provide reasons which complied with s 43(2B). 87 In my opinion, it is clear from the Full Court's decision (see especially at [56]-[62]) that these factors were important in its conclusions that the Tribunal's decision in that case needed to be set aside and the matter remitted for further consideration by the Tribunal. The unavailability of the same Tribunal member also appeared to affect the Court's view of whether the remitter should be attended by any conditions or not: see at [68]. 88 The circumstances in the present appeal are quite different. First, the applicant did not submit, and the Court has no basis for finding, that the Tribunal member who made the decision under appeal is not available to make a fresh decision on the review, or to comply with any direction for the provision of further reasons. I proceed on the basis that the Tribunal member is available. 89 Second, I have not accepted the applicant's contention on the first and second questions of law, and therefore I am not satisfied there has been any misconstruction of the 2007 SoP by the Tribunal, or that there was an absence of evidence on which it could base its findings about cl 6(rr)(iv) and cl 9 of the 2007 SoP. No other errors of law were identified in the Tribunal's decision. Whilst it is always possible that a differently constituted Tribunal might reach a different decision on the matters arising on the hypothesis put forward on behalf of Mrs Holden, this is a case where in my opinion there is an insufficient basis for me to find that the failure to provide reasons compliant with s 43(2B) on one factual issue (albeit an important one) invalidated the exercise of the Tribunal's decision-making power on the review itself. Nor is there a sufficient basis for me to conclude that further exploration on that issue raises a real possibility that the Tribunal would reach a different conclusion on the review itself. In my opinion, the Tribunal's views were firmly and clearly held on the merits of the case. Mrs Holden in that sense succeeded on the merits of her case entirely, and she should not be deprived of that outcome because of a failure by the Tribunal to explain itself on one, albeit material, factual conclusion. 90 Nevertheless, the applicant is entitled to understand why the Tribunal reached the conclusion that it did, by way of an express explanation. The possibility that such an explanation by the Tribunal might reveal an error of law cannot be discounted to nothing. For that reason, any order made by the Court must, in my opinion, preserve the ability of the Commission to appeal under s 44 of the AAT Act if the Tribunal's reasons, given in compliance with s 43(2B) on this particular issue, then reveal an error of law. 91 It was not suggested by the applicant that the Tribunal's reasons in any respect other than its reasoning about cl 6(rr)(iv) and cl 9 of the 2007 SoP were not compliant with s 43(2B). That, in my opinion, is a further factor which justifies a limited order being made under s 44(5) of the AAT Act. There are costs to all parties both in this Court and also on any remitter and they should be minimised. Nor should the Tribunal, with the limits and demands on its resources, be asked to redo more of its statutory function than is necessary to cure the legal deficiency which has been identified on this appeal, in circumstances where otherwise it was open on the evidence for it to make the findings it did and no legally erroneous approach to its statutory task is revealed in its reasons. 92 Accordingly, I propose to order that the Tribunal's decision be set aside, and to direct the Tribunal to provide further reasons for its findings at [48] and make a fresh decision under s 43(1), together with those further reasons. The orders I have made do preserve the ability of the Tribunal to make a different decision on the review if, after further exposition of its reasoning process, it considers a different decision to be the correct or preferable one. 93 This order is different from the one made by Tracey J in Simos 212 FCR 391; [2013] FCA 607, and for which the applicant contended. As the Full Court said in the CASA case 179 FCR 554; [2009] FCAFC 137, the relief appropriate in each case will be dependent on the particular circumstances facing the Court. In my opinion the order I propose strikes the appropriate balance between addressing the complaint made by the applicant, which I have upheld, preserving the applicant's ability for a further appeal if error is revealed, and yet giving effect to the clear merits of the decision as seen by the repository of the power after a full two-day hearing. 94 Although the applicant initially sought its costs if the appeal were successful, in its written submissions in reply it confirmed that it did not seek any costs of the appeal. Accordingly there will be no orders as to costs. I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer.

Veterans' Entitlements Act 1986(Cth)ss 5C(1), 6A-6F, 7, 8, 13, 120, 120A, 196B(2)

ALR 85; [2005] FCA 158 TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 Willis v Repatriation Commission (2012) 202 FCR 323; [2012] FCA 399

At a glance

Court

Decision date

Before

Source

Judgment (9 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (41)