Shingles v Defence Force Retirement and Death Benefits Authority - [2009] FCA 1211 - FCA 2009 case summary — Zoe

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Shingles v Defence Force Retirement and Death Benefits Authority

[2009] FCA 1211

Federal Court of Australia|2009-10-30|Before: Finn J

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Source facts

Court

Federal Court of Australia

Decision date

2009-10-30

Before

Finn J

Source

Original judgment source is linked above.

Judgment (22 paragraphs)

[1]

REASONS FOR JUDGMENT 1 In this matter it has been conceded by the respondent authority that during the hearing of this matter before the Administrative Appeals Tribunal a member of the Tribunal so conducted himself as to give rise to a reasonable apprehension of bias. While counsel for the appellant, Graham Shingles, took issue with comments made by the Tribunal Member during oral submissions, the two principal questions which arise in this appeal are, first, whether counsel nonetheless waived his right to object after the determination of the appeal to the Tribunal and, secondly, whether the Tribunal's decision itself bespeaks grounds for a reasonable apprehension of bias in the making of the decision. I need only deal with the latter matter in any detail, though I am satisfied that there was no election made to waive bias in any event. As I will note below, two claims of denial of procedural unfairness hang off the matters founding the bias allegations.

[2]

Factual Setting 2 The procedural history of this matter is a somewhat protracted one. The appellant was discharged from the Army on 26 October 1971. It is for this reason that the law governing his application for invalidity benefits is the Defence Forces Retirement Benefits Act 1948 (Cth). Part 5 of that Act provided invalidity benefits for members of the scheme established by the Act who had been retired on the ground of invalidity or physical or mental incapacity to perform their duties. Section 51(6) provided for the Authority to treat members as if they had been retired on the grounds of incapacity. 3 The initial classification of a member is made pursuant to s 51 of the Act. That section provides that the Authority should determine the member's percentage of incapacity in relation to civil employment and should classify the person according to the percentage of incapacity as follows: 60% or more: Class A 30% or more but less than 60%: Class B Less than 30%: Class C

[3]

4 Section 52 provided for the rate of pension payable to a member classified in each class. A member classified Class C is not entitled to the payment of an ongoing pension. Section 53 of the Act gives the authority power to review from time to time a member's classification according to matters set out in s 53(1A) and s 53(1B). A member initially classified Class C is not entitled to be reclassified at any later date: s 53(4). 5 On 26 February 2002, the Tribunal ordered by consent that, pursuant to s 51(6) of the 1948 Act, the appellant should be treated as if he had been retired from the Defence Force, on the ground of invalidity or physical or mental incapacity to perform his duties. 6 On 30 April 2002 the appellant provided an "Application for invalidity benefits & Superannuation Productivity". On 18 June 2002 the appellant was classified as Class C with effect from 27 October 1971. 7 On 6 December 2002, following reconsideration, the Authority confirmed the decision and the appellant applied to the Tribunal for review of that decision. 8 On 17 May 2004 the Tribunal affirmed the decision under review. That decision was set aside on appeal by the Federal Magistrates Court and the matter remitted to the Tribunal. 9 On 2 March 2007, following a further hearing, the Tribunal again affirmed the decision, finding that the appellant had an incapacity of 25%. An appeal to the Federal Magistrates Court was dismissed and it is from that decision that the appellant now appeals. 10 The appellant, at the time of his discharge, suffered relevantly from os calcis exostosis (heel spurs) and from alcohol dependence either as a sequelae of Post Traumatic Stress Disorder or as a separate condition. 11 The appellant gave an account of his service in Vietnam and of his work history on his return to Australia. He gave evidence about the effect his alcohol dependency had on his ability to obtain and more importantly retain employment. 12 The effects of alcohol dependence (which existed at the time of discharge) on the appellant's capacity for civil employment was a critical issue before the Tribunal. 13 The Tribunal addressed the appellant's psychiatric impairment, which comprehended his alcohol dependence, at paras [60] to [68]. Although the Tribunal appears to have accepted that the appellant had many jobs and could only retain them for a short period, it apparently did not accept that the alcohol dependence was the cause or was significant. Rather, the Tribunal concluded that the appellant had exaggerated the effects of his alcohol dependence. 14 The Tribunal's reasons and decision were heavily influenced by its view of the appellant's credibility.

[10]

(b) Denial of Procedural Fairness 24 I should emphasise at the outset that what is complained of here is not that, when confronted with inconsistencies in the appellant's evidence, the Tribunal made choices unfavourable to him. Rather it is that the Tribunal made it a critical issue in the matter that the appellant "[had] attempted to exaggerate the facts of his disabilities in his obtaining and retaining employment" and that this was not put to him. 25 Both parties accept that, for present purposes, the law is sufficiently stated in the reasons of the High Court in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 231 ALR 592 at [29]-[32]: No submission was made on behalf of either the appellant or the minister that the existence or content of the obligation to accord procedural fairness was directly affected by any provision of the Act. Rather, the argument proceeded, for the most part, by reference to what had been said by the Full Court of the Federal Court in [Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576]. The Full Court (Northrop, Miles and French JJ) said: Where the exercise of a statutory power attracts the requirements for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question. [emphasis added] Particular attention was directed in argument in this court, as it had been in the courts below, to the tribunal's conclusion that the three identified elements of the appellant's story were not "plausible". Was that a conclusion "which would not obviously be open on the known material"? Or was it no more than a part of the "mental processes" by which the tribunal arrived at its decision? Stated in this way, the argument seeks to elucidate the content of the requirements of procedural fairness by setting up a dichotomy. There are two reasons to exercise considerable care in approaching the problem in that way. First, it is far from clear that the two categories that are identified (conclusions not obviously open on the known material, and mental processes of decision-making) encompass all possible kinds of case that may fall for consideration. Secondly, there is a very real risk that focusing upon these two categories will distract attention from the fundamental principles that are engaged. In Alphaone the Full Court rightly said (at 590-591]: It is a fundamental principle that where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material. [emphasis added]

[14]

30 At the very end of his final submissions, Mr Shingle's counsel indicated that he would conclude "unless the Tribunal would be assisted by me addressing any other matter". Then ensued the following exchange (Tr 73-75): Senior Member: No, I'll just mention it to you, cautionary; it seems to me that the question of the credit of the applicant hasn't been drawn into issue in these proceedings, has it? Mr White: It doesn't seem to have been drawn into issue. Senior Member: I mean were it to be so one would have to approach the evidence, etcetera with that in mind. Let me honest. You look at some of the early psychiatric matters; either they were very poor history-takers or else he was completely confused as to what he was doing. Mr White: Not necessarily. Mr Dinnen said this morning that it was not uncommon that people wouldn't say things unless on direct question. Senior Member: Well, you can take some of Dr Duncan's early reports, he had him as a driver in Vietnam. He had him with 7 and 8RAR. Mr White: There are all sorts of things like that scattered throughout these notes, Senior Member. He had him as a menswear shop assistant. I mean these are little anomalies. Whether or not they ultimately go to credit is a different question. In my submission they don't. Senior Member: I mean look at his own statement, paragraph 17: Many patrols went out each night and many soldiers were brought in injured as a result of booby traps and clashes with the Vietnamese. Now, if he's talking about [V]ung Tau he's lying through his teeth. The only danger to any Australian soldier in Vung Tau was booze and bar girls. Mr White: None of that has ever been put to the applicant. Senior Member: No, it hasn't been and that's my caveat, it never has. Mr White: No. Senior Member: But going through the reports it's clear that you know it's a very confused history. Mr White: First of all it hasn't been challenged. Secondly, the Tribunal is prohibited from relying on its own knowledge. Senior Member: Lucky for your client. Mr White: Well, it would place us in an incredibly difficult position even though the Tribunal has now at the end of the case said what his view is about [V]ung Tau. Senior Member: Well, let me say this much. I'm certainly very conscious of the laws of evidence and that Tribunals particularly should not place their own opinions or experience in the place of evidence and as you've pointed out there has been no challenge. What I am saying is though that I have certain views as to over-emphasis in the affidavit and what we term or have termed are very confusing histories taken by various medical practitioners, so that it would not - and I want to hear you on this - I can certainly for myself take into account that some of the histories are of themselves inconsistent and any evidence must be taken into account that the applicant for many reasons, PTSD plus his alcoholism, etcetera he's a poor historian. Mr White: Well, it may be an additional factor as well if the Tribunal please and that is the questions asked might also play a part in differences - I don't say inconsistencies - between one report and another. So in my submission it's not just the applicant being a poor historian for whatever reason but what was asked I think has changed over the years as well. It's clear from Dr Dinnen once the PTSD was acknowledged as - - - Senior Member: What he's asked is one thing but a history is another thing. Mr White: Suffice to say that if there were challenges to that then no doubt the applicant would have given evidence about things like that but it [wasn't] done. (Emphasis added.)

[18]

(b) The Tribunal's Reasons 33 The appellant relies upon some number of passages in the Tribunal's reasons which, when considered in the context of the Senior Member's comments during the hearing, are said to "have the effect of conveying an appearance of impermissible bias in the actual decision to a reasonable and intelligent lay observer": Vakauta at 573. I set these out in order: 17. On 10 September 1970 the Applicant commenced his Vietnam service, being posted to 2nd Australian Ordnance Depot at Vung Tau. Although the Applicant has given accounts of his service in South Vietnam, we regard that account as exaggerated. It is unfortunate that the Respondent did not investigate the Applicant's claims more thoroughly. Had the services of a research organisation such as "Writeway" been engaged, their report would have been of material assistance to the Tribunal. 25. Following discharge from the Army the Applicant returned to live at Woodonga with his wife. For a period of months he did not work but contented himself with going to the hotel each day and drinking until he had run out of money. Asked about his source of income at this time, he told this Tribunal that his wife was working, whereas he had told the previous Tribunal his wife was not working. (Emphasis added.) 29. Whereas the Applicant claims that a supervisor informed him he was to be "sacked" because of his frequent absences, there is no evidence that he received any warnings from his employers that his attendance record or work was unsatisfactory. We find it difficult to believe that the Applicant would have been peremptorily dismissed from employment with a Commonwealth Authority without first being subjected to a formal warning. 30. Apparently after voluntarily terminating his employment with the Department of Army the Applicant and his wife moved to Sydney. They lived on the Northern Beaches, and we know from the Applicant's Record of Service that at a time he was in the Army, his mother was living at Fairlight which is a suburb of the Northern Beaches. Upon arriving in Sydney the Applicant did not initially seek employment but contented himself with attending hotels. After about one month, because he needed money, he obtained a paid job as a lube operator, lasting for some three months. The Applicant then purchased an orange juice run. This franchised business failed because the Applicant did not devote enough time and attention to it. He places the failure to properly attend to the business upon his frequenting hotels. (Emphasis added.) 34. Despite the Applicant maintaining that he was unable to retain employment because of his alcoholism and the effects of his PTSD, document T97, p220, is a reference dated 4 July 1977 which concludes "I will be sorry to loose him but he goes with my best wishes for the future". Whereas document T97, p221, is a reference from the Secretary Manager of the Cowra Services Club Ltd which reads inter alia, "Graham carried out his duties in a satisfactory and competent manner and I would have no hesitation in recommending him for a similar position". We are not persuaded to take those expressions as to his worth at other than face value. 35. In cross-examination the Applicant conceded that when he obtained the job at Bandiana he was able to perform the tasks required of him, and that at any time he needed to get a job he was able to get one. We are therefore satisfied that the Applicant has attempted to exaggerate the effects of his disabilities in his obtaining and retaining employment. 63. Post discharge the Applicant did not immediately seek work but on his account was drinking heavily. However, he did ultimately obtain a job and although he says he left before he could be sacked, there is no evidence of any official warning that his behaviour was placing his job in jeopardy. He and his then wife moved to Sydney and again he was able to obtain employment when he felt of the need. 64. The Applicant claimed that his real problem was the inability to retain employment due to his alcohol abuse. This statement does not fit with the very positive references the Applicant obtained from the Cowra Services Club and the Galloping Grape Restaurant. 68. Whereas it is not now disputed that the Applicant does have PTSD and alcohol dependence, the evidence is that the symptoms of PTSD, if they affected the Applicant at all at time of discharge, were mild in the extreme. Likewise, his alcohol dependence was present but given the references referred to above and his ability to obtain employment whenever he needed to, we find that he has exaggerated it effects upon him at time of discharge and thereafter until probably about 1979 - the time of his first conviction for an alcohol-related offence. 34 As to the Tribunal's final comment, I would note in passing that, in his affidavit that was before the Tribunal, Mr Shingles noted that: On or about 13/12/73 I lost my driving licence for three years as a result of drink driving.

[19]

Consideration 35 I will consider first the bias appeal and then will refer briefly to procedural fairness. 36 Though the Federal Magistrate appears to have made a finding of actual bias because of the Senior Member's comments at the hearing, my own view is that the proper characterisation of the matter at that point in the Tribunal's review was that the circumstances would have founded a reasonable apprehension of bias in the Senior Member. The parties to the appeal have accepted the appropriateness of this characterisation of the position. 37 Where the parties part company is on the question whether the appellant waived its right to object. The respondent contends that the appellant had reasonable time after the hearing within which to raise the bias issue but did not do so. He was legally represented. He merely waited until the decision was made and, finding it to be adverse, objected. It was too late. The right, it is said, had been waived. 38 The appellant's case in contrast is that, notwithstanding the Tribunal's comments at the hearing, counsel did challenge the senior Member who then appeared in the comments he made (at Tr 74) to have retreated. It was in these circumstances not unreasonable not to object to the Senior Member continuing to sit. 39 While it is not strictly necessary for me to express a final conclusion on this difference, my own view accords with the appellant's submission. The appellant, having raised the issues of Mr Shingles' credit not having been challenged and of the impropriety of the Senior Member relying on his own knowledge, the response made by the Senior Member was sufficient to make it unnecessary to object to his continuing to sit: cf Vakauta at 587 per Toohey J. The Senior Member's comments could reasonably be taken to signal a retreat to the confines of what was permissible to an administrative decision-maker. 40 I am in consequence not satisfied that the right to object was waived. I consider the Federal Magistrate erred in so concluding. 41 The fundamental issue raised in Mr Shingles' bias appeal is whether the Tribunal's decision, considered in the context of the comments made at the hearing, has the effect of conveying "the appearance of impermissible bias in the actual decision". I consider that it does. The reasonable and intelligent lay observer might reasonably apprehend, in light of the Senior Member's comments, commentary and attitudes revealed at the hearing relating to Mr Shingles' war service, that Mr Shingles' claim might have been prejudged and that the evidence of this in the decision itself was afforded both in how the Tribunal characterised (disparagingly) Mr Shingles' own evidence on his obtaining and retaining employment and in the tone of some of the language used to describe his evidence (eg "For a period of months he did not work but contented himself with going to the hotel"). I am satisfied that the decision arrived at might reasonably be said to have been contrived by a preconceived view taken of Mr Shingles with the consequence that the case he advanced might not have been fairly addressed on its merits. 42 I am not concerned to analyse the Tribunal's actual thought processes or to identify what was done by the Tribunal in reaching its decision: Jia, at [185]. Nonetheless, against the background of the Tribunal's conceded apparent bias at the hearing stage, I am satisfied the reasonable observer might well conclude that the attitudes and predisposition to Mr Shingles there manifest, were not curbed as the Senior Member's retreat might have suggested. Rather, they were reflected in the Reasons for Decision and particularly was this so in the manner in which the Tribunal used the evidence to reach the finding that (at Reasons [35]): … the Applicant has attempted to exaggerate the effects of his disabilities in obtaining and retaining employment. In this the lay observer might properly have said the Tribunal made an issue of a matter that was not manifest as an issue to be addressed in the case with which the Tribunal had to deal. 43 This leads to the second basis of the Appellant's case before me.