Vata-Meyer v Commonwealth of Australia

THE NATURE OF THE COMPLAINT 17 The scope of the complaint made by Ms Vata-Meyer to the Commission and to the court below was wider than the complaint agitated on the appeal. The complaint made to the Commission alleged unlawful discrimination based on race, colour, descent or national or ethnic origin (which will be referred to as racial discrimination) in the way the Department dealt with a number of Ms Vata-Meyer's employment and performance issues, in the conduct of Angus Lee, the second respondent, on 28 September 2011, and in the way in which the Department investigated and dealt with that conduct. 18 The appeal, on the other hand, was confined to the primary judge's findings on the allegations that the conduct of Mr Lee constituted unlawful racial discrimination contrary to s 9 of the Act and that the Commonwealth was vicariously liable for his conduct under s 18A of the Act. No relief was sought against the third to eighth respondents. Their conduct was principally relevant to issues which did not arise or were not pressed on the appeal. Nonetheless, it is necessary to explain briefly their functions in the Department in order to understand parts of the evidence on the relevant issues. 19 Margaret Leggett, the fourth respondent, was the director of People Policy in the Branch and Ms Vata-Meyer's direct manager. She was alleged to have been present at the events on 28 September 2011. Mr Ben Wyers, the fifth respondent, was the branch manager and Ms Vata-Meyer's manager twice removed. Ms Vicki Rundle, the sixth respondent, was the group manager of People and Organisational Development of the Department and Ms Vata-Meyer's manager three times removed. Mr James Halligan, the seventh respondent, was the assistant director of the Branch and Ms Vata-Meyer's supervisor from August 2011 to February 2012. Ms Jennifer Roylance, the eighth respondent, was the Diversity and Disability Coordinator of the Branch and Ms Vata-Meyer's supervisor from July 2011 to August 2011. She was alleged to have been present at the events of 28 September 2011. Ms Lisa Paul, the third respondent, was the Secretary of the Department.

THE EVENTS OF 28 sEPTEMBER 2011 AS DESCRIBED IN THE COMPLAINT 20 Anything less than a reproduction of the entire complaint about the events of 28 September 2011 would fail to do justice or describe adequately the circumstances as Ms Vata-Meyer saw them. For this reason we have chosen not to paraphrase or abbreviate her description. 21 Ms Vata-Meyer wrote: Wednesday 28 September Time: Approximately 2:30pm Present: Angus Lee, Melissa Beban and Rebecca Jeffery All three staff gathered around Ms Jeffery's desk to discuss work related matters. Four of us (Ms Jeffery, Ms Beban, Mr Lee and I) share the same coral. I walked around to both work areas offering biscuits to everyone which I owned. I offered the biscuits to the three of them in which two replied, "No thank you". Mr Lee immediately responded saying, "Uh no thanks, have some black babies" pointing to a packet of lollies on the table known as 'Chikos' (rubber chocolate lollies resembling little men). Jenny Roylance was walking past towards her desk in the next coral over at the same time this statement was said by Mr Lee. All of them initially had a chuckle to themselves until Ms Beban quickly interjected in an attempt to correct Mr Lee's statement by saying, in a soft tone of voice, "Oh Gus you can't talk like that" then turned to face her own computer. I responded in a calm voice and said to all of them, "Just speak what's on your mind. I can take it". There was no further comment made. I then sat down at my desk. About 5 minutes later I left the work area to go the kitchen to make myself a pot of tea. It was there I met Ms Cloudy [another Indigenous employee] and raised my concerns about Mr Lee's behaviour. Her initial reaction was surprise and shock because he is an injury prevention officer in occupational health and safety in human resource management. She was not surprised by my claims of racial discrimination within DEEWR [the Department] but by the audacity of Mr Lee's comments because of his position and role in human resource management. Again, there is historical evidence, not only in Australia but in other parts of the world, of Indigenous babies being subjected to "games" at the hands of non-Indigenous people. These "games" were played with the intention to outwardly murder Indigenous babies. It sickens me to even have to make this reference. I returned to my desk and continued working. Sometime later a male worker from next door in the direction of case management section walked in to our work area to talk to Ms Jeffrey, Mr Lee and Ms Beban. They discussed work related matters. I did not pay much attention to the content and what was spoken. Towards the end of their conversation Mr Lee said something out of place and from their reaction, laughter broke out. A short time later the male worker left the work area and returned in the same way through the door in which he came from. When the three of them finished their meeting, Mr Lee stood up and spoke in a loud voice and said, "It leaked out of my mouth, it was obviously what I was thinking at the time", seemingly proud and confident of his own remarks. I turned my chair around to face all three of them and stood up to face Mr Lee. Ms Jeffery and Ms Beban sensed something was out of order and immediately raced over to the next coral and left me and Mr Lee standing and facing each other. I seized the opportunity and asked him a direct question, demanding a response as why he referred to the packet as black babies because he seemed to think it was funny and so did the others until they realised this was not a joke anymore. I said, "Tell me, did the black babies leak out of your mouth too, was it your conscious mind speaking or your subconscious mind speaking because it was obviously what you were thinking at the time?" He continued to face me. I picked up the packet of lollies and said, "You know the saying, once you've had black there's no going back" and further enunciated my dissatisfaction by my throwing the packet of lollies down on Mr Lee's desk right in front of him, indicating my total disgust because of his lack of respect of towards people of colour. I further stated in a loud and clear voice so that everyone in the next coral could hear and said, "In fact have the whole packet. Have some more black babies". He responded, "I think I might" but in a quiet cocky tone of voice so no one else could hear except me. I stood there still facing him for about 5-8 seconds and still no response to my question. I then turned away and walked to the printing machine nearest to the pay section area. I returned to my desk space and continued to work. It was only then that I learned that smoke/afternoon tea had been organised by our section. This usually takes place in the next coral where Ms Beban and Ms Jeffery escaped to when I confronted Mr Lee earlier after their team meeting. Time: Approximately 3:30pm Present: Margaret Leggett, Angus Lee, Melissa Beban, Rebecca Jeffery, Jenny Roylance, Maddy Dow, James Kennedy, Carol Moran and Kasey Cloudy Purpose: Staff afternoon tea to welcome new member Caty Cafrae, to the team After collecting my printed material I returned to my desk thinking maybe I should try to engage in some civil discussion. I waited for about for about 2-3 minutes then asked Mr Lee, "What time is afternoon tea?" He replied, "Now". He rose from his desk to make his way to the next coral and said to me, "You coming mate?" Even up until now, no apology was forthcoming or any attempt to clarify what was obvious to everyone in the workplace my disapproval of the term "black babies" and the manner and conduct in how it was delivered to target and slur black people in general. I responded yes. I then noticed in his hand the packet of lollies which lead me to believe that Mr Lee intended to continue with his offensive behaviour during staff afternoon tea. I followed him to our afternoon tea area where we all gathered. Mr Lee was the first person sitting at the round table. The packet of lollies was placed on the table. I walked up to the table and this time I made it blatantly clear in a very loud and steady voice for every staff member to hear in our coral, including Ms Leggett who was standing next to Mr Kennedy at the time. I picked up the packet of lollies and said, "Here you go Gus, have some more black babies" and I put the packet in his shirt pocket. "You know what they say, once you've had black there's no going back. Have some more black babies" This was my way once again to show everyone that I was highly offended with the term black babies and realised now that his comment was intended to be interpreted as a racial slur against me and Ms Cloudy. Mr Lee once again made no attempt to query, question, clarify my statement and neither did anyone else in the team. No staff member questioned Mr Lee's behaviour but by this time it was clearly obvious to all staff that the term "black babies" was offensive due to my actions and conduct. During afternoon tea, an idle chat about food etc. took place and a conversation transpired to my right between Ms Beban and Ms Jeffery. Ms Cloudy sat to my right, and continuing on, Ms Beban, Ms Jeffery, Ms Leggett and Mr Lee. Ms Roylance remained behind her desk but occasionally got up to have something to eat. Ms Dow, Ms Moran, Mr Kennedy and Ms Cafrae sat to my left in that order. The conversation between Ms Beban and Ms Jeffery was interjected by Mr Lee and he stated, "Like Michael Jackson". No one laughed with him and no one questioned his statement. He didn't say anything after that. The person closest to Mr Lee was Ms Leggett. I picked up the plate that had cup cakes made by Ms Jeffery and in front of everyone reached out to Mr Lee and said, "Gus would you like some cake - it's really nice?" He took a piece. Once again, I was offended by the Michael Jackson remark but my intention by these actions was an attempt to try to let it go. Idle chat continued this time around cheese because someone brought in cheese and crackers. Ms Cloudy asked, "What's the difference between camembert and brie?" Ms Moran was explaining then all of a sudden Mr Lee calls out, "I like Coon." No one laughed with him and no one questioned him and then he said again, "I like Coon cheese". No senior staff made any attempt to correct him. The closest person sitting next him was Ms Leggett. Somehow, Mr Lee seemed to think that because of his continual remarks in the order of: black babies, Michael Jackson and Coon cheese without any staff reprimanding his behaviour it appeared he may have had the support of the other staff members or even spoke his thoughts on their behalf. Neither I nor Ms Cloudy responded to the "Coon" statement as we were both shocked and disgusted at Mr Lee's blatant and continual racial slurs. On both occasions when he made these remarks his eye contact was focused on Ms Jeffrey and Ms Beban and no one else. Approximately 5 minutes later, I decided to leave the group because I was highly offended by Mr Lee's statement about the Coon cheese and no longer felt able to participate. I stood up without saying a word, quietly wheeled my chair back to where I got it from (near Ms Moran's desk) and walked back to my desk. It was approximately 4:00pm. 22 Mr Lee's version of events was as follows: (1) On 28 September 2011 he bought "Chico" lollies to take to the afternoon tea. (2) Since he was a child, he and his parents had referred to Chicos as "black babies". (3) Before the afternoon tea, he offered the lollies to the people around him, including Ms Vata-Meyer, saying: "Here are some black babies", to which Ms Vata-Meyer replied: "What did you say?" and Mr Lee responded "Here are some black babies if you want, they are beautiful". (4) Neither he nor the others present laughed about that comment. (5) Ms Vata-Meyer later "became confrontational" and said words to the effect of "once you've had black, you'd never go back", which he perceived as a sexual reference that made him feel uncomfortable and to which he did not respond. (6) Ms Vata-Meyer then picked up the lollies, throwing them at him saying "Here, have the whole packet. Have some more black babies", making it clear she was angry with him. (7) He did not understand why Ms Vata-Meyer was angry with him. (8) In their work area (but not at the afternoon tea, as Ms Vata-Meyer alleged) Ms Vata-Meyer placed the lollies in his shirt pocket while again saying "once you've had black there's no going back", which he also viewed as a "sexual reference", and "an accusation against [him]" but he did not understand "what she was accusing [him] of". (9) At the afternoon tea, he likely said words to the effect "Guys, here are some black babies". (10) Also during the afternoon tea there was a discussion about cheese where someone asked "What sort of cheese do you like, Gus?" to which Mr Lee replied "I just like plain old Coon cheese". He may have mentioned Coon cheese twice during this discussion but he did not think of the word "coon" "in the context of a racial slur". (11) He did not make any reference to Michael Jackson at the afternoon tea.

THE REASONS OF THE PRIMARY JUDGE 23 In relation to the conduct of Mr Lee and the response of management, the primary judge made the following findings of fact: 18. On 28 September 2011, in the presence of Ms Vata-Meyer and other team members, Mr Lee allegedly used the terms "black babies", "Michael Jackson" and "Coon cheese". Mr Lee denies using the term "Michael Jackson" but admits that he used the other terms. The following day Ms Leggett informed Ms Vata-Meyer that she would move to a new workstation closer to the Enterprise Bargaining team. On the same day Ms Vata-Meyer informed Ms Leggett about the incident with Mr Lee on 28 September. Ms Leggett met with Mr Lee to discuss the incident and he subsequently apologised to Ms Vata-Meyer and to another indigenous employee, Ms Kasey Cloudy. Mr Lee reported to Ms Leggett that his apologies were accepted. Ms Leggett also met with Ms Cloudy who informed her that her concerns about the incident had been addressed and Mr Lee's apology accepted. 19. On 4 October 2011 Ms Vata-Meyer wrote to the Secretary, Ms Paul, making a complaint regarding Mr Lee's remarks and the handling of her complaint by DEEWR. 20. On 7 October 2011 Mr Wyers met with Ms Vata-Meyer and Mr Ralph Lahey (Ms Vata-Meyer's support person) where Mr Wyers provided a copy of Ms Vata-Meyer's complaint to Ms Leggett and Mr Lee and asked them to respond in writing. Mr Wyers also met with Mr Lee and counselled him on his poor judgement and naivety in relation to the events of 28 September 2011. 21. Mr Lee responded in writing to Mr Wyers regarding Ms Vata-Meyer's complaint on 23 October 2011. 22. On 31 October 2011 Ms Leggett provided an email response to Mr Wyers regarding Ms Vata-Meyer's complaint, along with file notes of her discussions with Ms Vata-Meyers (sic), Mr Lee and Ms Cloudy prepared on 29 September 2011. 23. Mr Wyers spoke to Ms Vata-Meyer about the outcome of his investigation on 4 November 2011. … 28. On 22 November 2011 Ms Vata-Meyer wrote to Ms Paul regarding the 7 October 2011 meeting with Mr Wyers and complained about the lack of response to her 4 October 2011 complaint. 29. On 24 November 2011 Ms Paul sent an email to Ms Vata-Meyer regarding her complaint of 22 November 2011. 30. On 28 November 2011 Ms Vata-Meyer wrote to Ms Paul alleging racial discrimination, workplace bullying and harassment and detailing the events of 21-23 November 2011. Ms Vata-Meyer also complained of a "lack of disciplinary action from management at a local level". … 32. On either 9 December 2011 (or 18 December 2011 according to Ms Vata-Meyer), Ms Paul wrote to Ms Vata-Meyer in response to her complaint of 28 November 2011. … 34. On 19 December 2011 Mr Wyers met with Ms Vata-Meyer, Mr Lahey (Ms Vata-Meyer's support person) and Ms Rundle. During the meeting Ms Rundle agreed to review the responses of Mr Lee and Ms Leggett to Ms Vata-Meyer's complaint about them and to satisfy herself that Ms Leggett and Mr Wyers had treated the issues with the seriousness that they deserved and that Mr Lee's remorse was sincere. She also agreed to seek a work placement for Ms Vata-Meyer in an alternative team and to approach the Secretary (Ms Paul) regarding a request for a written apology on behalf of the Department. 35. Mr Lahey had concerns about this meeting and emailed Mr Wyers about them. … 37. On 6 February 2012 Ms Vata-Meyer sent a final letter of complaint to Ms Paul. [Footnotes omitted] 24 The primary judge then explained the claims which were before the court. So far as is relevant to the issues on the appeal, the explanation was as follows: 49. …Ms Vata-Meyer claims that on or about 28 September 2011, Mr Lee verbally insulted, humiliated and harassed Ms Vata-Meyer on the basis of her race, colour, descent or national or ethnic origin and that Ms Leggett condoned or acquiesced in the unlawful discriminatory conduct of Mr Lee in that she took no action to report the matter to the Department (including Ms Paul). 50. Ms Vata-Meyer also claims that on or about 7 October 2011 she met with Mr Wyers in his capacity as Branch Manager, People, Policy and Performance Branch, who accepted her allegations relating to Mr Lee. 51. …Ms Vata-Meyer claims that between September 2011 to April 2012, Ms Paul, Ms Leggett, Mr Wyers, Ms Rundle and Mr Halligan engaged in conduct that humiliated, harassed and intimidated her on the basis of her race, colour, descent or national or ethnic origin by failing to adequately investigate and manage Ms Vata-Meyer's complaint about the conduct of Mr Lee. 52. Ms Vata-Meyer claims that the Commonwealth is liable for the conduct of its officers because it failed to take any adequate steps to prevent the unlawful discriminatory conduct and that it failed to investigate the acts of Mr Lee or to take sufficient action to ensure he had been properly trained in particular, in relation to workplace anti-discrimination, bullying and harassment. 25 The primary judge then discussed a number of legal principles which he regarded as relevant to the resolution of the case. 26 At [57] his Honour said: The reference in s.9(1) of the RDA to a "distinction, exclusion, restriction or preference" is different from the words "less favourable treatment" under other Federal anti-discrimination legislation. Nevertheless, I accept that the section calls for a comparison between someone who has a particular characteristic, such as race, and someone without that characteristic. 27 Then, his Honour said that the act proscribed by s 9(1) need not be intentional. It is sufficient that it has the proscribed effect, that is, nullifying or impairing of a human right or fundamental freedom in the political, economic, social or other field of public life. His Honour then referred to the sources of such rights, although not specifically to the International Convention on the Elimination of All Forms of Racial Discrimination which is the centrally relevant source of the right in this case (s 9(2) of the Act). 28 The primary judge then addressed the meaning of the phrase "on an equal footing" in s 9(1) of the Act, and referred to Australian Medical Council v Wilson (1996) 68 FCR 46; [1996] FCA 591 and Baird v Queensland (2006) 156 FCR 451; [2006] FCAFC 162 and concluded that the phrase calls for a comparison between two groups, that is to say, one with the relevant characteristic and one without, although the comparator may be hypothetical. 29 The primary judge then considered whether racist remarks may constitute racial discrimination under s 9(1) of the Act, and cited passages from [76] to [78] of Qantas Airways Limited v Gama (2008) 167 FCR 537; [2008] FCAFC 69 (Gama) including: The making of a remark is an act. It may be that the remark involves a distinction because it is made to a particular person and not to others. The remark may convey no express or implicit reference to the person's race, colour, descent or national or ethnic origin. Nevertheless, a linkage may be drawn between the distinction effected by the remark and the person's race or other relevant characteristic by reason of the circumstances in which the remark was made or the fact that it was part of a pattern of remarks directed to that person and not to others of a different race or relevant characteristic. Where the remark, critical of one person in a group but not others, expressly or by implication links the criticism or denigration to that person's race then that linkage establishes both the distinction and its basis upon race. … The second attribute of an unlawful act under s 9(1) is that it have the purpose or effect of nullifying or impairing a person's recognition, enjoyment or exercise on an equal footing of any "human right or fundamental freedom ..." The denigration of an employee on the grounds of that person's race or other relevant attribute can properly be found to have the effect of impairing that person's enjoyment of his or her right to work or to just and favourable conditions of work. The question then is whether two or three racist remarks over a period of time can have such a purpose or effect. That is a matter of fact dependent upon the nature and circumstances of the remarks. … Undoubtedly remarks which are calculated to humiliate or demean an employee by reference to race, colour, descent or national or ethnic origin, are capable of having a very damaging impact on that person's perception of how he or she is regarded by fellow employees and his or her superiors. They may even affect their sense of self worth and thereby appreciably disadvantage them in their conditions of work. Much will depend upon the nature and circumstances of the remark. Occasional politically incorrect banter will be unlikely to have the requisite purpose or effect. The judgment is a matter of fact. 30 Then there was a lengthy discussion about the standard of proof which Ms Vata-Meyer needed to meet in order to establish her case. The standard of proof is stipulated by s 140(1) and (2) of the Evidence Act 1995 (Cth) (Evidence Act) which provides: (1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account: (a) the nature of the cause of action or defence; and (b) the nature of the subject-matter of the proceeding; and (c) the gravity of the matters alleged. 31 The primary judge correctly observed that the requirement in s 140(2) to take into account the gravity of the matter does not mean that the standard of proof is increased beyond the balance of probabilities. 32 This was followed by a discussion about the drawing of inferences apparently restricted to the liability of the Commonwealth. Thus, at [63] the primary judge said: [I]f it were established that the Commonwealth, through its officers, acted unreasonably, it would not necessarily follow that the action (or lack of action) was related to race. 33 Shortly afterwards his Honour stated at [64]: Ms Vata-Meyer, in order to succeed, must establish a connection between the impugned acts and her race. If there are innocent explanations which are consistent with the facts as established then she would be unable to do so. Thus, the mere failure to follow established practice and procedure in relation to a particular act does not establish that the act occurred because of race. 34 Then, his Honour quoted at length from the judgment of Raphael FM in Gama v Qantas Airways Ltd (No. 2) [2006] FMCA 1767 and concluded at [65]: I accept, from his Honour's observations, that in order to draw an inference the Court must be satisfied that it is more probable than not and the inference must follow from a given premise which is probably true and which is based on some syllogistic reasoning. That means that if there are conflicting inferences that can be drawn from the facts with equal degrees of probability then the Court should not draw any inference at all. Further, if there is a probable explanation for an action which is consistent with a non racial reason, then the Court could not draw an improbable inference that the act was done for a racial reason. 35 Following the discussion of legal principles, the primary judge set out his reasoning on the determination of the complaint. It is convenient to set out in full that part of the reasoning dealing with the disposition of the complaint involving the acts of Mr Lee: 66. The respondents concede that the strongest part of Ms Vata-Meyer's case concerns the actions of Mr Lee at an afternoon tea with other employees of the Department on 28 September 2011. Mr Lee brought a packet of chocolate flavoured jelly babies known as "Chicos" to the afternoon tea and offered them to those at the afternoon tea (including Ms Vata-Meyer and Ms Cloudy, both of whom are Aboriginal) with the words, "here are some black babies". It appears that his invitation was not taken up. It can reasonably be supposed that the act of inviting an Aboriginal person to eat "black babies" is likely to cause offence. It is plain from both the evidence of Ms Vata-Meyer and that of Mr Lee that Ms Vata-Meyer was offended. She returned the packet of Chicos to Mr Lee. Surprisingly, Mr Lee (as he concedes in his own evidence) made a second attempt to offer people "black babies" when he re-presented his packet of Chicos a short time later. Further, in response to a question from someone at the afternoon tea as to what sort of cheese he liked, Mr Lee responded "I just like plain old Coon cheese". 67. Under cross-examination, Mr Lee impressed me as a remarkably unsophisticated man. I described him during the course of oral argument as "obtuse". 68. It is possible that by making reference to "black babies" and "Coon cheese" Mr Lee was seeking to get a reaction from Ms Vata-Meyer. If so, he was successful. It is also possible that Mr Lee simply did not understand that his reference to "black babies" and "Coon cheese" might cause offence. That is what he asserted in his affidavit and maintained under cross-examination. Were it not for Mr Lee's obvious lack of sophistication, I would have had difficulty accepting that explanation. However, I am willing to give him the benefit of the doubt on the basis that he is simply obtuse. 69. Even though unintended, a racially offensive remark may impair a person's enjoyment of her right to work and to just and favourable conditions of work. There is little doubt, in my view, that an invitation to eat "black babies" is likely to offend an Aboriginal person. A statement of a preference for "Coon cheese" is of a different character. It is a well known and established brand of cheese and there is no necessary connection with race. The word "coon" has several meanings, only one of which is a racially pejorative one. 70. The evidence makes clear that Mr Lee was counselled about his remarks when Ms Vata-Meyer complained about them and that he apologised and showed genuine remorse when the offensive nature of his reference to "black babies" was explained to him. The Department acted promptly to deal with Ms Vata-Meyer's complaint and the offensive conduct was not repeated. In my opinion, provided that the investigation and resolution of Ms Vata-Meyer's complaint was adequate to the circumstances, the action of Mr Lee would not have impaired Ms Vata-Meyer's enjoyment of her right to work. In that regard, I acknowledge the observations of the Full Federal Court in Gama at [76]-[78]. 71. In the present case, Ms Vata-Meyer contends that the investigation of her complaints did not ensure her enjoyment of her right to work and just conditions of work as an Aboriginal person but further injured them. Ms Cloudy accepted Mr Lee's apology and treated the matter as closed thereafter. Ms Vata-Meyer did not. When the matter was not resolved to her satisfaction, she sought to escalate her complaint. 72. There is a dispute of fact as to who was present and heard Mr Lee's words. Ms Roylance conceded hearing one reference to "black babies" and I accept her evidence. Ms Leggett, while conceding that she was present for part of the afternoon tea, denies hearing the comments. The issue was drawn to her attention the following day by Ms Vata-Meyer and Ms Leggett acted immediately to deal with it. She undertook to speak to both Mr Lee and Ms Cloudy. In my view, her action was reasonable and appropriate to the circumstances. I accept her evidence that she did not hear the remarks at the time they were made. I do not accept Ms Vata-Meyer's claim that Ms Leggett condoned or acquiesced in the conduct of Mr Lee by failing to take action. 73. Likewise, Ms Paul and Mr Wyers acted reasonably and appropriately. Ms Paul, as the Secretary of the Department, could not be expected to deal personally with every issue of concern arising between staff. She instructed Mr Wyers to investigate. Mr Wyers was responsible for counselling Mr Lee. The Department chose to deal with the matter informally, consistently with its policy of using informal measures in the first instance. Having regard to the circumstances generally, and Mr Lee's prompt action in accepting criticism and apologising, I cannot say that the Department was wrong in failing to deal with the matter on a formal disciplinary basis. 74. I accept Mr Wyers' evidence concerning his investigation and action. Mr Wyers spoke to Ms Vata-Meyer initially and asked her what outcome she wanted. Then Mr Wyers spoke to Mr Lee and to Ms Leggett. Mr Lee denied any intention to offend but once Ms Leggett had explained to him the connotation of his words, he apologised both to Ms Vata-Meyer and to Ms Cloudy. Although Ms Vata-Meyer doubts the sincerity of his apology, I accept that Mr Lee accepted culpability at a very early stage. Mr Wyers considered that Mr Lee's remorse was sincere and genuine. He accepted that Mr Lee's conduct had not been intentional and counselled Mr Lee, given the inappropriateness of his conduct. Mr Wyers prepared a file note of what he had done. When Ms Vata-Meyer continued to attempt to escalate her complaint to Ms Paul, Mr Wyers made a more formal statement of his findings. 75. Ms Paul was ultimately willing to meet Ms Vata-Meyer to discuss her concerns. The fact that such a meeting did not take place was not the fault of Ms Paul. 76. Ms Vata-Meyer's (sic) complains that Mr Wyers acted improperly in accepting Mr Lee's apology on her behalf. This is a simple misunderstanding. Mr Wyers gave evidence that he did no such thing. I accept his evidence. What Mr Wyers did was accept the genuineness of Mr Lee's apology. He was entitled to make his own assessment on that issue. 77. I find that the action taken by the Department to deal with Ms Vata-Meyer's complaint about the conduct of Mr Lee was reasonable and adequate and appropriate to the circumstances. That action should have ensured that Ms Vata-Meyer was not injured in the enjoyment of her work and in enjoying fair conditions of work as a consequence of the action of Mr Lee. [Emphasis added.]

THE ISSUES ON THE APPEAL 36 It was generally accepted by the parties, correctly, that the reasoning of the primary judge was unclear, difficult to understand and unsatisfactory. Ms Baw, who appeared for Ms Vata-Meyer on the appeal (but not in the Court below), and Mr Seck, who appeared for the respondents, made conscientious attempts in the written submissions to articulate the competing arguments. But the relevant issues emerged with greater clarity in the course of the oral argument. 37 In response to a request from the Court, following the hearing of the appeal, the parties filed a document entitled 'Agreed Issues in Dispute', which sought to isolate the issues in dispute as clarified in the course of the hearing. To a degree, however, they failed to come to terms with the primary judge's findings and, more particularly, what his Honour failed to find. 38 That document reads as follows: At the end of the hearing of the appeal before the Full Court of the Federal Court on Wednesday 25 February 2015, the Court asked the parties to provide within 7 days a joint document of the Agreed Issues in Dispute by reference to the remaining grounds in their respective pleadings. Accordingly, this document is provided to the Court pursuant to that request. 1. Statutory Construction: what is the correct test to be applied under s.9(1) of the Racial Discrimination Act (Cth) 1975 ("the Act")? a) Did the lower court correctly state the correct test to apply at Decision [57]; the first two sentences of [64]; and the last sentence of [65] - including the authority relied upon at footnote 37? b) Can the key elements of s.9(1) of the Act broadly be divided into: (a) "any act"; (b) "based on race"; (c) "purpose"; (d) "or effect"; and (e) "nullifying or impairing ... any human rights or fundamental freedom". 2. Application: Did the lower court apply the correct test? Or did the court take into account irrelevant considerations, or fail to take into account relevant considerations? a) Did the lower court erroneously impose an irrelevant test of intention and motivation by finding an ''innocent explanation" when it was irrelevant to: i) whether the acts complained of involved a distinction based on race; or ii) whether the acts complained of had the requisite "purpose"; or iii) whether, in the alternative, the acts had the requisite "effect" (see Decision - second sentence of [64]; the last sentence of [65]; [67] & [68])? b) Did the lower Court fail to consider if the Second Respondent had more than one purpose for his acts, in light of the deeming provision of s.18 of the Act? c) In determining the "effect" of the acts, did the lower Court fail to consider: i) Ms Vata-Meyer's evidence of the context and circumstance in which the acts were performed; ii) the cumulative effect of those circumstances; and iii) if there were any inconsistencies between her evidence and that of the respondents' evidence did the court fail to reconcile those differences? d) In determining whether the alleged acts had the "purpose" or in the alternative the "effect" of nullifying or impairing the enjoyment or exercise, on an equal footing, of the right to just and favourable conditions of work at Decision [70], did the lower Court fail to consider: i) Ms Vata-Meyer's evidence of the context and circumstance of the subsequent complaints handling (including the circumstances of the apology); ii) the cumulative effect of those circumstances; and iii) if there were any inconsistencies between her evidence and that of the Second Respondent's evidence, did the court fail to reconcile those differences? e) In determining the nullification or impairment, the lower Court asked whether the subsequent complaints handling process was "adequate to the circumstance" (at Decision [70]), but was the question considered only on the basis of the irrelevant finding of an "innocent explanation" for the acts? f) Did the lower Court apply the correct standard of proof (see Decision [67]-[68] the "possibility" of an innocent explanation)? g) Did the Second Respondent's comments, as found by the primary judge at [66] of the Decision, involve a distinction, exclusion, restriction or preference based on the Appellant's race? h) Did the Second Respondent's comments, made in the course of a single afternoon, have the purpose or effect of impairing the recognition, enjoyment or exercise, on an equal footing, of the right to just and favourable conditions of work under Article 5(e)(i) of the Convention on the Elimination of All Forms of Racial Discrimination (see Qantas Airways Limited v Gama (2008) 167 FCR 537 at [78])? i) Where, in response to a complaint of racial discrimination, a primary judge has found that: i) the employer has undertaken an investigation and resolution of the complaint reasonable, adequate and appropriate to the circumstances (Decision [70]; [72], [73] and [77]); ii) appropriate action has been taken against the perpetrator (Decision [73]); and iii) the perpetrator had taken prompt action in accepting criticism and apologising to the appellant (Decision [73]) has the appellant's right to just and favourable conditions of work been nullified or impaired? 3. Drawing of Inferences: Did the lower Court err in the drawing of inferences by failing to take into account relevant considerations and taking into account irrelevant considerations? a) In drawing an inference on whether "Coon" was "based on race" and/or the "effect" of the term (at Decision [69]), did the lower Court fail to consider the context and circumstance in which the term was said, and the cumulative effect of those circumstances? b) By drawing inferences from the demeanour of the Second Respondent in court to find an "innocent explanation" (at Decision [67]-[68]), did the lower court take into account an irrelevant consideration? c) Did the primary judge err in finding that the act of inviting an Aboriginal person to eat "black babies" was likely to cause offence (as His Honour did at [66] and [69]), without also holding that whether a comment will cause offence will depend on the particular circumstances in which the comment was made? [Footnotes omitted, emphasis in original.] 39 What follows is intended to highlight the significant elements of the parties' final positions.

The appellant's contentions 40 Ms Baw contended that the primary judge was wrong to find in [68] that Mr Lee did not understand that his remarks about "black babies" and his preference for "coon" might cause offence. The finding was based almost entirely on his Honour's assessment of Mr Lee's demeanour in the witness box as "obtuse" and "remarkably unsophisticated". 41 Ms Baw drew attention to s 18 of the Act and submitted that the primary judge failed to consider whether Mr Lee acted for more than one reason. 42 Then, Ms Baw argued that the primary judge was wrong to find that Mr Lee's reference to "coon" was not racially pejorative. She submitted that his Honour could only have made the finding by failing to take into account the full circumstances in which the comment was made. Those circumstances, she argued, gave rise to the inference that the use of the word was an act based on race and had the effect of impairing Ms Vata-Meyer's enjoyment of her right to work or to favourable conditions of work. Those circumstances were as follows. Mr Lee made the remark about black babies which his Honour found was likely to offend an Aboriginal person and did in fact, to Mr Lee's knowledge, offend Ms Vata-Meyer and the "coon" remark was made shortly afterwards at the same staff gathering. Mr Lee brought the "black babies" for the purpose of the event and hence had thought about what he was doing. It was likely that the "coon" reference was a reinforcement by Mr Lee of his earlier actions. Mr Lee knew of workplace standards because he was employed as a Work Health Safety Advisor. He had completed cross-cultural awareness training within the previous two years which included training about indigenous issues. Further, Ms Vata-Meyer gave evidence that he volunteered the "coon" comment; it was not responsive to any question directed to him. His Honour found otherwise. But he did not reject Ms Vata-Meyer's evidence and did not explain why he made a finding inconsistent with it. 43 Ms Baw submitted that, once his Honour found that the "black babies" remark was racially offensive and in fact offended Ms Vata-Meyer, the unlawful discrimination was established. The later investigation was not relevant. It did not remove the impairment of Ms Vata-Meyer's rights which had already occurred. 44 If, however, the investigation and resolution of the complaint about Mr Lee's conduct was relevant to the establishment of the impairment of Ms Vata-Meyer's rights, then Ms Baw contended that the primary judge was wrong to conclude that the conduct of Mr Lee did not impair her rights because the complaint was handled appropriately. The fact finding exercise ignored the evidence of Ms Vata-Meyer and only took account of Mr Lee's subjective views. The relevant evidence of Ms Vata-Meyer was to the following effect. She did not believe that Mr Lee said the remarks innocently. Her supervisor, Ms Leggett, was present at the afternoon tea and witnessed the acts of Mr Lee but did nothing. Ms Vata-Meyer did not accept Mr Lee's apology. She did not believe his apology was genuine. It was only after speaking with Ms Leggett that Mr Lee apologised although he had ample opportunity to have done so during the previous afternoon. Ms Vata-Meyer did not believe that the Department dealt promptly with the complaint. The next day, when Ms Vata-Meyer's supervisor asked to speak to her, she thought it was to discuss what had occurred the previous day, as she believed that Ms Leggett knew that she was offended by the acts of Mr Lee. Instead Ms Vata-Meyer was made to move workstations away from Mr Lee without any mention of the events at the afternoon tea. Ms Vata-Meyer believed that she was being moved to protect Mr Lee and the issue of racial discrimination in the workplace was not being dealt with. Ms Vata-Meyer was very disappointed with her superior's handling of the matter and had to return to Ms Leggett's office at a later time to bring the matter to her attention. 45 Ms Baw argued that, by finding that it was possible that Mr Lee did not understand his remarks might cause offence and by failing to find that Mr Lee had the unlawful purpose, the primary judge required a level of proof in excess of what was required by s 140 of the Evidence Act. Ms Vata-Meyer had to establish a contravention of the Act on the balance of probabilities. In deciding whether he was satisfied to that standard, it was necessary to take into account the gravity of the matters alleged (Evidence Act, s 140(2)), but this does not establish a third standard of proof. The primary judge cited a passage concerning the standard of proof from the judgment of Branson J in Gama at [127]-[130] with which French and Jacobson JJ agreed at [110]. However, Ms Baw argued that the primary judge omitted reference to the balance of the judgment, which held that the gravity of allegations had to be assessed in every case and allegations of racial discrimination are not necessarily of such gravity as to call for strict or especially strong proof. Had that approach been applied, Ms Baw submitted that Ms Vata-Meyer's allegation that Mr Lee acted intentionally would not have been rejected only because of the possibility that Mr Lee did not understand that his reference to "black babies" and Coon cheese might cause offence. The standard of proof applied by the primary judge approached the criminal standard and favoured Mr Lee by giving him "the benefit of the doubt on the basis that he was simply obtuse" (at [68]). 46 Ms Baw also argued that Ms Vata-Meyer had been denied procedural fairness in the hearing before the Federal Circuit Court. Ms Vata-Meyer gave evidence that Ms Leggett was present and seated in a position which enabled her to hear the remarks made by Mr Lee at the afternoon tea. This evidence was important in establishing whether the Department responded adequately to Ms Vata-Meyer's complaint. Her case was that Ms Leggett, having heard the remarks, took no steps to respond at the time, and failed to report the matter for further action by others. Then, when Ms Vata-Meyer attempted to make submissions about the inconsistency between her evidence and Ms Leggett's evidence on this subject his Honour interjected, accepted that there was an inconsistency, but asked Ms Vata-Meyer to move to the next topic. He did not let her elaborate about the inconsistency. Then, in the judgment at [46] he said that he did not need to reconcile the inconsistencies in the recall of witnesses on matters of detail because the essential events were not in dispute. In fact, this inconsistency was not a matter of detail. As an unrepresented litigant Ms Vata-Meyer should have been permitted to complete her submission before his Honour rejected her version of the events.

The respondents' contentions 47 For the respondents Mr Seck contended that the first issue was whether the acts of Mr Lee involved a distinction within the meaning of s 9(1). The references to "black babies" and "coon" might have a capacity to convey a racial or a non-racial meaning. The evidence showed, so it was argued, that the remarks were not directed to Ms Vata-Meyer, or addressed in denigrating terms, but were made in a group setting and were used to describe types of food. 48 Next, Mr Seck submitted that it was necessary to determine whether the acts were based on race within the meaning of s 9(1). Merely because an expression may have a racial meaning it does not follow that such a meaning was conveyed to give rise to a distinction based on race. 49 Then, s 9(1) requires a determination whether the act had the necessary purpose or effect. The causal nexus between the act and a person's race may be established subjectively or objectively. The reference in s 9(1) to purpose or effect means that the connection can be demonstrated by showing intent or differential impact on a person of a particular race relative to other races. 50 Mr Seck emphasised that, whether Mr Lee's remarks had the effect of nullifying or impairing the enjoyment of Ms Vata-Meyer's right to just and favourable conditions at work depends on the nature and circumstances in which the remarks were made. Those circumstances included that the Chicos are a well-known and popular lolly in Australia and are a chocolate flavoured jelly baby. Mr Seck pointed to the evidence that during his childhood Mr Lee and his parents commonly referred to Chicos as "black babies". Mr Lee offered the Chicos to a group of employees comprising both Aboriginal and non-Aboriginal people, not just to Ms Vata-Meyer. The remarks about Coon cheese referred to a popular brand of cheese. Mr Lee did not initiate the conversation about people's favourite cheeses but responded to a question. And all the remarks were made during the course the course of a single afternoon. 51 Mr Seck argued that the primary judge reviewed the context of the remarks, found that they were made innocently and were not directed to Ms Vata-Meyer based on her race. He referred to his Honour's findings that Mr Lee had an obvious lack of sophistication and was obtuse. He contended that his Honour was in the best position to make that assessment. Unlike in Gama, he argued, the remarks did not involve a racist slur and did not form part of a systemic course of conduct or an endemic racist culture in the workplace. At worst, Mr Seck submitted, the remarks were a single instance of politically incorrect banter for which Mr Lee immediately apologised after being made aware that Ms Vata-Meyer was offended by them. 52 Finally, Mr Seck addressed the question whether the purpose or effect of the remarks related to the enjoyment of the right to just and fair working conditions. In the written submissions, he argued at [17] - [19]: 17. Under Australian discrimination law, a remark made in a single conversation based on a prohibited characteristic (such as sex or race) does not constitute unlawful discrimination unless it forms part of a pattern of conduct that creates a hostile or demeaning work environment. Remarks made during a single afternoon at work will not create a "demeaning or hostile" work environment that have the purpose or effect of impairing or nullifying an employee's right to enjoy just and favourable conditions of work. 18. Even if the right to just and favourable conditions of work could apply to remarks made during a single afternoon, the content of such a right must include whether an employer has taken reasonable steps to prevent the remarks and taken appropriate steps to address complaints about the making of such remarks. The primary judge construed the right to encompass these additional dimensions. This approach provides practical and meaningful substance to the right to just and favourable conditions of work. 19. Whether or not the remarks have the purpose or effect of nullifying the exercise of the right to just and fair working conditions must also involve a consideration of whether the Respondents had taken reasonable steps to prevent the remarks and, once made aware of a complaint about the remarks, adequately addressed the substance of the complaint. If an employer adequately addresses the complaint, then the effect of the remark is unlikely to be that the employee's just and favourable conditions of work are nullified or impaired. So, for example, if an investigation into a complaint reveals that the remarks were largely innocuous in nature and that the employee has expressed genuine contrition and has apologised for them, then the requisite purpose or effect will be unlikely to be shown. In the present case, the primary judge found that the Respondents properly investigated and resolved the complaint including by Mr Lee's prompt apology and sincere remorse for any offence caused. [Footnotes omitted.] 53 Mr Seck's submissions methodically addressed each of the elements of s 9(1) and constructed a case that the facts before the Federal Circuit Court did not satisfy those requirements. As we explain later in these reasons, an underlying error of the Federal Circuit Court judgment is that it did not address the elements of the section. Mr Seck made a case for the respondents which did not reflect the primary judge's reasoning. Possibly anticipating this difficulty, on 6 February 2015, the respondents filed an Amended Notice of Contention, which sought to uphold the orders made by the primary judge on the basis that Mr Lee's remarks did not fall within s 9(1) of the Act. The Amended Notice of Contention set out the following grounds: 1. The primary Judge erred in not holding that the Second Respondent's comments set out in paragraph 66 of the Judgment did not breach s 9(1) of the Racial Discrimination Act 1975 (Cth) in that: (a) the Second Respondent's comments did not make a distinction, exclusion, restriction or preference based on race, colour, descent or national or ethnic origin; (b) the Second Respondent's comments were not calculated to humiliate or demean the Appellant by reference to her race, colour, descent or national or ethnic origin but were an instance of "occasionally politically incorrect banter" which, in the circumstances, did not have the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of any human right or fundamental freedom of the Appellant in the political, economic, social, cultural or any other field of public life (see Qantas Airways Limited v Gama (2008) 167 FCR 537 at [78]); (c) the right to be free from a single instance of an inappropriate racial comment made in the workplace by one employee is not a human right or fundamental freedom in the political, economic, social, cultural or any other field of public life; and (d) the investigation and resolution of the Appellant's complaint of alleged racial discrimination did not constitute a human right or fundamental freedom in the political, economic, social, cultural or any other field of public life. 54 On 4 February 2015, the respondents also filed a Notice of Cross-Appeal, challenging his Honour's conclusion in [66] and [69] that the "black babies" remarks were likely to cause offence to an Aboriginal person. The cross-appeal is incompetent, however, because it challenges a finding made in the reasons of the Federal Circuit Court but not the order. Even if the cross-appeal succeeded, the order would not be disturbed. 55 Mr Seck then submitted that the primary judge correctly set out the principles applicable to the standard of proof in discrimination cases. He said that his Honour analysed the evidence in [66] and [67] and determined on the balance of probabilities whether the remarks concerning black babies and Coon cheese had the purpose or effect of causing offence. Based on conflicting conjectures about Mr Lee's knowledge based on equal degrees of probability, his Honour relied on Mr Lee's demeanour to conclude that he did not know that his remarks would cause offence. This was an orthodox approach. 56 In respect of the procedural fairness argument, Mr Seck submitted that Ms Vata-Meyer was not prevented from putting a submission about Ms Leggett's evidence that she had not heard Mr Lee make the comments. Rather, his Honour simply explained that human memory is often unreliable and inconsistencies in evidence do not necessarily demonstrate that a witness is lying. It was open to his Honour to accept Ms Leggett's evidence that she did not hear the comments. Ms Vata-Meyer's evidence was circumstantial and did not directly refute Ms Leggett's evidence. That Ms Leggett was present at the afternoon tea did not establish that she heard the comments.

CONSIDERATION 57 Section 9(1) of the Act contains a number of elements which an applicant must establish in order to prove unlawful discrimination. 58 First, there must be an act involving a distinction, exclusion, restriction or preference. 59 Then, the distinction, exclusion, restriction or preference must be based on race, colour, descent or national or ethnic origin. 60 Next, the act must have the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, in this case, of a right to work or to just and favourable conditions of work. 61 A recurring problem with the primary judge's reasons is that they do not in terms address the elements of s 9(1) of the Act. As a consequence it is not always clear whether or what issue arising under s 9(1) is being addressed in those reasons. 62 The respondents suggested an analysis of the reasons which, if correct, would have supported the judgment even if other errors alleged by Ms Vata-Meyer had occurred. We will address that question first. Then we will deal with the errors about which Ms Vata-Meyer complains.

The respondents' suggested short answer to the appeal 63 The problem referred to in [61] above arises in a stark form in the consideration of the respondents' primary basis for contending that there was no error made by the Federal Circuit Court. The respondents submitted that the reason the primary judge dismissed the application was that he held that Mr Lee's conduct was not action involving a distinction based on race. Mr Seck relied on what his Honour said at [67], [68] and part of [69]. 64 Those paragraphs do not in terms address the question whether Mr Lee's conduct amounted to an act involving a distinction based on race. Rather, those paragraphs seem to address a question whether the remarks were intended to offend Ms Vata-Meyer, or whether, intended or not, the remarks had the effect of offending Ms Vata-Meyer. The paragraphs conclude that Mr Lee did not intend to offend Ms Vata-Meyer by making the "black babies" remark, but nevertheless the remark is likely to offend an Aboriginal person. The reasons also conclude that the Coon cheese remark has no necessary connection with race. 65 In view of the statutory context, it is likely that the primary judge meant these passages to express findings required by s 9(1) that the "black babies" remark was a statement involving a distinction based on race, but that the reference to "coon" may or may not have involved a distinction based on race. 66 On this analysis, the reason for the primary judge rejecting the application was not a result of Ms Vata-Meyer failing to show that the "black babies" remark involved a distinction based on race. The respondents' argument to the contrary should not be accepted.

The failure to determine the "coon" and Michael Jackson allegations 67 Ms Vata-Meyer's case was not limited to the "black babies" comment but included the remark about "coon" and the Michael Jackson reference. 68 The primary judge did not decide whether the Michael Jackson comment was made and whether it involved a distinction based on race, let alone determine the question of purpose or effect. 69 The Macquarie Dictionary defines "coon" as follows: Colloq. -n. 1. US a racoon. 2. (derog.) (racist) a member of a dark-skinned people, as an Indigenous Australian or an African American. -phr. 3. a gone coon, a person for whom failure is inevitable. [originally US; shortened form of (RA)COON] [Emphasis in original.] 70 The primary judge observed at [70] that "the word "coon" can have several meanings only one of which is a racially pejorative one". This statement does not record a finding, but rather postulates alternatives. In order to address Ms Vata-Meyer's case a choice had to be made between the alternatives. There were two different accounts of how the word was used. One (Ms Vata-Meyer's) was that it was gratuitous, the other (Mr Lee's) was that it was responsive to a question asked of him concerning preferences for types of cheese. It is implicit from what his Honour said at [66] in particular, that he accepted Mr Lee's version, but he did not engage with the alternative account. He did not resolve the inconsistencies. We will return to this matter shortly.

Mr Lee's purpose 71 The finding that Mr Lee did not understand that his comments might cause offence does not expressly engage with any requirement of s 9(1) of the Act. There was understandable confusion in the submissions of the parties about whether it was a finding as to his purpose or as to whether his acts involved a distinction based on race. If the latter, it was necessary to consider whether race was one reason for the conduct, even if other reasons were predominant (s 18 of the Act). On balance, however, and in the light of our earlier observations, we consider that the finding as to Mr Lee's understanding should be taken to be a finding that Mr Lee did not have the purpose of impairing Ms Vata-Meyer's rights as required by s 9(1). 72 Ms Baw mounted a strong challenge to the finding that Mr Lee was unsophisticated and so obtuse that he did not intend his actions to impair Ms Vata-Meyer's enjoyment of just and favourable conditions of work. There is force in her argument that, by finding in [68] that it was possible that Mr Lee did not understand that his comments might cause offence, the primary judge applied a standard of proof to Ms Vata-Meyer's case that was higher than the balance of probabilities. His Honour misdirected himself at [64] when, after noting that it was necessary for Ms Vata-Meyer to establish a connection between the impugned acts and her race, he stated: If there are innocent explanations which are consistent with the facts as established then she would be unable to do so. 73 His Honour's statement at [68] that he was willing to give Mr Lee "the benefit of the doubt" on the basis of his presentation in the witness box despite his apparent scepticism concerning his explanation also tends to indicate that he did not ask himself the correct question. 74 Ms Vata-Meyer was not required to prove her case beyond reasonable doubt. The mere availability of one or more innocent explanations does not mean that Mr Lee's purpose was not an unlawful one. The question had to be determined on the balance of probabilities. The conduct of Mr Lee on 28 September 2011 and the surrounding circumstances are described in the reasons of the primary judge at [66]. That description is so truncated as not to reflect a proper engagement with the allegations or the evidence, to denude Mr Lee's words of much of their context, and in material respects does not reflect the events of 28 September 2011 as described by Ms Vata-Meyer in her complaint. At the same time, his Honour did not reject Ms Vata-Meyer's description of events. For instance, Mr Lee's first remark offering Ms Vata-Meyer "black babies" is said to have taken place at the afternoon tea, when in fact, according to the complaint, it took place earlier at the work coral. There is no reference in [66] to the fact that Ms Beban responded "Oh Gus, you can't talk like that" when Mr Lee made the "black babies" remark. There is no specific reference to the confrontation between Ms Vata-Meyer and Mr Lee after the first remark when Ms Vata-Meyer threw down the packet of Chicos in front of Mr Lee and voiced her anger at the racial connotation. Neither is there a reference to Ms Vata-Meyer's observation that Mr Lee's response was cocky, but said in a quiet voice so no one else could hear. There is no reference to Ms Vata-Meyer's evidence that her disapproval was obvious by this time. Ms Vata-Meyer also said that sometime later Mr Lee brought the packet of lollies to the afternoon tea and that she picked them up, put them in his shirt pocket and indicated loudly to all around that she was highly offended. Then there was the reference by Mr Lee to Michael Jackson. And after Ms Vata-Meyer said in her complaint that Ms Cloudy asked about the difference between camembert and brie. Ms Moran was explaining the difference when Mr Lee all of a sudden called out "I like coon". 75 The source of the primary judge's finding about Mr Lee's purpose seems to be an exchange with the bench during cross-examination. The transcript of the cross-examination was part of the appeal papers before this Court. It occupied approximately nine pages. At most, four pages dealt with the events of 28 September 2011 directly. In cross-examination Mr Lee said he did not recall the details of some of the events of the afternoon. But he agreed that Ms Vata-Meyer was very angry after the first "black babies" remark. Whether he realised Ms Vata-Meyer was offended was first referred to in an exchange with his Honour as follows: HIS HONOUR: Mr Lee, I understand Ms Vata-Meyer's point to be once you made the initial reference to black babies, and you saw that Ms Vata-Meyer was angry, and I think you say she was angry---?---That's correct ---did you not make a connection between the reference to black babies and her anger and the fact that she's an Aboriginal person?---I didn't make any reference at the time, your Honour. You didn't make the connection?---I didn't make the connection at all. 76 Then, at the end of the cross-examination there was a further exchange as follows: HIS HONOUR: I have one or two questions I want to ask, Mr Lee?---Yes, your Honour. I understand from your evidence that at the time you made the reference to black babies, you didn't think you were doing anything wrong; is that correct?---That's correct, your Honour. And does that remain your view?---Not now, your Honour. I realise that it was a mistake, and as I apologised to Ms Vata-Meyer the day after, I realised it was a mistake. 77 The respondents emphasised the forensic advantage enjoyed by the primary judge "of observing the witnesses in cross-examination including their demeanour, tone and phrasing of their oral evidence". But too much can be made of this. 78 In Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [28]-[30] Gleeson CJ, Gummow and Kirby JJ explained the role of an appeal court in examining the fact finding process of a trial judge as follows: 28 …[T]he mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings. 29. That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being "incontrovertible", an appellate conclusion may be reached that the decision at trial is "glaringly improbable" or "contrary to compelling inferences" in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must "not shrink from giving effect to" its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process. See also: McHugh J at [66] and Callinan J at [148]. [Footnotes omitted.] 79 Earlier, in State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) 160 ALR 588; [1999] HCA 3 Kirby J referred to scientific literature showing how unreliable a finding based on credit alone can be. At [93] his Honour said that: In some cases the evidence of the witness, where credibility is in question, although relevant to the outcome of a trial, relates only to particular aspects of the parties' dispute and leaves untouched other evidence which requires separate evaluation with no obstacle of a credibility finding. In such cases, to avoid appellate reversal, the trial judge must demonstrate that such evaluation has occurred … Where there is other evidence, unchallenged, unanswered, ostensibly reliable and supported by uncontested contemporaneous records, an adverse credibility finding in respect of one witness or more does not remove from consideration all the other evidence. Nor can it relieve the trial judge, or the appellate court when required, of the duties of analysis and the provision of reasons to demonstrate and explain that such analysis has occurred. 80 While this is not a case involving uncontested contemporaneous records, in all other respects the present case meets this description. 81 The finding that Mr Lee did not have a purpose of impairing Ms Vata-Meyer's rights was a finding as to Mr Lee's credibility based on the primary judge's impression of him apparently derived from two brief exchanges with him in cross-examination. But there was other evidence, which tended to undermine Mr Lee's credibility, unchallenged, unanswered and ostensibly reliable. Some of this evidence was not mentioned in the reasons. 82 In order to determine the question of purpose his Honour was entitled to have regard to Mr Lee's demeanour as a witness but he was required to evaluate the answers he gave in the two exchanges during cross-examination against the unchallenged, unanswered and ostensibly reliable evidence of other witnesses. That evidence included: Ms Vata-Meyer's angry response to the first "black babies" remark; the fact that Mr Lee knew at the time that she was angry; Ms Vata-Meyer's evidence, which was not contested and which his Honour accepted, that the conduct was repeated during the afternoon, that Mr Lee responded in a cocky way, and that Ms Vata-Meyer made her reaction plainly known at the time; the early reprimand from Ms Beban, an ostensibly independent witness, who generally corroborated Ms Vata-Meyer's account; the subsequent reference to "coon" and the circumstances in which Ms Vata-Meyer alleged it was made; the fact that Mr Lee understood coon "could be used as a racial slur"; the fact that at the time he was giving his evidence Mr Lee was a 45 year old Work Health Safety Advisor in the Department of Prime Minister and Cabinet; the fact that at the time of the events in question, he had been employed for three years in the same role in the People, Policy and Performance Branch; the fact that in 2011 the Department had a policy on diversity and cultural sensitivity, a copy of which was annexed to Ms Leggett's affidavit; and that within the past two years Mr Lee had undertaken cultural awareness training, a circumstance his Honour appears to have overlooked entirely. 83 The importance of the last consideration should not be underestimated. The evidence before his Honour was that this training explored: a. Indigenous history, cultures and peoples; b. Non-Indigenous and Indigenous attitudes towards each other and how they were formed; and c. Cross-cultural behaviours and actions. 84 Ms Vata-Meyer has dark skin. It was common ground that Mr Lee knew that she was employed under the indigenous graduate program. While the contents of the course were not before the Court, it is difficult to believe that in 2011 a person who had completed training of this nature would be oblivious to the hurt that might be caused to an indigenous person by inviting her or other employees within her hearing to eat "black babies" and would not know that it would impair her enjoyment on an equal footing of her right to just and favourable conditions of work. Even if the first invitation was merely thoughtless, how, in the face of the evidence of Ms Vata-Meyer's reaction and Ms Beban's reprimand can the second invitation be explained? Was the later reference to "coon" entirely coincidental? Did the context tend to support Ms Vata-Meyer's version of events? 85 If the proper conclusion to be drawn from all the evidence is that Mr Lee was aware that his remarks could be hurtful to an indigenous employee, then his Honour's initial scepticism about Mr Lee's explanation was entirely justified and the inference that he had an unlawful purpose might well have been drawn. Mr Lee might indeed have been obtuse, not in the sense of stupid, as his Honour ultimately concluded, but obtuse in its alternative sense of insensitive. Before his Honour reached his conclusion he should have brought all the evidence into account including the evidence of Mr Lee's training and experience, weighed it up and decided whether Ms Vata-Meyer's account was more probable than not. 86 At this point it is well to recall what the plurality went on to say in Fox v Percy at [30]-[31]: 30 It is true, as McHugh J has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in an appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana"): ... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour. 31. Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical. [Footnotes omitted.] 87 As we have already observed, the effect of his Honour's observation at [66] that Mr Lee responded to a question from someone at the afternoon tea with "I just like plain old Coon cheese" is that his Honour rejected Ms Vata-Meyer's evidence to the effect that Mr Lee's intervention was gratuitous, that is to say, that he interjected during an answer given by Ms Moran to a question asked by Ms Cloudy and that his contribution was non-responsive. It will be recalled that Ms Vata-Meyer's evidence was that the question Ms Cloudy asked was concerned with the difference between camembert and brie. It was not an inquiry about preferences. Furthermore, it might be significant that on her version Mr Lee's contribution was that he liked "coon", not "Coon cheese". This evidence might be important to the determination of Mr Lee's purpose. Either on its own, or in combination with the other evidence, it might have negated the impression his Honour formed during the cross-examination. If the proper construction of his Honour's reasons is that he rejected Ms Vata-Meyer's evidence, he ought to have explained why. How did he resolve the inconsistencies between the two accounts? He made no finding against Ms Vata-Meyer's credit. For, the reasons given above, it was insufficient to rely only on his impression of Mr Lee derived during cross-examination, at least without carefully evaluating it against the other evidence. 88 It therefore follows, that, despite Mr Seck's best efforts to persuade us otherwise, we are not satisfied that the primary judge did "weigh up the strength of the cumulative evidence to determine whether on the balance of probabilities" Mr Lee was actuated by an unlawful purpose. In our view, the primary judge erred by applying the wrong standard of proof, by giving too much weight to his impression of Mr Lee in the witness box and by failing to assess Mr Lee's demeanour in the light of all the evidence.

Failure to address the events of 28 September 2011 separately from the investigation of the complaint 89 The final step in the primary judge's reasoning concerned the question whether the effect of the "black babies" comments impaired Ms Vata-Meyer's right to the enjoyment of just and favourable conditions of work. 90 At [70] his Honour set out the approach he proposed to take to the determination of that question as follows: [P]rovided that the investigation and resolution of Ms Vata-Meyer's complaint was adequate to the circumstances, the action of Mr Lee would not have impaired Ms Vata-Meyer's enjoyment of her right to work. 91 Proceeding on that assumption, his Honour examined the process of investigation of the complaint. 92 The primary judge relied for that approach on what French and Jacobson JJ said in Gama at [76]-[80]. However, that passage emphasised that whether a person's employment right was impaired by racially-based remarks depended on the facts and the nature and circumstances of the remarks. The passage did not warrant making an assumption about the facts and then examining the facts to validate the assumption. There is no necessary reason why the steps taken to investigate and determine the complaint would deprive the offending conduct of its discriminatory effect. 93 By approaching the matter in this way the primary judge did not consider whether the conduct of Mr Lee on its own -- and apart from the steps taken afterwards -- infringed the prohibition in s 9(1) of the Act. The judgment in Gama contemplated that, depending on the facts, racially-based remarks may affect a person's sense of self-worth and thereby appreciably disadvantage them in their conditions of work. The primary judge accepted that an invitation to eat "black babies" was likely to offend an Aboriginal person and that (at [69]) an unintentional racially offensive remark may impair a person's enjoyment of her right to work and to just and favourable conditions of work. But, beyond accepting (at [66]) that it was "plain" that she had been offended by the first "black babies" remark, his Honour did not consider the effect Mr Lee's conduct had on Ms Vata-Meyer's enjoyment of her right to work and to just and favourable conditions of work. Rather, the primary judge proceeded to analyse the steps taken in the investigation and resolution of Ms Vata-Meyer's complaint and found that the process was reasonable, adequate and appropriate. Then he concluded at [77]: That action should have ensured that Ms Vata-Meyer was not injured in the enjoyment of her work and in enjoying fair conditions of work as a consequence of the action of Mr Lee". [Emphasis added.] 94 That may or may not be so. But the issue raised by Ms Vata-Meyer was whether she was impaired in the enjoyment of her right to just and favourable conditions of work as a consequence of Mr Lee's conduct. The finding that the Department's response should have ensured that she was not injured did not resolve the question of whether she was. The primary judge did not adjudicate upon the controversy before him and fell into further error.

Failure to properly assess the events following 28 September 2011 95 Even if, contrary to our opinion, it was not an error to take into account the events after 28 September 2011 to determine whether there had been unlawful discrimination on that day, the approach adopted by the primary judge did not address the right question. 96 The finding that the investigation of the complaint was reasonable, adequate and appropriate does not expose the criteria on which the assessment was made. The particular deficiency is revealed at [77] where his Honour said that the action "should have ensured" that Ms Vata-Meyer was not impaired in the enjoyment of her rights. There was no attempt to deal with Ms Vata-Meyer's evidence that Mr Lee's conduct caused her distress and hurt and the subsequent actions of the Department did not relieve either. That evidence included a letter from Ms Vata-Meyer to Ms Paul written on 4 October 2011 which concluded: We affirm our views of racial discrimination in the workplace. We acknowledge that it is difficult on levels to address problem situations but it is however necessary because it build (sic) on advances that may have already been made by previous Indigenous employees within DEEWR. What is documented in detail above of the series of observable behaviours and patterns in the workplace, provide only a glimpse of the endemic nature, full of complexities associated with discrimination in all different forms. To put it simply, the ongoing issues of discrimination and inequity in access to and delivery of some of the services makes it enormously difficult to make meaningful inroads particularly in relation to the recruitment and retention of Indigenous staff within DEEWR. This may even reflect a much wider and serious failure in the Australian Public Service overall. 97 And in her oral submission Ms Vata-Meyer explained: MS VATA-MEYER: And who is in a much better position to know what they have been subjected to in terms of racial discrimination? I am talking about my experience, you know, as a black woman. A white person will never get it, you know. Unless you are so close to the heart of the issue; unless you've been dumped out in some remote Aboriginal community and you've spent the last, I don't know one year; or unless you're like your Honour yourself, where you've had to hear these cases on a daily basis, you get to see how they perform under cross-examination … you get a pretty good judgment of character and you think you know, "'I've just about heard enough." You know, I'm at that point too. I've heard just about every excuse under the sun, as a black - I'm not a 20 year old with no life experience. I'm a mature-age woman who has pretty much seen and done most of it. I'm not saying that I'm naïve to public service, being a new graduate, you know, because I've had previous experience in the public service. Not as lengthy as some, I admit, but that does not dismiss the fact or does not dismiss that I would at least have a very good understanding in terms of the subtleties and nuances and - that could easily be played out and someone could easily say, well, you know, it could be interpreted this way. No. Not in this instance. I know what racial discrimination is. I have been there. I have felt it. I grew up with it. We know it. It's - you take, say, for example - go to another … area of life, let's say, a sportsperson. You know, a cricket player sits there - stands there at the wicket. The minute he hits that ball, he pretty much has a good feel and sense: gee, that felt good, it was so sweet coming off the bat. And because of his --- HIS HONOUR: On the other hand, if the ball passes the bat and hits stumps and the bails fly off, it's a completely different feeling. MS VATA-MEYER: But the point is he's experienced enough. He knows the setting, he has been there before, he has felt the pressure. He does it all the time. You get someone like me: I've been exposed to it, I grew up in it, I know of it. I've been at the end of it. I've seen all kinds of excuses. I've seen it in public life. I've seen it, you know, out there in education. I've seen it in the, you know, schoolyard. I've seen it. So for me to not know - I can smell it a mile away. That's the point I was trying to make with the cricketer at a wicket - at - in front of the --- HIS HONOUR: Okay. MS VATA-MEYER: You can feel it. You can sense it a mile away whether it's going to be a good one or a bad one. I'm saying that when it's racially discriminatory behaviour, you can smell it a mile away how it's intended … 98 Ms Vata-Meyer demonstrated that she was affronted by, and had a strong sense of injustice arising from, Mr Lee's conduct on 28 September 2011. Racial discrimination is prone to produce such a response. The primary judge focused on answering the question whether the actions of the Department were reasonable, whereas the relevant question was whether the actions of Mr Lee had the effect of impairing Ms Vata-Meyer's enjoyment of her right to just and favourable conditions of work. That required the primary judge to take into account Ms Vata-Meyer's sense of injustice and to determine whether that stemmed from the events of 28 September 2011 or not. This, his Honour failed to do. 99 Further, the assessment of the impairment of Ms Vata-Meyer's rights was based on the finding that Mr Lee did not understand that his comments might cause offence. As explained earlier in these reasons, that finding was attended by error. The result is that the analysis of impairment was conducted in that respect on a false basis.

DISPOSITION 100 The errors made by the primary judge identified in these reasons caused the trial to miscarry. Consequently, the orders made by the Federal Circuit Court must be set aside. 101 This is an appeal by way of rehearing. On a rehearing, once an appellate court concludes that an error has been shown, it is generally obliged to correct it. In the present case, however, regrettable though it is, we are not in a position to do so. That is not only because we did not hear or see the witnesses but also because we were not provided with all the evidence, including the complete transcript. Thus, the proceeding must be remitted to the Federal Circuit Court for a retrial. The retrial should be limited to the matters agitated on appeal, namely, whether by his conduct on 28 September 2011, Mr Lee contravened s 9(1) of the Act and whether the Commonwealth is liable for any contravention found to have been caused by Mr Lee. If Ms Vata-Meyer succeeds on the re-trial, the Circuit Court will also need to consider the question of relief. 102 We would, however, urge the parties to reduce the burden and expense of a new trial and avoid the uncertainties surrounding its outcome by participating in a mediation. If there is to be a new trial and Ms Baw is unable or unwilling to appear for Ms Vata-Meyer at that trial, we would urge Ms Vata-Meyer to contact Justice Connect to arrange for legal assistance.

COSTS 103 On the basis that costs would ordinarily follow the event, there will be an order that the first and second respondents pay the appellant's costs of the appeal. 104 Ms Vata-Meyer also sought an order that the parties bear their own costs of the hearing below. In our view the preferable order is that a decision about the costs of that hearing abide the outcome of the retrial. 105 As there was no argument on the question of costs in the hearing of the appeal, the parties have leave to apply in writing within seven days to vary the orders for costs. 106 Before we conclude, we wish to record our gratitude to both counsel for their assistance but to Ms Baw, in particular, who appeared pro bono for Ms Vata-Meyer. I certify that the preceding one hundred and six (106) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices North, Collier and Katzmann.