Werndly v Commonwealth of Australia

Applicable principles

1. Section 31A(2) of the Federal Court of Australia Act 1976 (Cth) and r 26.01(1)(a) of the Federal Court Rules 2011 (Cth) provide that the Court may give judgment for one party against another in relation to the whole or any part of a proceeding if satisfied that the other party has no reasonable prospects of prosecuting the proceeding or that part of the proceeding. The applicable principles were considered by the High Court in Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 and have been explained in many judgments of this Court. These principles apply equally to r 26.01(1) of the Rules.
2. Relevantly, the principles may be summarised as follows.
3. Section 31A of the Federal Court Act authorises summary disposition of proceedings 'on a variety of bases under its general rubric', including, but not limited to: where the pleading discloses no reasonable cause of action (or defence) and the deficiency in that regard is 'incurable'; where 'there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment'; and the 'longstanding category of cases which are "frivolous or vexatious or an abuse of process".': Spencer at [22] (French CJ and Gummow J).
4. A party may have no reasonable prospects of successfully prosecuting the proceeding even if it cannot be concluded that the proceeding is hopeless or bound to fail: Spencer at [17] (French CJ and Gummow J). The enquiry required under s 31A is 'not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail': Spencer at [52] (Hayne, Crennan, Kiefel and Bell JJ).
5. The 'exercise of powers to summarily terminate proceedings must always be attended with caution', whatever may be the basis upon which that disposition is sought: Spencer at [24] (French CJ and Gummow J). It is not a power 'to be exercised lightly': Spencer at [60] (Hayne, Crennan, Kiefel and Bell JJ). There must be a 'high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way': Batistatos v Roads Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 25 at [46], referred to in Spencer at [24] (French CJ and Gummow J).
6. As to the meaning of 'reasonable prospects of success' in Spencer Hayne, Crennan, Kiefel and Bell JJ said (at [60]): … full weight must be given to the expression ['no reasonable prospects'] as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is "no reasonable prospect" of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to "no reasonable prospect" can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase "just and equitable" when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.

Legislative framework

1. Part IIB of the AHRC Act contains provisions relating to the redress of unlawful discrimination. The process contemplates a complaint to and conciliation by the Commission: s 46P. The President must terminate a complaint upon being satisfied of, amongst other things, that there is no reasonable prospect of the matter being settled by conciliation: s 46PH(1B)(b). Where a complaint has been terminated an affected person may make an application to this Court alleging unlawful discrimination by one or more of the respondents to the terminated complaint: s 46PO(1).
2. Section 46PO(4) of the AHRC Act provides (notes omitted): Court orders (4) If the court concerned is satisfied that there has been unlawful discrimination by any respondent, the court may make such orders (including a declaration of right) as it thinks fit, including any of the following orders or any order to a similar effect: (a) an order declaring that the respondent has committed unlawful discrimination and directing the respondent not to repeat or continue such unlawful discrimination; (b) an order requiring a respondent to perform any reasonable act or course of conduct to redress any loss or damage suffered by an applicant; (c) an order requiring a respondent to employ or re-employ an applicant; (d) an order requiring a respondent to pay to an applicant damages by way of compensation for any loss or damage suffered because of the conduct of the respondent; (e) an order requiring a respondent to vary the termination of a contract or agreement to redress any loss or damage suffered by an applicant; (f) an order declaring that it would be inappropriate for any further action to be taken in the matter.
3. Unlawful discrimination means any acts, omissions or practices that are unlawful under, amongst other provisions, Pt 2 of the DD Act. Part 2 of the DD Act contains provisions relating to the prohibition of disability discrimination. Section 15(2), in Pt 2, provides that it is unlawful for an employer or a person acting or purporting to act on behalf of an employer to discriminate against an employee on the ground of the employee's disability:
4. in the terms or conditions of employment that the employer affords the employee; or
5. by denying the employee access, or limiting the employee's access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment; or
6. by dismissing the employee; or
7. by subjecting the employee to any other detriment.
8. Section 122 of the DD Act provides for personal liability of a person who causes, instructs, induces, aids or permits another person to do an act that is unlawful under, amongst others, Pt 2 of that Act. Further, s 123 of the DD Act makes provision to attribute conduct or a state of mind of a director, employee or agent of a body corporate to that body corporate.
9. Section 5 of the DD Act provides: 5 Direct disability discrimination (1) For the purposes of this Act, a person (the discriminator) discriminates against another person (the aggrieved person) on the ground of a disability of the aggrieved person if, because of the disability, the discriminator treats, or proposes to treat, the aggrieved person less favourably than the discriminator would treat a person without the disability in circumstances that are not materially different. (2) For the purposes of this Act, a person (the discriminator) also discriminates against another person (the aggrieved person) on the ground of a disability of the aggrieved person if: (a) the discriminator does not make, or proposes not to make, reasonable adjustments for the person; and (b) the failure to make the reasonable adjustments has, or would have, the effect that the aggrieved person is, because of the disability, treated less favourably than a person without the disability would be treated in circumstances that are not materially different. (3) For the purposes of this section, circumstances are not materially different because of the fact that, because of the disability, the aggrieved person requires adjustments.
10. Section 6(2) of the DD Act provides: 6 Indirect disability discrimination … (2) For the purposes of this Act, a person (the discriminator) also discriminates against another person (the aggrieved person) on the ground of a disability of the aggrieved person if: (a) the discriminator requires, or proposes to require, the aggrieved person to comply with a requirement or condition; and (b) because of the disability, the aggrieved person would comply, or would be able to comply, with the requirement or condition only if the discriminator made reasonable adjustments for the person, but the discriminator does not do so or proposes not to do so; and (c) the failure to make reasonable adjustments has, or is likely to have, the effect of disadvantaging persons with the disability.
11. Section 4 of the DD Act defined disability as follows: disability, in relation to a person, means: (a) total or partial loss of the person's bodily or mental functions; or (b) total or partial loss of a part of the body; or (c) the presence in the body of organisms causing disease or illness; or (d) the presence in the body of organisms capable of causing disease or illness; or (e) the malfunction, malformation or disfigurement of a part of the person's body; or (f) a disorder or malfunction that results in the person learning differently from a person without the disorder or malfunction; or (g) a disorder, illness or disease that affects a person's thought processes, perception of reality, emotions or judgment or that results in disturbed behaviour; and includes a disability that: (h) presently exists; or (i) previously existed but no longer exists; or (j) may exist in the future (including because of a genetic predisposition to that disability); or (k) is imputed to a person. To avoid doubt, a disability that is otherwise covered by this definition includes behaviour that is a symptom or manifestation of the disability.

Summary of Mr Werndly's case

1. Mr Werndly was employed by the Department of Defence from around 1989 to August 2023. His last position was as a specialist flight instructor at No. 2 Flight Training School at Pearce Air Base in Western Australia. Between around January 2016 to 15 December 2017 WGCDR Strong was in command of 2FTS.
2. Mr Werndly alleges that from around October 2017 the respondents imputed a disability to Mr Werndly within the meaning of paras (a) and (k) of the definition of disability in s 4 of the DD Act to the effect that he had a partial loss of mental functions and (or) a disorder, illness or disease that affected his thought processes, perception of reality, emotions or judgement or that resulted in disturbed behaviour.
3. The particulars given in support of that allegation are:
4. a record of conversation (ROC) dated 5 October 2017 between Mr Werndly and WGCDR Strong;
5. a referral for a mental health / psychological assessment and management advice prepared relating to Mr Werndly on or around 27 October 2017 (PM 008);
6. a report of Squadron Leader Nelson Rapp made on or around 7 December 2017;
7. a medical employment classification (MEC) relating to Mr Werndly dated 22 November 2017;
8. a MEC Advice dated 22 February 2018;
9. a communication from the Department of Defence to Aviation Medicine (AVMED) to the effect that Mr Werndly's monthly psychiatric appointments could cease if he 'no longer requires psychotherapy' but that there was a possibility that he 'could relapse'; and
10. a communication from the Department of Defence to the Civil Aviation Safety Authority to the effect that Mr Werndly had an 'adjustment disorder'.
11. Mr Werndly alleges that, as a consequence of the imputed disability, the Department of Defence required him to attend a psychological assessment with Dr Megan Gilbert, a consultant psychiatrist. In November 2017 and February 2018 MEC decisions were made downgrading Mr Werndly's medical employment classification such that he could not handle live ammunition or weapons and that he required rehabilitation, about which Mr Werndly was not informed.
12. Mr Werndly alleges that he did not have an adjustment disorder or any other disability and was not behaving in a manner that would justify the PM 008 referral prepared in October 2017, his attendance on Dr Gilbert for a psychological assessment, or downgrading of his MEC. In short, Mr Werndly alleges that he was not behaving in a manner from which any person could have reasonably suspected that he had a disability of the kind imputed to him. Accordingly, Mr Werndly alleges that he was treated less favourably than an equivalent person not exhibiting any of those behavioural characteristics and that the unfavourable treatment was because of the imputed disability.
13. Mr Werndly alleges that he was subjected to a delayed administrative and disciplinary process due to, amongst other things, being required to attend appointments with Dr Gilbert, a downgrade of his MEC and statements to the effect that he was required to undergo a psychological assessment in order to return to the workplace as a consequence of the imputed disability. In substance, Mr Werndly alleges that this amounted to unlawful discrimination within the meaning of ss 15(2)(a), 15(2)(b) and 15(2)(d) of the DD Act.

Nature and extent of disability imputed

1. The respondents contend that there is no reasonable prospect of Mr Werndly succeeding because the documents upon which he relies to infer or impute a disability do no more than indicate that WGCDR Strong had a belief or suspicion that Mr Werndly might have a disability. The respondents contend that a belief or suspicion that a person might have a disability is distinct from imputing (or ascribing) a disability to someone. Therefore, so the respondents submit, Mr Werndly has no reasonable prospect of proving that WGCDR Strong imputed a disability to him. The respondents rely on Varas v Fairfield City Council [2008] FMCA 996 at [98]-[99] (Lucev FM); and the appeal dismissed in Varas v Fairfield City Council [2009] FCA 689.
2. The respondents also contend that it is necessary for Mr Werndly to identify the nature and extent of the alleged disability alleged to be the reason for his receiving of less favourable treatment with precision. The respondents rely on Qantas Airways Limited v Gama [2008] FCAFC 69; 167 FCR 537 at [66], [90]-[91] (French and Jacobson JJ); Railpro Services Pty Ltd v Flavel [2015] FCA 504; 242 FCR 424 at [126] (Perry J); Purvis v State of New South Wales (Dept of Education and Training) [2003] HCA 62; 217 CLR 92 at [11]; Stevenson v Murdoch Community Services Inc [2010] FCA 648; 202 IR 266 at [87] (Gordon J); Reay v Fuel & Gas Haulage Pty Ltd [2019] FCCA 2473 at [36], [39] (Lucev J); Ponraj v Wycombe Services Pty Ltd [2023] FCA 118 at [83] (McElwaine J). The respondents submit that neither Mr Werndly's amended concise statement nor the statement of material facts identify with any precision the nature and extent of the alleged disability. The respondents submit it is insufficient to allege a disability in broad terms.
3. I do not accept the respondents' submissions based on Varas. The Federal Magistrate's findings turned on the facts of that case and there is no legal principle of general application that renders Mr Werndly's case without reasonable prospects of success. In Varas the Federal Magistrate found that Ms Varas had been referred to a psychologist by her employer for the purpose of gaining additional insight into her condition and that referral was because of concerns about her behaviour not because of a disability imputed to her at that time. After receiving the report, her employer imputed the disability of histrionic personality disorder to Ms Varas. However, the Federal Magistrate found that the evidence before him did not support that diagnosis; that is, she did not, in fact, have that disability. The employer subsequently referred Ms Varas for psychiatric assessment by a medical practitioner (Dr Korner) because it imputed the disability to her. After citing Blackadder v Ramsey Butchering Service Pty Ltd [2002] FCA 603 at [68]-[69] (Madgwick J) and Thompson IGT (Australia) Pty Limited [2008] FCA 994 at [38], [48]-[52] (Goldberg J) the Federal Magistrate concluded that 'although the [employer's] directions for Ms Varas to attend on Dr Korner were because the [employer] had imputed to her an histrionic personality disorder (and hypochondriasis) the requests were reasonable in the circumstances and did not constitute a detriment for the purposes of the [DD Act]': Varas FMCA at [95]-[105]. Thus, the question of whether or not the employer imputed a disability to Ms Varas and, if so, when, was purely a question of fact.
4. Imputation of a state of mind to a person, in the absence of an express statement, necessarily involves a process of inference from other facts such as what was said and done by the person. The line between a belief that a person might have a disability and a belief that a person has a disability is difficult to draw. A person without medical training may believe a person to have a disability and seek to have that belief confirmed by referring the person to a medically trained person for assessment. In the meantime, the person may continue to hold a belief that that person has a disability and treat the person less favourably than a person without the imputed disability because of the person's imputed disability. The mere fact of a referral to a medical practitioner does not, without more, preclude an otherwise available inference that the person referring has imputed a disability to the person referred.
5. I do not accept the respondents' submission that Mr Werndly has no reasonable prospect of success of proving that the respondents imputed a disability to him on the basis of the documents upon which Mr Werndly relies. While I accept that the documents are somewhat equivocal, not all the documents relied upon were produced in evidence. For instance, the communication from the Department of Defence to AVMED of 18 September 2018 was not tendered. Nor was the medical information provided by the Department of Defence to CASA in evidence.
6. Such documents as are in evidence indicate that WGCDR Richards had formed the view, as of 22 November 2017, that Mr Werndly was unfit for weapons handling; was to have no access to live ammunition; was not to work in stressful environments; required periodic medical officer review; required rehabilitation under a medical officer's direction with specific instructions to be detailed on a form PM101. In November 2017, Squadron Leader Rapp made a recommendation that Mr Werndly be referred to psychological assessment for suitability as a qualified flying instructor with employment at 2FTS and Air Force in general, prior to recommencing flying in any form. Amongst the documents provided to Squadron Leader Rapp were the ROC of 5 October 2017. A MEC Advice of 1 February 2018, evidently prepared by WGCDR Richards, indicated Mr Werndly was not to work in stressful environments; not to have access to live ammunition; required periodic specialist care; required periodic medical officer review; required rehabilitation under an officer's direction; and had specific restrictions detailed in a form PM101. Mr Werndly's MEC Advice of 22 February 2018, prepared by WGCDR Richards, indicated that he may perform unrestricted flying duties in aircraft while taking Australian Defence Force authorised medication; had restricted flying duties in aircraft types in PC9, but that flying in other high-performance / fast jet aircrafts was not permitted; and that he required monthly periodic medical officer review. It is reasonably arguable that these are steps that would be taken by a person who had imputed to Mr Werndly a loss of mental functions or disorder, illness or disease that affected his thought processes, perception of reality, emotions or judgement or that resulted in disturbed behaviour to such an extent that he may not be capable of performing his duties as a flying instructor or being subjected to administrative or disciplinary action.
7. Having regard to Mr Werndly's inferential case, I am not satisfied on the incomplete record before the Court on an interlocutory application and in the absence of other evidence that places the various documents into a factual context, that Mr Werndly has no reasonable prospect of proving that WGCDR Strong or other members of the Department of Defence had imputed to him a mental disability. It is open to Mr Werndly to adduce evidence at trial capable of proving a disability of the kind falling within subparagraph (a) and (or) (g) of the definition of disability in s 4(1) of the DD Act was imputed to him.
8. I also do not accept that Mr Werndly has not identified the nature and extent of the alleged imputed disability with sufficient precision for the respondents to know the case they must meet at trial. Section 4(1) of the DD Act does not require the person who imputes a disability to have in mind a notional diagnosis for the imputed disability. In substance, Mr Werndly alleges that the respondents imputed to him a disability in the nature of a loss of mental functions or disorder, illness or disease that affected his thought processes, perception of reality, emotions or judgement or that resulted in disturbed behaviour to such an extent that he was not or may not have been capable of performing his duties as a flying instructor or being subjected to administrative or disciplinary action.

Comparator for less favourable treatment

1. The respondents submit that Mr Werndly must establish that unfavourable treatment was done because of the relevant disability: Purvis at [13]-[14] (Gleeson CJ) and [236] (Gummow, Hayne and Heydon JJ). Further, the relevant question is why the action was undertaken or what was the true or real reason: Munday v Commonwealth of Australia (No 2) [2014] FCA 1123; 226 FCR 199 at [59] (Katzmann J); Forbes v Australian Federal Police (Commonwealth of Australia) [2004] FCAFC 95 at [69]-[70] (Black CJ, Tamberlin and Sackville JJ).
2. The respondents submit that s 5(1) of the DD Act provides that, in order for conduct to be discriminatory, a person must be treated, or proposed to be treated, less favourably than someone else without the disability in materially the same circumstances. The circumstances being all of the objective features which surround the actual, or intended treatment, of the applicant. That requires the applicant to identify a hypothetical comparator and then an analysis of what would have been done in the circumstances if the person did not have the same disability as the applicant: Purvis at [223]-[225] (Gummow, Hayne and Heydon JJ).
3. The respondents contend, in substance, the relevant comparator for the purpose of determining if the respondents treated Mr Werndly less favourably than a person to whom they had not imputed a disability is not a person exhibiting no behaviour that justified the PM 008 referral, referral to Dr Gilbert or downgrading of that person's medical employment classification, but a person in the same circumstances and exhibiting the same behaviour as Mr Werndly. The respondents submit, in substance, that Mr Werndly's alleged comparator is artificial and unrealistic because Mr Werndly was on stress leave as of 5 October 2017 and that is part of the circumstances and behaviour that must be taken into account.
4. As the ROC of 5 October 2017 records, Mr Werndly described himself as stressed and that he had not slept; had headaches all day; had gone to a medical officer earlier that day; had been removed from the flying program; and had been given stress leave. He had been provided with a PM101 that said he was to be restricted to two hours of work per day for the next eight days until he was assessed further.
5. The report of Dr Gilbert of 8 November 2017 is addressed to Dr Ben Addison at Pearce Health Centre, RAAF Base Pearce and records that Mr Werndly was referred to her by Dr Addison. Dr Gilbert opines that it was her belief 'that [Mr Werndly] has developed a problem which is like an adjustment disorder in relation to the toxic working environment that he has been working in where he has been essentially bullied by his CO. I firmly believe that if he continues in this working environment this would have the potential to progress to a real psychiatric disorder and so I would strongly recommend at this point he [does] not return to work for the remaining 7 weeks of his CO's posting. I will review him in a month's time to make sure there has been no progression in his symptoms and am more than happy to see him on a regular basis if he needs someone to talk to about the various issues.'
6. Therefore, the respondents submit, the relevant comparator is a person who was on stress leave and who had been referred to Dr Gilbert by Dr Ben Addison. The respondents submit, in substance, that Mr Werndly has no reasonable prospect of succeeding on a case that draws a comparison between Mr Werndly and a person with no behavioural characteristics that would warrant his referral and the other steps taken because the relevant comparator is a person on stress leave that had been referred by his treating general practitioner to a psychiatrist.
7. I accept that the question of the appropriate comparator - 'a person without the [imputed] disability in circumstances that are not materially different' - must take into account all the relevant circumstances. It requires identification of the actual circumstances attending the treatment given to Mr Werndly and then examining what would have been done in those circumstances if Mr Werndly did not have the imputed disability: Purvis at [222]-[223]. However, that does not mean that Mr Werndly's case has no reasonable prospect of success.
8. Mr Werndly's amended concise statement and statement of material facts set out, in some detail, certain background facts leading up to the ROC of 5 October 2017 and his stress leave. Broadly, these concern allegations that Mr Werndly had raised concerns about safety with WGCDR Strong and he considered that those concerns were being ignored or not dealt with appropriately. WGDCR Strong had made some allegations concerning Mr Werndly's productivity and performance as a flying instructor that culminated in him suspending Mr Werndly's instructor qualification; removing him from flight training; and threatening disciplinary processes against him on 4 October 2017. After 5 October 2017, WGCDR Strong failed to take any steps to implement the threatened disciplinary action. Disciplinary steps were not taken until around 29 January 2018 when WGCDR Taylor, the new CO, issued Mr Werndly a show cause notice dated 30 January 2018. Ultimately, WGCDR Taylor determined that a formal warning was not warranted in the circumstances by a determination made in February 2018. Thereafter, WGCDR Richards issued a new MEC dated 22 February 2018 by which Mr Werndly was returned to flying duties.
9. Taking stress leave due to a 'toxic working environment' may or may not provide an explanation for the treatment Mr Werndly characterises as less favourable; namely, preparation of the PM 008 referral, Dr Addison's referral to Dr Gilbert, downgrading of his medical employment classification and statements about psychological assessment. However, that is not a question that can be resolved on merely on the pleadings and evidence that Mr Werndly was on stress-leave. It is, at least, reasonably arguable that the alleged less favourable treatment was because of the alleged imputed disability and not because Mr Werndly had taken stress leave.

Disposition

1. It follows that the respondents' application for summary dismissal should be dismissed because Mr Werndly's case is, at least, reasonably arguable. I also take into account the late stage in the proceedings at which the application has been made and that essentially all interlocutory steps have been completed. While there are aspects of Mr Werndly's case that suggest he may have difficulty ultimately succeeding, those doubts are not sufficient to warrant summary dismissal at this stage of the proceeding. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill.