Comcare v Martin [2016] HCATrans 186 (26 August 2016)

Last Updated: 28 September 2016

Replacement Transcript

[2016] HCATrans 186

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S142 of 2016

B e t w e e n -

COMCARE

Appellant

and

PETA MARTIN

Respondent

FRENCH CJ
BELL J
GAGELER J
KEANE J
NETTLE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 26 AUGUST 2016, AT 10.00 AM

Copyright in the High Court of Australia

MR T.M. HOWE, QC: If it please your Honours, I appear with my learned friend, MR A.P. BERGER, for the appellant. (instructed by Lehmann Snell Lawyers)

MR L. KING, SC: If it please the Court, I appear with my learned friend, MR L.T. GREY, for the respondent. (instructed by Maurice Blackburn Lawyers)

FRENCH CJ: Yes, Mr Howe.

MR HOWE: The Court should hopefully have the appellant’s oral outline of submissions. It is divided into three parts: firstly, a consideration of the text and purpose of what I call the exclusionary provision which is to be found in the concluding words of section 5A of the Safety, Rehabilitation and Compensation Act 1988, known as the SRC Act; secondly, a consideration of the factual findings and approach to the proper construction of that exclusionary provision by the Tribunal; and, thirdly, a consideration of the errors that we discern in the principal judgment of Justice Murphy in the court below.

Could I ask your Honours to go to section 5A of the Act? Your Honours should have electronic compilation No 67 of the Act. I think that was the version on both parties’ list of authorities. We can inform your Honours that there have been some non-material amendments to the SRC Act since the events giving rise to the respondent’s claim for compensation, but they do not have any bearing on the provisions of relevance to these proceedings. Your Honours will see that “injury” is defined in section 5A on page 26 of the reprint and it is defined in declaratory or exhaustive terms.

FRENCH CJ: There is no dispute that there was an injury for the purposes of the Act in this case.

MR HOWE: None whatsoever and, indeed, your Honours will see that subsection (1)(c) includes within the definition of an injury:

an aggravation of a physical or mental injury –

and then we have the exclusionary provision:

but does not include a disease, injury or aggravation suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee’s employment.

It is those three lines that we refer to as the exclusionary provision. Your Honours will see in subsection (2) that various matters are taken to be included within the rubric of “reasonable administrative action”.

FRENCH CJ: We are not concerned in this case with the question of reasonableness. That is a matter which I think you accept if you succeeded would have to go back to the Tribunal?

MR HOWE: It will have to go back. There are two reasonableness limbs that are contained within the exclusionary provision. The first is that the administrative action itself must be reasonable, and, secondly, its manner of implementation must be reasonable.

FRENCH CJ: Yes.

MR HOWE: Now, it is said against the appellant by the respondent that there was an intermediate decision, as it were, which intruded between the non-promotion, on the one hand, and the suffering of - - -

FRENCH CJ: This is the advice of the - return to work with Mr Mellett?

MR HOWE: Yes, in effect the giving of the news of the promotion and acknowledging or discussing what its known and understood consequences would be.

FRENCH CJ: It is not in dispute, is it, that that was a necessary consequence of the non-promotion decision?

MR HOWE: We do not believe it was in dispute in the Tribunal proceedings. It certainly was not anything that the respondent agitated by way of notice of contention in Comcare’s appeal under section 44 and it was not the subject of any agitation by the respondent in the course of her appeal to the Full Federal Court, but it was something that was the product of - - -

NETTLE J: Final judgment.

MR HOWE: Of Justice Murphy’s approach. He said that he did not consider it essential relevance, but he did attach some significance to it, which is now seized on, in effect, for the first time by the respondent in these proceedings, in effect, praying the intermediate decision in aid as some supervening event which robbed the non-promotion of its causative effect.

With respect, if the matter goes back to the Tribunal because the appellant succeeds in the appeal, then it may be that that so-called intermediate decision might play a role in the assessment of the reasonableness of the administrative action which was taken here. That is because your Honours will see subparagraph (2)(f) defines the relevant administrative action here as not only being the non-promotion per se but anything reasonable done in connection with the employee’s failure to obtain a promotion.

So, in our submission, that necessarily includes discussing the necessary effect or implications of the non-promotion, in this particular case the respondent’s return back to working under the supervision of Mr Mellett. That is the relevant administrative action – the non-promotion and things done in connection with it, which includes the discussion on the telephone conversation which was the immediately provoking event that caused the respondent to decompensate and, in effect, to immediately leave work and not to return since to the present day, as I understand the position.

NETTLE J: But do you accept, as Justice Murphy said in the Full Court, that it did not follow, ex necessitate, from the failure to obtain the promotion that she would go back to the position under Mr Mellett?

MR HOWE: No, we submit that there was absolutely no evidence before the Tribunal and it was not an issue explored with the appellant’s witnesses in the course of the Tribunal proceedings that, quite apart from non-promotion, there was some other administrative action which the respondent had sought to be taken or which was available to be taken. It was raised for the very first time, the respondent accepts, in the respondent’s closing submissions in the Tribunal and then it did not see the light of day again before Justice Griffiths or before the Full Court below.

So, I will take your Honours through the Tribunal’s decision but what that makes abundantly apparent is that the respondent perceived a problem in terms of a very strained – what she saw as a toxic relationship with Mr Mellett. She sought a solution to that problem by applying for various jobs around the place, preferably out of the particular workplace in Renmark, was unsuccessful, saw, as it were, an available promotion here which although it kept her in Renmark it nonetheless was attractive to her because it carried the value of the occupant of that promoted position reporting to someone other than Mr Mellett and, according to the Tribunal, she put her full energy into obtaining that promotion as a means of relieving herself from Mr Mellett’s supervision.

What is necessarily inherent in all of that is, if she did not get the promotion, which was the alternative position, then she would go back to her substantive position. She was acting in the position that was the subject of the promotion for some six or seven months before the outcome of the promotion process, but necessarily inherent in and predicated upon the very course of conduct pursued by the respondent was an understanding that the promotion represented an opportunity to solve the problem and if that solution did not come to pass then the problem would necessarily revive. She would return to work under the supervision of Mr Mellett again.

NETTLE J: So it simply was not open to Justice Murphy to find that there would have to be a further intermediate decision to return her to Mr Mellett?

MR HOWE: There was no evidence whatsoever to that effect, yes.

NETTLE J: Well, I understand there might be no evidence, but you put it as high, I take it, that it simply was not open to their Honours of the majority to find that that would be so?

MR HOWE: We do put that. What we do frankly acknowledge is that it was stated by Justice Murphy not to be a critical factor upon which his allowance of the respondent’s appeal depended, but it was nonetheless one of the factors that he identified. But, with respect, it was unfortunately the product of his Honour’s own independent analysis not tied to or sourced in the evidence adduced by both parties before the Tribunal, nor the manner in which the respondent herself had responded to Comcare’s appeal and conducted her own appeal, and what we have emerging in these proceedings is the proposition that it in fact was argued by the respondent.

Justice Murphy himself thought it was not. In that part of his judgment he said although this - he does not attach particular significance to this because it was not actually argued by the respondent in the Tribunal. In the respondent’s submission she puts that in fact her counsel raised it for the very first time in closing submissions. But it was not, up to that point, at all part of the case.

Of course your Honours know that proceedings in the Tribunal based on statements of facts, issues and contentions where the case of the parties is meant to be ventilated in advance, there was no suggestion whatsoever that this intermediate decision should be regard as some supervening factor which robbed the non-promotion and the news of it of all and any causal contribution. It simply was not part of the way in which the respondent conducted her case.

KEANE J: Well, no one was addressing the reasonableness of any such decision. It was not considered.

MR HOWE: Exactly so.

KEANE J: There was not a basis for considering whether or not it was reasonable, principally because it just was not part of the case.

MR HOWE: Exactly, it was not raised, so there was no light shone upon the reasonableness of that aspect of the matter. What we accept is that if the matter does go back to the Tribunal for assessment of the two limbs of reasonableness, it may be that the respondent can in the rehearing argue that the imparting of the news of the non-promotion and the acknowledgement or suggestion that it had the effect of requiring the respondent to return to her previous position was not reasonable, but for instance that would depend on whether she sought any other form of dispensation, whether she had alerted her employer to a wish to not return, and so on.

FRENCH CJ: Can I just ask you? At page 31 of the appeal book, paragraph 60 in the Tribunal’s decision, it includes amongst the consequences which flowed from Ms Martin’s failure to obtain the promotion that she:

would be required to return to her substantive position and work under the direct supervision of Mr Mellett –

That suggests a finding of fact as to the connection between the refusal of the promotion and her future, as it were, working under Mr Mellett. Was there any other finding of fact that impacts on that or is that it?

BELL J: There is the finding in the final sentence on appeal book 29, paragraph 51, that the respondent’s contention was that:

the worsening of her condition was caused by her realisation that she would be returning to the supervision of Mr Mellett - - -

MR HOWE: Exactly so. Then, in response to your Honour the Chief Justice’s question, there is the last sentence of paragraph 61 on appeal book page 32 – in fact, the last two sentences:

her reaction to the offending decision was primarily attributable to her dread of returning to work under Mr Mellett . . . In her mind the former –

That is, the return to work:

was a direct and foreseeable consequence of the decision.

The word “foreseeable” there probably should be read as foreseen. She not only foresaw that as the consequence, but it was the very thing which motivated and provoked her into seeking promotion in the first place to relieve herself of the need to be supervised by Mr Mellett.

FRENCH CJ: I am just looking at the factual constraints, if you like, within which the review process, the judicial review process was undertaken by reference to the factual finding of the Tribunal and that factual finding seems to be that the requirement to return was a necessary consequence of the refusal of the promotion.

MR HOWE: Exactly so. In connection with Comcare’s appeal under section 44 to a single judge of the Federal Court there was no notice of contention that the factual finding expressed in the first dot point at paragraph 60, to which your Honour the Chief Justice has taken us, was unsupported by any evidence, no notice of contention to that effect at all. Then when the respondent agitated her appeal to the Full Court, there was simply no issue raised that that finding was, in fact, unsupported by any evidence because there was this available intermediate decision that had never been explored or suggested up to that point, other than in muted terms in closing submissions after the evidence had been led.

So, with respect, we submit that it is something of a distraction. It may be something that the respondent can reagitate on the question of reasonableness if the appellant’s appeal succeeds on the causal question and the matter does go back for rehearing according to law. But the point made by Justice Keane is exactly right. There was simply no attention directed to that aspect of the reasonableness of the telephone conversation because it had not, with respect, been put in issue. But it may, in fact, be something available to the respondent in due course.

BELL J: Just coming back to the definition of “injury” and of “disease”, the position is that the claim that was made was for an injury being a disease, meaning “an ailment”, namely the adjustment disorder. Is that right?

MR HOWE: Exactly so, your Honour.

BELL J: Now, the parties were agreed that the adjustment disorder was contributed to, to a significant degree, by the respondent’s employment with the ABC. That agreement was posited, was it, upon a case that saw the promotion decision as the administrative action that had triggered her decompensation?

MR HOWE: Just so. The promotion decision and matters necessarily connected with it, such as conveying news of that decision and addressing the necessary consequences of it, yes. That was the significant contribution which my client accepted meant that the respondent’s injury was within the definition of “disease” in section 5B of the Act, and I should take your Honours to that now.

Your Honours will see, as Justice Bell had noted, that “disease” means an ailment and that is defined in section 4 or an aggravation of an ailment and that seems to have been applicable here because there was an underlying, pre-existing condition that the Tribunal noted and then the concluding words:

that was contributed to, to a significant degree, by the employee’s employment –

Now, we would just ask your Honours to note that both sections 5A and 5B were inserted into the SRC Act at the same time by the same piece of amending legislation which was the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2007. It is Act No. 54 of 2007 which commenced operation in April of that year.

Now, what is significant for present purposes is that the concluding words of section 5B(1) which refer to the need for a disease condition to be significantly contributed to by employment was a substantial elevation in the pre-existing threshold which referred only to a material contribution and your Honours will see in section 5B(3) that:

significant degree means a degree that is substantially more than material.

Now, what we ask your Honours to note for present purposes is that there is no such qualification which attends the causal test posed in the exclusionary provision. It simply refers to:

a disease injury or aggravation, suffered as a result of reasonable administrative action.

It need not be suffered as a result of and to a significant degree, referable to the reasonable administrative action. Now, what that indicates in plain terms, when one contradistinguishes the expression “as a result of” in the exclusionary provision with the test for causation that applies to disease, that the legislature had in mind a very broad, expansive coverage that would operate to carve out from the SRC Act altogether those injuries, in particular, psychological diseases obviously enough that are a result of the taking of legitimate managerial action on the part of an employer, so long as the reasonableness limbs are satisfied.

There are, we accept, some other qualifications or limitations that are built into the exclusionary provisions. Your Honour will see that it must be administrative action, and that has been interpreted by a Full Court of the Federal Court as requiring something in addition to the ordinary operational exigencies of employment.

So if an employer, a supervisor, says, “Use that ladder to climb up and bang that nail in”, that is not the taking of administrative action; that is just a transactional activity that inheres in the nature of employment. So an injury that arises from that would not come within the exclusionary provision. That is one limitation.

Another which was discerned by the Full Federal Court in the case of Reeve is that the administrative action must be taken in respect of the employee’s employment and that was interpreted to require that it be employee specific. So that if a psychological injury results from general restructuring which is agnostic or anonymous or not directed to a particular employee, then again an injury that arises from that will not be within the exclusionary provision.

Those particular limitations emerge from the text and they are not disputed by the appellant here. What the appellant does say is that one cannot superimpose upon the text of the legislation some search for and location of some unstated limitation or qualification referable to the avoidance of harsh or unjust outcomes, as seen by reference to some commonsense evaluative task. I will come to that in a moment, if I could.

We do attach significance to the amplitude of the expression “as a result of” in the exclusionary provision and its obvious contradistinction with a very much more particular and different causal test posed in section 5B(1) and we also attach significance to subsection (2)(f), which clearly brings within the rubric of administrative action here not just the non-promotion itself but things necessarily connected to it, in this case being the conveying of news about that and addressing the consequence of it in a telephone conversation.

Your Honours, it is not expressly stated in terms in section 5A that the exclusionary provision is directed principally to psychiatric or psychological injuries but, with respect, it does emerge almost as a necessary feature of the provision. For instance, when one has regard to the instances of administrative action - they are things like appraisal, counselling, disciplinary action, non-promotion, reclassification and so on - those things do not involve the application of any physical force. They would ordinarily be unlikely in the extreme to cause physical injury.

This is an exclusionary provision directed principally to the suffering of psychological or psychiatric injuries as a reaction to the taking of administrative action and things connected with it and that is exactly what occurred in the respondent’s case. We say her injury comes within, as it were, a central concern, the dead centre of the exclusionary provision.

She reacted to the news of her non-promotion by suffering a significant injury, albeit not because of a disappointed yen for what other employees might have regarded as a valuable aspect of the promotion, namely, an opportunity for career advancement. She did not ascribe that value in her mind to the subject promotion, but she ascribed another value to it, namely, as a means of avoiding the supervision of Mr Mellett and, in our submission, there is simply no warrant in the plain text or the purpose of section 5A to drill down and draw some discrimination between qualifying reasons for the psychiatric reactions such as disappointed yen for career advancement, and non-qualifying reasons for the injurious reaction such as not wanting to return to work under a particular supervisor or not wanting to return to work at a particular workplace.

After all, those sorts of matters are inherently in the eye of the beholder. Someone might seek a reclassification or a transfer or promotion for all sorts of reasons that might have nothing to do with what other employees might see as the ordinary intrinsic value of those particular forms of administrative action and, with respect, the exclusionary provision operates, in our submission, agnostically or in a neutral way with respect to that. What it requires is that the injury be a reaction to the taking of the administrative action and matters connected to it.

Why the administrative action operated on the mind or psyche of the employee may in fact be relevant to the reasonableness limb, but it cannot rob the psychiatric reaction of its causal consequence in circumstances where obviously enough the injury arose as a result of the reaction of the mind or psyche of the employee to the administrative action question.

One asks whether the taking of the administrative action caused an injurious reaction. If the answer to that question is yes, one does not then distract oneself by drilling down and asking why by reference to an architecture of qualifying or non-qualifying reasons and, with respect, Justice Murphy below approached the Act on the basis that, because the respondent did not yearn for the subject promotion for its own sake, that is, as an opportunity for career advancement, but yearned for it for a different reason, that took her injury outside the reach of the exclusionary provision, and we say that is an error of construction.

BELL J: If an employee perceives that she is being subjected to treatment that might broadly be described as bullying, but that none of the instances that give rise to that perception constitute administrative action within the meaning of section 5A, and the employee suffers a psychological injury as the result of the perceived bullying, does it follow that the perception that the employee has been bullied by her supervisor means that she comes within the definition of “injury”, including that the perception of bullying amounts to the significant degree of contribution by the employee’s employment?

MR HOWE: Your Honour, in relation to the general thrust of your Honour’s question, the answer would be yes, subject however to this. There is an exception which has been recognised for many years now that, if the employee’s perception is not genuinely grounded in any transactional activity in the workplace itself but is wholly the product of a diseased mind, as it were, misconceiving a completely inert workplace, then of course one could not say that the workplace had significantly contributed to the disease state there.

But if in your Honour’s scenario the perceptions of the employee are genuinely grounded in matters being transacted in the workplace and the actual form of presentation of a supervisor and actual conversations that are had that stop short of constituting administrative action, so if in fact the perception derives from real matters that did operate in the workplace and which generated stress and conflict and the like, then yes, your Honour would be correct in that.

BELL J: What I am just trying to understand is this. When you go back to Mr Burrows’ review decision of Comcare’s refusal of liability in this case at appeal book 6, one sees that the respondent is said to have submitted a claim in relation to anxiety and depression that she attributed to being subjected to repeated inappropriate behaviour.

One then sees in Mr Burrows’ reasons reference to the terms of her complaint of April 2012 which detailed some 11 instances of asserted inappropriate behaviour said to have occurred prior to her appointment to the acting cross-media reporter role. As the result of the internal investigation, the reviewer appears to have accepted that there was no evidence to support those claims and the reviewer proceeded to affirm Comcare’s decision.

By the time it gets to the Tribunal - and we do not have before us the terms of the original claim – there is an acceptance, as I read the Tribunal’s reasons, that it is relevant to have regard to administrative action, that administrative action is the promotion decision and that gives rise to the concession respecting the significant contribution that employment made.

Now there seems to be in some of the submissions that the respondent makes what is, in essence, underlying it is a contention that when one properly has regard to the causation consideration one goes back and looks at the circumstance that her decompensation was the product of the feared return to the pattern of ill-treatment to which she had been subject.

I am just trying to understand how the matter moved from a complaint about repeated inappropriate behaviour, which may give rise to the issue that I was just agitating with you, Mr Howe, and to the way it appears to have been presented in the Tribunal.

MR HOWE: I think the reason for the recalibration of the issues was this. This respondent accepted that in respect of any pre-existing injury which she attributed to these instances of bullying and harassment, that injury which was an adjustment disorder - sometimes subclinical, sometimes clinical, according to the Tribunal – did not result in any incapacity for work and the rub in this concerned the aggravation of that injury which became permanently incapacitating in March of 2012.

BELL J: And that is why, notwithstanding the terms that Mr Burrows suggests her complaint was made in, it was identified as an injury dated from 19 March 2012, being the date of her consultation with Dr Bennett.

MR HOWE: That is right, pursuant I think to section 7(4) of the SRC Act.

BELL J: Yes.

MR HOWE: This was an issue that was explored by Justice Flick with the respondent’s counsel, Mr Grey, in the course of the Full Federal Court, and he specifically asked Mr Grey whether or not any reliance was placed upon the pre-existing adjustment disorder that pre-dated the aggravation in March, and I can hand up to your Honours copies of the relevant transcript, and Mr Grey indicated that no, there was no reliance placed upon that. Its only relevance was that it helped explain the seriousness of the aggravation in March 2012 because it was a predispositive factor that fed into the seriousness of that aggravation, but no particular significance was attached to it and, with respect, that is the basis upon which the Tribunal directed its principal concern and, similarly, was the basis upon which the matter proceeded before Justice Griffiths.

BELL J: And that explains, Mr Howe, why it was that the Tribunal did not concern itself with whether the workplace was, as you put it, an inert workplace, or whether there had in fact been conduct that might have been viewed as – conduct that might in fact have constituted bullying.

MR HOWE: That is exactly right because, no matter what might have prevailed or obtained in relation to the earlier adjustment disorder and whether it was in fact caused by the taking of reasonable administrative action or not, the central focus became the aggravation in March 2012 because that was what was unquestionably the cause of the incapacity which intruded immediately from that day and has subsisted ever since.

FRENCH CJ: At the very least, one could say there was tension between Ms Martin and Mr Mellett in the workplace, without allocating blame one way or the other, in terms of the working relationship.

MR HOWE: Exactly so. It was unquestionably strained. Part of what the Comcare decision-maker relied upon in the decision that Justice Bell has referred to, did consist of things such as appraisal, and the like, and the taking of what could be administrative action, but it all receded because the focus became the incapacitating aggravation in March 2012.

Just in relation to the transcript I have handed up, your Honours will see on page 5, at about line 24, Mr Grey puts a submission and Justice Flick says:

And you don’t challenge that bit?

And, Mr Grey says:

I’m not challenging that. Perhaps I could have, but I have chosen not to –

Then, over the page, line 21 and 22:

It really comes down to the question of whether the events contributed to the condition which resulted in her going off work –

That is the March 2012 injury:

because it wasn’t until after the appointment decision was made that Ms Martin suffered a decompensation that resulted in her suffering an invalidity for work, or her incapacity for work.

Then, Justice Flick sought further confirmation which was given on those pages. So, with respect, whilst it is relevant background and whilst we accept that there was a condition, to which the employment had significantly contributed which pre-dated the aggravation, for present purposes, that can be, as it were, set to one side because what we have here is an issue about whether the causal test posed in the exclusionary provisions properly applied to the March 2012 aggravation consequent upon, we say, the non-promotion decision.

Could I revert to some propositions in relation to the statutory text and its purpose? I have put to your Honours that the two reasonableness requirements and the meaning of “administrative action” and that it needs to be taken in relation to a specific employee operators, qualifiers or limitations but none others, are stated and, in our submission, none other – no other limitational qualification should be discerned to exist so as to intrude upon the simply valuative exercise posed by the words “as a result of” having regard to the objects of the provision which, clearly enough, were to confer – not just broad – but complete protection with respect to the financial consequences to the Commonwealth of psychological or psychiatric injuries which result from an employee’s reaction to the taking of administrative action.

In particular, we say, it is quite inappropriate to work back from supposed commonsense as an organising principle by reference to what might be intuitively regarded as a better or preferable result and that is because, of course, as this Court has noted again and again, applying commonsense as some sort of freestanding organising principle in a context where the causal test arises under a statutory provision, can distract from the essentiality of the proper construction of the provision by reference to its texts, its objects and purpose and can also mask additional policy-making under the guise of imputing an intention to the legislature.

This Court on Wednesday of this week had something to say about that same general topic in the case of Deal v Father Pius Kodakkathanath which is reported only electronically at this stage, [2016] HCA 31. I can hand up to your Honours copies of that. It is really paragraph 37 that I would ask your Honours to note. That is a general principle which has been applied in an enduring consistent way by this Court in all manner of statutory contexts. One does not work back from commonsense as an organising principle where the issue concerns a causal connection arising under a statutory provision.

It is a reason in Allianz, the Motor Traffic Accidents Act. It is a reason under section 82 of the Trade Practices Act in I & L Securities. It is a reason in this case under the Occupational Health and Safety Act. It arose in Tambree’s Case under the Travel Agents Act and the Fair Trading Act and in all of those different statutory contexts this Court has emphasised that causation is always purposive and one discerns the purpose as a matter of conventional statutory construction.

FRENCH CJ: Can I just try and analyse the sort of causal connections that we are looking at here? We are working on the assumption of a disease within the definition in 5B(1) and we are working on the assumption, are we not, of a disease contributed to in a significant degree by the need for her to return to what she regarded as a toxic workplace and the exclusion operates - that by itself does not fall within the discourse of reasonable administrative decisions for present purposes - the exclusion operates because that return, you say, is a consequence of a reasonable administrative decision, namely the non-promotion decision and therefore the disease, you say, falls within the excluded category of a result of that non-promotion decision, even though it is ultimately caused by the fact she has to return to a toxic workplace.

MR HOWE: Yes, we would put it perhaps slightly differently, namely that the need to return to Mr Mellett’s supervision was part of and was bound up with and a necessary and understood consequence of - - -

FRENCH CJ: Well, you say it is all the one decision.

MR HOWE: It is, because of section 5A(2)(f). It includes the non-promotion and things done in connection with it, such as the conveying of the news and the implementation of the decision. She was acting in it in a temporary capacity as an occupant. Obviously enough when the substantive occupant who won the promotion took over the position she would need to go back to her own position.

FRENCH CJ: What you are really saying is that you cannot slice it up in the way that I have, that the contribution from employment, which characterises her disorder as a disease for the purposes of 5B, is the decision not to promote, coupled with the consequence of return, and it is because of - that conjugation is a reasonable administrative action.

MR HOWE: Exactly so, and it was her psycho-emotional reaction to that administrative action, set out in subparagraph (f), which led to the injury. It was an injury-inducing reaction. It happened immediately. It happened there and then and she has not recovered from that.

BELL J: Had she held it together and returned to her position under Mr Mellett’s supervision and on the first morning that she turned up Mr Mellett had ignored her while greeting other employees and she had at that point packed up her things and headed back to Adelaide, would the exclusion nonetheless apply?

MR HOWE: Well, with respect, if in that scenario no part of her reaction was attributable to the non-promotion and what necessarily attended it, and if her reaction was wholly referable to something which was transacted in the workplace between she and Mr Mellett, then it would seemingly not come within the exclusionary provision. The exclusionary provision is directed to reactions to the taking of the administrative action. On what your Honour has described, her reaction was not to the taking of the administrative action and things necessarily bound up with it but was a reaction to a manner of treatment of her by Mr Mellett.

Now, it may be, of course, that in the circumstance posed by your Honour, there might be expert evidence as to a combination of factors: (a) a response to Mr Mellett ignoring her; and (b) ruminating overnight on the disrespect that she felt in not winning the promotion, and so on. Now, in that slightly adjusted counterfactual, it may be that the injury would come within the exclusionary provision because it might properly be said to be a result of both Mr Mellett’s treatment and her reaction to the non-promotion decision, but it will all depend – it is a fact-dependent inquiry. But just upon what your Honour put to me, and no more, we would accept that it would probably not come within the exclusionary provision.

In that circumstance, the non-promotion and the news of it would be just chronologically precedent to the injury. The injury is not an injurious reaction to the taking of the administrative action. It follows it quickly a day later, but in your Honour’s example if it was six months later that more clearly demonstrates that the psychological reaction is not the product of an injurious reaction to administrative action. It is a reaction to transactional activity experienced by the employee in the workplace and so we would accept would not come within the carve-out.

NETTLE J: Is it not in each case that her psychological reaction is because of her perception of Mellett? It really has nothing to do with the fact that she is not being promoted; it is that she fears or dislikes or has a bad reaction to Mellett. It is ameliorated when she gets away for a time from him but once she has to go back, for whatever reason, it is reagitated.

MR HOWE: Well, with respect, we accept that there is in one sense only a fine adjustment made between the facts here and the scenario posed by Justice Bell, but nonetheless the fine adjustment to the facts results in a fundamental difference. In the first scenario which obtained here, the expert evidence was that her injury was a reaction to the non-promotion and what necessarily that signified in her mind.

NETTLE J: But only in the sense that it made her realise that she now faced Mellett again.

MR HOWE: Yes.

NETTLE J: All other contributions were said to be de minimis.

MR HOWE: Yes. That was necessarily something which adhered in the non-promotion, which she understood, and the non-promotion signified that - - -

NETTLE J: “I’m going back to Mellett”.

MR HOWE: Yes, exactly so, but, with respect, that comfortably comes within the exclusionary provision, whereas the different scenario is not just a reaction to Mr Mellett, it is not just, “I don’t like him and I don’t want to work with him”, it is not just a dread of returning to work with him, it is a psychiatric injury that is the direct and immediate outcome of or reaction to actual interactions between Mr Mellett on the one hand and the employee. The mere fact that in each scenario there is a common denominator of dislike or distrust for Mr Mellett does not cause each scenario to fall outside the exclusionary provision.

KEANE J: It might be, in the sort of case we are talking about, a sort of hypothetical case, it might be that there would be expert evidence to suggest that the failure of the promotion was itself causative of a reaction on the footing that her response was “I can’t get out of here. My only way out was promotion. I was refused. For that reason, I’m stuck.”

MR HOWE: Quite so.

KEANE J: There might have been another application for a transfer, for example, and if the transfer were refused and then there were the decompensation, then another question would arise as to whether that administrative action in refusing the transfer was the cause of the decompensation. But in all these hypotheticals, it all depends on what the evidence says about the causes for the decompensation that renders the employee incapacitated.

MR HOWE: With respect, we completely embrace that proposition.

KEANE J: In this case, there was no exploration of any of – for example, there was no invitation to make a finding as to whether Mr Mellett actually did harass and bully or whether the respondent’s perceptions that he had done so were in any way justified. There was no invitation to make those findings and no such findings were made.

MR HOWE: That is right.

KEANE J: The only case that was being advanced was this case of decompensation prompted by the failure and being told about the failure of the application for the promotion in circumstances where both subjectively in the respondent’s mind and objectively as a matter of the exigencies of the workplace, the refusal of the promotion meant exposure to return to working with Mr Mellett. So they are two sides of the one coin.

MR HOWE: Yes, your Honour, we accept that. We do accept that in this area of discourse sometimes it can seem paradoxical that a fine adjustment to the facts results in a wholly different outcome in one case, the injury - - -

KEANE J: Well, in this field of discourse, the fact that fine adjustments of the facts may produce different results is hardly something new.

MR HOWE: Exactly so. Workers compensation law is replete with it. For instance, a heart attack at work, if it happens on the pedestrian crossing outside work it is non-compensable; if it happens in the elevator on the way to work it is probably compensable. All sorts of fine distinctions can fundamentally alter the facts in a way that brings the employee within or outside the compensation rubric.

With respect, resort to counterfactual with fine adjustments of the kind we have just discussed can be somewhat beguiling or confounding because, at the end of the day, it truly is a fact-dependent exercise and what appears at first instance to be a fine adjustment can, in fact, properly have fundamentally different consequences in terms of compensability or otherwise.

Just to conclude our analysis of the statutory text and its purpose, we have referred in our written submissions to the explanatory memorandum. It is a very detailed document. I will not take your Honours to it. We have quoted from relevant passages. It belongs to one of those exceptional explanatory memoranda where there is some discernment of a tussle or a struggle between, as it were, the courts and tribunals interpreting legislation, on the one hand, and what the intention was that the legislature initially in enacting the provision and all of that is laid out in the EM.

It is said that these provisions need to be tightened up with a view to avoiding the discernment of loopholes that rob the exclusionary provision of its protective effect. The language is extraordinarily resonant of a desire on the part of the legislature to really give the exclusionary provision work to do. It goes to whether or not there is an injury. That is a foundational concept. It is not, as it were, a qualification to a liability that otherwise arises. The effect of the exclusionary provision is to deem the condition in question as not being an injury for the purposes of the Act. It is outside the coverage of the Act altogether.

So, the statutory purpose was to remove, wholly from coverage of the Act, psychiatric or psychological injuries which are the consequence of injurious reactions to the taking of legitimate management action subject to satisfaction of the qualifications and limitations to do with reasonableness and the like. In particular, we say, there is absolutely no warrant for reading into the provisions a requirement that the employee’s reaction must be based on one or more factors which might ordinarily be associated in the minds of most employees with the administrative action in question, such as in the case of transfers or promotions and opportunity for career advancement, as opposed to some other factor such as a dread of a particular team or a dread of a particular workplace because it is too far from childcare arrangements, or whatever.

Employees might have intense visceral fear of particular outcomes of administrative action for all sorts of reasons – a dread of a person, a dread of distance travelling to a different workplace that will interfere with childcare arrangements, and so on. The essential question is whether there was an injurious reaction to the taking of the administrative action and if the answer to that is, yes, one does not drill down ask why – was it for this qualifying reason or was it for this supposedly non-qualifying reason. In all cases, if it is an injury that is the reaction to the taking of administrative action, it is subject to the carve-out. Could I ask the Court now to go to the Tribunal’s decision which commences at page 17 of the appeal book?

BELL J: I am sorry, Mr Howe, but just before you do that, can I just ask you this? In light of your acceptance that on the remitter to the Tribunal it would be open to explore, for example with Ms Raabus, whether in the course of her telephone discussion with the respondent when the respondent expressed concerns about returning to Mr Mellett’s supervision, the reasonableness of Ms Raabus’ communication that that result would flow as distinct from saying, well, we will have to look at that, and in the meantime take a week’s rec leave. Am I right in understanding that you accept an inquiry of that kind would be open?

MR HOWE: Yes, precisely because it is the whole of the circumstances surrounding the non-promotion, including the telephone conversation which comes within subparagraph (f), that is the administrative action, and the reasonableness of that is a matter that will be adjudicated upon if the matter is remitted to the Tribunal for reconsideration and rehearing. It will need to be to a differently constituted Tribunal, we should say, because Senior Member Britton is no longer a member of the Tribunal. But yes, the respondent could contest the application of the exclusionary provision on the basis that something was transacted in the course of that telephone conversation that meant that the administrative action was not reasonable or taken in a reasonable manner.

FRENCH CJ: That means we are really here on a very narrow point.

MR HOWE: We are, on the causation question only, as a result of - the Full Court below found that one does not even get to an assessment of the reasonableness or otherwise of the - - -

FRENCH CJ: We assume for the sake of argument, because it has yet to be resolved, that the relevant administrative action was reasonable.

MR HOWE: Yes, or one just parks that and says there is no decision about that.

FRENCH CJ: But for the purposes of applying the statute, we do not have to – well, we do not inquire into that.

MR HOWE: Do not inquire into that. One approaches it on the basis that it is administrative action, put aside whether it was reasonable and taken in a reasonable manner, and one simply asks on the facts as found by the Tribunal was it “a result of” that administrative action broadly conceived or characterised in accordance with subparagraph (f). That is the only issue. It is truly a very narrow issue of causation.

GAGELER J: And your submission can be put very narrowly that, if it is in reaction to, then it is as a result of?

MR HOWE: We say that is the dead centre of the exclusionary provision. It might not be the outer reaches, but it is certainly the central concern. In our submission, if the taking of the administrative action provokes an injurious reaction on the part of the employee, then you are at least within the rubric of the exclusionary provision, subject to satisfaction of the other limiters or qualifiers.

FRENCH CJ: It does not matter in that circumstance that the reaction can be traced to a fear of the consequence of the reasonable administrative action?

MR HOWE: That is right.

FRENCH CJ: Because the reasonable administrative action is the operative.

MR HOWE: That is right. It is a distinction, with respect, that does not sound in any difference in terms of the application and reach of the exclusionary provision. One does not engage in some artificial dissection of the administrative action into slow-motion component parts and say my injurious reaction was a consequence of this attribute, or this characteristic, or this consequence of the administrative action.

Could I first ask your Honours to go to paragraph 30 of the Tribunal’s decision on page 23 of the appeal book, just to ask your Honours to note that in the middle of that paragraph, the respondent had given evidence that she focused:

all her energy on winning the permanent position –

and the reason was because that was the opportunity to avoid Mr Mellett’s supervision. Then, in paragraph 31, your Honours will see that the respondent gave evidence that she previously sought other positions as a means to remove herself from Mr Mellett’s supervision.

The subject of cross media reporter was not in fact her preferred option. That is why, as it were, everyone accepted, and we presently accept now – although it was put in contest at the Tribunal – that she did not have any independent or underlying yearning for the subject promotion as an opportunity to advance her career. If your Honours could go to 37 very quickly, there is a very pithy encapsulation of the medical evidence:

Drs Begg and Clarke agreed that in March 2012, when notified that she had not been appointed . . . there was, as Dr Clarke put it, a “significant deterioration in [her] mental state”.

That is the injurious reaction which brought her injury within the exclusionary provision. If your Honours could next go to paragraph 51 on page 29, your Honours will see there that the Tribunal summarises the respondent’s argument concerning the proper construction of the exclusionary provision, namely its operation in a non-promotion context depended upon the employee yearning for the subject promotion by virtue of a desire to advance his or her career. Your Honours will see at the end of paragraph 53, in the last sentence, the Tribunal again recounted evidence given by the respondent herself:

when she realised she would be returning . . . she was devastated, “broke down uncontrollably”, could not stop crying and became overwhelmed –

Again, that is a palpable, indeed, very expressive encapsulation of the central operation of the exclusionary provision. It is an injurious reaction to administrative action.

NETTLE J: It seems to be an injurious reaction to the second part of the conversation; not the announcement that she had missed out on the promotion, but the announcement that it meant she would be going back to Mr Mellett.

MR HOWE: Yes. Because the value or purpose of seeking the promotion in her mind was not the opportunity to use or develop new skills, it was not a yearning for career advancement, that aspect of the non-promotion did not disappoint her. There was no injurious reaction to that aspect of the administrative action but there was an injurious reaction to what else the non-promotion signified to her in her mind and which she reacted to immediately and, indeed, to some extent uncontrollably. At the start of 54, again we have the immediacy dealt with:

Immediately after that conversation -

et cetera. Your Honours could note the whole of paragraph 55, which makes clear that the respondent saw the promotion as having value for her for a specific reason. It:

at least guaranteed that she would be removed from the direct supervision of Mr Mellett.

Then at paragraph 58 on page 31, where the Tribunal records a finding of causation based on the medical evidence as to what the non-promotion meant to the respondent, having regard to her mind and psyche, her subjective state of mind, her fears, hopes, expectations and so on. Then at 59, your Honours will see another encapsulation of the central issue of statutory construction posed in these proceedings. In effect, Justice Murphy gets very close to adopting the respondent’s argument as summarised there as being the correct construction and we say that, in so doing, his Honour erred.

Your Honours have already noted paragraph 60, where there is a factual finding in the first dot point, which is significant, and that is made clear by what follows in paragraph 61 and in particular at the top of the page:

That her reaction to the offending decision was primarily attributable to - - -

one matter:

is irrelevant.

That is because the Tribunal properly appreciated that the essential concern of the exclusionary provision or causal test is directed to whether or not there was an injurious reaction to non-promotion. There the Tribunal is unquestionably making a finding of fact that this respondent’s injury was a result of the non-promotion. Then, toward the end, in her mind, the return to Mr Mellett’s supervision:

was a direct and foreseeable consequence of the decision.

It was not only foreseeable; it was actually foreseen by her. It was the very purpose of her seeking the promotion. In the light of that, we say the Tribunal properly construed the provision and by reference to the facts found by it and the medical evidence before it, it located the respondent’s injury within the exclusionary provision subject to the qualifications and limitations I have referred to. Could I finally now take - - -

FRENCH CJ: And, sorry, the reasonable manner limb of the argument was all to do with Mr Mellett’s involvement on the selection panel?

MR HOWE: Yes, nothing else. But that again will be up for grabs, as it were, on a remittal if that is the outcome of this appeal. Could I ask your Honours to go to the principal judgment of Justice Murphy which commences at page 124 of the appeal book, and could I ask your Honours to go firstly to paragraphs 92 and 93? At 92, his Honour sets out four factual findings of the Tribunal and in particular the finding at (d) perhaps looms largest. The Tribunal:

found that Ms Martin’s reaction to the relevant decision was primarily attributable to her dread of returning to work under Mr Mellett and not disappointment with the decision not to promoted her -

So that is, if you like, an allusion to this argument that in the context of non-promotion, absent a disappointed yearning for the position for its own sake, an injurious reaction does not fall within the exclusionary provision. Then his Honour noted in paragraph 93 that if the matter had ended there, as it were, according to his Honour there could be no real question that she did not suffer her injury “as a result of”.

Now, with respect, we say that reasoning is erroneous. The approach completely ignores the terms and effect of section 5A(2)(f) and it also suffers from the vice of attaching misplaced importance as to why the administrative action unquestionably caused the injury, rather than concentrating on whether or not it did so by reference to the employee’s state of mind.

Could your Honours turn to paragraph 107? Your Honours will see these paragraphs, 107 and following, immediately come after 106 where his Honour introduces the topic of the Tribunal’s supposed error in construction. In paragraph 107 his Honour refers to the text but, in our submission, without any real analysis or consideration of the matters previously canvassed by me in the course of these submissions.

There is no real respect for the amplitude of the test. It is contradistinction from that which arises at the point of 5B whether an injury significantly contributed to. There is no deference to the parliamentary purpose that emerges from the statutory text, the very broad, expansive, indeed complete, coverage that was intended with respect to these sorts of injuries and so on. Rather, what his Honour quickly does at paragraph 108 and following is to resort, almost by first instance resort, to commonsense as an organising principle.

His Honour reverts to that topic at paragraph 110. With respect, to describe the basic or fundamental task of the Tribunal in those terms is itself to express error. The Tribunal’s task was not one which involved the untethered application of commonsense at all. The Tribunal’s task was to make findings of fact and to undertake an evaluative exercise by reference to the terms, object and purpose of the exclusionary provision, not by reference to freestanding notions of supposed commonsense.

That then led his Honour at paragraph 111 to revert again to what we submit is an uninformative distinction between the different reasons which might account for the injurious reaction. They might explain again why a particular employee succumbed to an injurious reaction, but they do not go to whether or not he or she did, in fact, suffer an injurious reaction to the administrative action.

That false distinction is then further developed by his Honour in subparagraph (d), in particular, over the page at appeal book 138 and it is a distinction which is developed further in paragraphs 112 and in 113. That seems to, again, be something that his Honour reverts to in paragraph 120 – appearing on page 140 of the appeal book – but, in particular, in subparagraphs (a) and (b).

Indeed, at the end of paragraph (b), his Honour draws what we say is an extraordinarily fine, indeed false distinction between a result, on the one hand – noting that result is the causal language employed in this exclusionary provision – and the consequence, on the other hand. With respect, that distinction between a so-called effect, or result, on the one hand and a consequence, is something which finds no voice whatsoever in the terms or purpose of this exclusionary provision. Indeed, that is the very sort of fine distinction which the explanatory memorandum makes clear the legislature intended to avoid by way of so-called loophole from the coverage of the exclusionary provision.

NETTLE J: Mr Howe, is there any limit or is “but for” enough to be “as a result of”?

MR HOWE: “But for”, again, would not be enough. It is an exclusionary – not a sufficient and exhaustive inclusionary test of causation and we accept that “as a result of” requires an evaluative exercise which is not mechanistically ordained by application of the “but for” test. It is a search for a material cause. The “but for” test suffers from philosophical or scientific notions. Any chronologically precedent factor which, if you robbed, might have altered the course of events can be regarded as within the “but for” test but we accept that is not a good and sufficient approach.

NETTLE J: So the test is that whatever is said to be the factor which the injury results from is a material cause of the injury. Is that it?

MR HOWE: Yes, materially contributes to, “as a result of” gets close to what is known as a material contribution test. It must be a material contribution. It does not have to be the predominant, the substantial, the significant cause, but it has to actually make a contribution which can properly be described as material as opposed to immaterial – certainly not de minimis, but material. It must make an operative contribution. Beyond that there is no other threshold.

GAGELER J: Is it any different from the test of causation in section 5B, contribution “to a significant degree”?

MR HOWE: Yes, we would think so, because the expression “to a significant degree” has been advertently deployed in section 5B as a necessary threshold, but is completely absent from section 5A.

NETTLE J: It is not enough to be contribution to an insignificant degree, presumably. There is material between “significant” and “insignificant”. Is that about it?

MR HOWE: Yes. It must have some significance in the sense that it must be material. I do not want to try and, as it were, replace the statutory test with a paraphrasing, but we resist the notion that it has to be substantial or significant. We accept it cannot be insignificant, and we accept as well that what lies between “not insignificant” and “significant” is a matter that can be confounding, but it ultimately involves an evaluative exercise.

FRENCH CJ: The question only arises if what you have is a disease that is contributed significantly to by the employment. You have something which, absent the exclusion, would meet the threshold requirement and then the carve-out is if it is in that class of what would otherwise be a disease which is suffered as a result of reasonable administrative action. The causative threshold between the ailment or aggravation and employment is already met, for the purposes of argument, and then you have to see whether it can be characterised - having met that causative threshold can be characterised as a result of reasonable administrative action.

MR HOWE: That is so, your Honour.

FRENCH CJ: So you are not talking so much about thresholds here. You are just talking about the class of the cause.

MR HOWE: That is right. When one comes to apply the exclusionary provision, though, one simply applies the language of “as a result of”.

FRENCH CJ: That is what I am saying. What I am putting to you is that when you are looking at whether it is as a result of reasonable administrative action, we have already established that there is a cause related to employment. The question is whether the cause falls within that category.

MR HOWE: With respect, the cause - - -

FRENCH CJ: Otherwise it is not a disease to start with, so you do not even get there.

MR HOWE: Yes, I accept that, your Honour. I would just ask the Court to note, though, that there might be multiple causes which in combination satisfy the 5B threshold of contribution to a significant degree. The exclusionary provision might not apply to each of those causes, but if it applies to one of them and if it can be said that the injury was a result of the taking of that particular administrative action, then that is enough. One does not then go on and say on top of that, it not only has to be a result, but the administrative action must have caused the injury to a significant degree.

We would simply note that what appears in section 5B(3) which defines significant degree as:

substantially more than material -

finds no voice or expression in section 5A and in particular the exclusionary provision. But, nonetheless, the injurious reaction cannot be said to be a result of the taking of the administrative action unless there is a real and material contribution of the - - -

FRENCH CJ: Justice Murphy at paragraph 121 on page 142 seems to be getting out a straw person to some extent when he says that it is an error:

to treat as causative an event which was no more than chronologically precedent –

I mean, that is a statement of the blindingly obvious, mere chronological sequence does not establish cause and effect.

MR HOWE: That is right, but what we say - - -

FRENCH CJ: I am not sure the Tribunal was doing that.

MR HOWE: No, the Tribunal certainly did not regard the non-promotion and matters bound up with it and which necessarily inhered in it or part of it, such as the telephone conversation, as merely chronologically precedent. That was his Honour Justice Murphy’s separate and independent characterisation based upon a different fact finding and, with respect, in so doing his Honour strayed beyond the proper role of a Court of Appeal, entertaining an appeal from a first instance decision itself confined to a question of law which proceeds on the basis of proper respect for the fact-finding role of the Tribunal.

Your Honours will also see at the end of paragraph 124 that that differential process of fact finding finds florid voice in what is put in the last sentence:

In the present case the Tribunal found that the ABC’s failure to promote Ms Martin was “immaterial” in causing her condition.

With respect, that is a complete inversion of the finding of the Tribunal. The Tribunal accepted that she did not want the promotion for its own sake. She did not see it as having any independent or intrinsic worth. It was simply a means to an end but the Tribunal positively found that her disappointed expectation that the promotion would be the solution to the problem provoked an injurious reaction to the administrative action.

Could I just come to paragraph 120(c)? We do not want this, as it were, to be the tail that wags the dog but in the very final sentence of paragraph 120(c) which appears on page 141 of the appeal book, his Honour Justice Murphy noted that:

There is nothing in the decision to indicate that there was evidence before the Tribunal to support a finding that Ms Martin saw it as a “direct and foreseeable consequence” of the failure to promote her –

Well, with respect, his Honour seriously here misunderstood and, indeed, subverted the essential process of fact finding that the Tribunal engaged in which attached full and proper weight to the obvious fact that the respondent sought the promotion for a particular reason.

It was the disappointed expectation of fulfilment of that reason that provoked the injurious reaction and, even were it otherwise before Justice Griffiths, the respondent did not put in a notice of contention that

that particular finding of fact was unsupported by any evidence. It was not canvassed in the course of the appeal to the Full Court. Again, it is, with respect, the product of some greenfields evaluative exercise that Justice Murphy succumbed to which strayed beyond - - -

FRENCH CJ: I suppose the question of return only arose because she was in an acting position which had taken her out of Mr Mellett’s orbit.

MR HOWE: Exactly.

FRENCH CJ: I suppose the question then arises, is the situation any different if, while still in Mr Mellett’s office, she had applied for the promotion and been refused it, from an analytical point of view, because then the consequence would be she stays where she is.

MR HOWE: Exactly so.

FRENCH CJ: The word “return” comes in simply because of the acting position.

MR HOWE: Exactly so. That is right, it must not be lost sight of that the very opportunity to act in the position pending its substantive filling was itself something that the respondent pursued because she saw that as a worthwhile interim solution to a problem and she put all her energy into getting the promotion in order to achieve a longer term solution to the problem as she saw it. May it please, unless there is something I can further assist with, those are the appellant’s submissions.

FRENCH CJ: Thank you, Mr Howe. Yes, Mr King.

MR KING: Your Honours, in our three-page outline of oral argument we want to present, we pointed out a few misstatements in one of my friend’s submissions. He, with all respect to him, appears to have made a couple more which I will deal with at the outset. He said, as I understood him, that it was not part of the respondent’s case that there was a separate factor, namely, the second stage of telling the respondent, not only have you lost the job, but later in the conversation as to what happens next, well, it means you will be going back to where you were, and that that was a causal factor.

The respondent’s case at all times was that she had her psychological condition as a result of events occurring in the workplace, namely, the behaviour of Mr Mellett, and it was found that she did have a psychological condition which long predated the promotional decision. The case was put in the alternative that nothing causal took place at the time of the making of the promotional decision and the subsequent conversation, that her condition was just a continuation of the problem rooted in the behaviour of her boss.

The alternative was that if something causal happened in March 2012, it was not the failure to get the promotion. The evidence was that she had been unsuccessful in seeking promotions before. My learned friend took you to the paragraph in the Tribunal’s reasons which said that she had made a number of such applications before.

Her evidence, and Ms Raabus’ evidence which, again, is set out in the critical paragraph of parts of the Tribunal’s reasons, was that she took in her stride the news that she was not getting the job. She broke down, as it were, later when a different discrete topic came up in the conversation and that was the evidence of the doctors.

Your Honours, paragraph 11 of our written submissions says how the case was put and I adhere to that paragraph. Your Honours, I do not want to belabour the Court, but if I hand up copies of the first seven pages of the transcript before the Tribunal, which I do not suggest it is necessary that your Honours look at now, on a number of those pages, pages 3, 5, 6 and 7 – and this was in the opening, the opening, your Honours – that was squarely put. If you look at the top of page 3 perhaps we can quickly go through it.

Of course, our case is that the failure to get the position was not causative. At the foot of page 5, at line 41, your Honours see that the real question is what happened afterwards – there, a conversation with Ms Raabus – and that carries on. At the top of page 6, about line 6, there is a real distinction to be made between being told you are going to have to go back and being disappointed – and the same again on page 7. My learned friends say that it was mentioned in closing address. The fact is it was mentioned in those places in opening and it was always part of the respondent’s case.

BELL J: Mr King, can I just take up with you, the only information we have about the claim that the respondent made, which is Mr Burrows’ reasons for his review determination on appeal book 6, which notes the condition – there described as:

Condition: major depressive disorder, single episode.

Date of Injury: 19 March 2012

As I understand it, that is the date, for the purposes of section 7(4) of the Act, on which the respondent consulted Dr Bennett and a diagnosis was made of a depressive condition. I understood the Tribunal to find, on the basis of the psychiatric evidence tendered by both sides, that there was an underlying adjustment disorder dating back to mid-2011 that, at the time of consulting Dr Bennett, the respondent had decompensated – that is, the underlying condition had been aggravated – and it was that aggravation that brought her within 14(1) because I take it it was not in issue that it resulted in an incapacity for work.

MR KING: Your Honour, that is so. That is very much something that you took my learned friend to and he answered you, to a degree, in those terms. The situation as I would put it is this. The case being advanced by the respondent included an allegation that events that were prior to that diagnosis.....caused the problem. It was undoubtedly the fact that the problem which was there had not caused incapacity for work. The incapacity for work came only after being told that she was to go back.

Something my learned friend said is relevant here, with respect. I understood him to say to your Honours that the concession that the condition was work related was anchored only to the events in March 2012 - the promotional decision and the going back. Your Honours, that is not the concession which was made by Mr Gollan of counsel who appeared in the Tribunal.

His concession again gets back to the question you put, Justice Bell, as to how, if there had been events happening in the workplace which were real events, do they have a causal impact. My learned friend said, and I would agree with the answer he made, that if there were genuine events, then that can be part of the injury process but if the events are imaginary because of an already existing mental problem, you have no injury.

Mr Gollan conceded, and if need be we can turn it up and hand up that part of the transcript, that he could not say that all the evidence the respondent had given before the Tribunal of her difficulties with Mr Mellett were not genuine. The difference between them and their effect up to that time was that they were not incapacitating. Things changed in March 2012, and the medical evidence to which my learned friend took you - and I will take the Court back, if I may, because it is material to the next point I want to come to – is in two places. One is page 30 of the appeal book, paragraph 56, if your Honours would look at paragraph 56 again.

Then the evidence is reviewed, starting at page 24 of the appeal book under the heading “Medical opinion”, commencing at paragraph 32. Paragraph 35 is of importance, your Honours, then 42 on page 26, there is the finding about line 50:

I find that Ms Martin was probably suffering - - -

beforehand. Your Honours, when you come back to 56 and you go over to 57 on page 31 of the book, and down to 58, the Tribunal is expressing its agreement with the medical experts. The medical experts are saying that she had no yen for the promotion in itself.

BELL J: I think there is no controversy about that, but the Tribunal’s acceptance was of what appeared to be uncontroversial psychiatric evidence that the event that caused the decompensation was her realisation of the decision that she would be returning to work; that is, the realisation of the consequence of the promotion decision. Now, in terms of the injury the subject of a claim, it was the aggravation, was it not, of the ailment, based on the Tribunal’s findings?

MR KING: Yes, your Honour. Your Honour, I am sorry, I do not think I am quite with you at the moment. What I am endeavouring to demonstrate is that there is a legitimate distinction – a commonsense distinction, as I will say later on – between not getting a promotion when she has no real yen for that, for its own sake. It is purely a means of getting away from Mr Mellett. To say that she agrees with the experts is to say, and must mean, that she accepts that the failure to get the promotion as an event, piece of information, is not material. What matters is what comes subsequently, and does make that simply earlier in time.

My learned friend said of Justice Murphy’s comment, which his Honour said was not critical, but with all respect, must be blindingly obvious, that if you are dealing with an Australia-wide organisation like the ABC with offices all over the place, then you have the knowledge that this young woman had applied for a number of jobs in various places before this one. There has to be a second step. There has to be a discrete subsequent event; what do we do with her now that we have not given her this promotion? That was absolutely implicit, with respect, in our case that the promotion - - -

BELL J: You say it was implicit, but it was not put to Ms Raabus, was it?

MR KING: Your Honour, I was going to come to this; I might as well come to it now. I am well aware, your Honours, of the decision of the Full Federal Court in McDonald v Director-General of Social Security, which says that before the Tribunal, there is no onus. Without using this expression, that does not mean it is Rafferty’s rules in the Tribunal, but if someone is going to ask the Tribunal to decide upon the basis of the invocation of a statutory concept, that party has to raise it and make it good at a practical level. There is not a legal onus, but it is a practical reality.

In this case, the respondent’s position was made out by the concession. It was Comcare, having made the concession, which said you carve it out; you carve out the effect of it by the exclusionary provision. We invoke the exclusionary provision. At a practical level, it was their job, and it was for them to get from Ms Raabus, or to prove otherwise, that it was one thing – that the decision to decline the promotion and send her back was one thing.

Now, you only have to put it in that way to make it sound highly improbable. It is unthinkable that there were not two steps, and for his Honour to say that, to use an expression of my learned friend’s, is no more than a statement of the blindingly obvious. Your Honours, it is not a problem for me, with respect and, as I say, it is absolutely implicit in our case that it was the receipt of the information that she was going back that was the causal factor, that it was a distinct second step.

BELL J: Well, it was very obvious that your case was it was the receipt of the information. It is not so apparent on the materials that I have read that it was your case that there was a second administrative action involved, namely, some decision about the consequence of the promotion decision.

MR KING: Your Honour, I accept that we did not prove that there was a discrete second step. What I am endeavouring to put in answer to your Honour is that that is not my problem, that if you look at the reality my learned friend has to show that it is all one blow, all one thing. He is the one who is confronted with the lay and expert evidence that it was not missing out on the job, it was being sent back to Mr Mellett and to a location where there was a fear of bullying which was the problem. All I am saying is that Justice Murphy is not to be criticised for saying that there was probably a second step. He is to be congratulated because it is highly likely.

BELL J: Well, why would it not be embraced within 5A(2)(f) as falling as part of the inquiry into considerations of that which is reasonable in connection with the employee’s failure to obtain a promotion?

MR KING: Because it cannot be automatic that you go back to your old job, especially not in a large organisation, and particularly if you give her a hearing and say “How do you feel about going back?” My learned friend endeavours – and, your Honours, I take my hat off to him for endeavouring to put all this in the reasonable basket which is yet to be returned to. But, with respect, that is disingenuous. It is completely different.

BELL J: I think I have the point.

FRENCH CJ: Would there be any logical distinction in relation to your second step analysis if the case was simply one in which, while still working under Mr Mellett, she made the application for the promotion and somebody rang up and said, “Sorry, you haven’t got it. You’ve got to stay where you are.” Would you call that a second step, because it seems to me that it is a logical implication of what you have been - - -

MR KING: With all respect, your Honour, that is not much different from a question you put to my learned friend which I made a note to come to, and I will come to it now, and again, with respect, it is not a relevant analogy because in that situation you do not have the respondent removed as she was when she was not directly supervised by Mr Mellett from the so-called toxic environment. She is already in it, and all she is doing is doing what she has done before.

She made other applications, as the Tribunal recorded. The factual difference robs it of any relevant analogous quality, in my submission, your Honours. Perhaps, your Honours, I could ask you to look at page 53 of appeal book at line 40 and make it clear that our case was that the decision not to appoint, which is not getting the promotion, was not causal. Our case was always that either the totality of the behaviour of Mr Mellett and the news that she was going to have to go back to him was causal or it was just the news that she had to go back.

Your Honours, that brings me to the point my learned friend made about the proper construction of these provisions based on the fact that in the exclusionary provision, “making a significant contribution”, those words do not appear. I would suggest to your Honours that was put to bed really in the exchange between the Chief Justice and my learned friend in which it was pointed out that in a situation like this, where a concession is made that the employment has been a significant factor and what is being said is what caused it and was significant is also something which bears another quality, namely reasonable administrative action, it has to be the case that it has the same impact because it is the same behaviour or the same cause.

But there is another reason why, with respect, my learned friend’s submission on that point should not be accepted. There is a decision of Deputy President Constance in a case called Wang, which I do not think I need do more than mention briefly, in which she said that when these amendments were made the explanatory memorandum said Parliament was endeavouring to achieve a balance between the rights of workers who have had the misfortunate to suffer injury at work through managerial decisions, employment directions, et cetera, on the one hand and the need for employers to be able to manage.

It would be a complete imbalance if one needed to be significant to ground an entitlement to compensation and the other one to carve it out and take it away did not need to be significant. That was put on the basis of something my learned friend added in answering the Chief Justice, that in this case the analysis put by the Chief Justice is plainly correct because it is the same conduct which caused the aggravation and which has been also said to be reasonable.

But you can have multifactorial cases and in a case where lots of things happened which are a significant cause and which are also said to be in part managerial, you could not have a different causal potency being allocated to each because that would create an imbalance.

Your Honours, I should have mentioned this earlier. It is in relation to the immateriality of the failure to get the job compared with the bad news that the respondent was going back to Mr Mellett. In paragraph 31 of our submissions we say that it must help the respondent’s case. If your Honours look at the last sentence of paragraph 31 of our submissions, we put that as an answer to that proposition of our learned friends.

I am simply repeating myself - if 5B had any relevance it would work against the conclusion my learned friend champions because the psychiatric evidence with which the Tribunal agreed – and I would add to that, as I have already said, the lay evidence of Ms Raabus and the respondent – the decision not to promote made an immaterial contribution. They said that the yen for that job per se was not the key thing.

Your Honours, my learned friend took the Court through the critical part of Justice Murphy’s analysis – and I will not go back to it slavishly – but the analysis, with respect, is unexceptionable. It displays no error and it is not brought down by the criticisms my learned friend advanced.

We accept – we have made this clear both in our primary written submissions and in the three-page document handed up this morning – that statutory questions, statutory concepts, can be hedged in from ordinary language or modified by statutory provisions. That can be so in respect of questions of causation.

But the cases to which my learned friend took the Court were in completely different fields of legal discourse, with much more complicated provisions than this simple one. Even in those cases there is no escape from an end result question of causation. There is always a question of causation. You cannot exclude commonsense. The Full Federal Court said that in Reeve, which is something we refer to.

One would almost think, listening to my learned friend, that he was saying that there is no question of causation in this statutory provision, yet it uses the word “result.” There is just, with all respect, no escape from it.
If one looks at the engine room part of the Tribunal – the Tribunal’s decision which, I think is fair to say is at page 31 of the book over to 32. You really have to read, as part of it, paragraph 51.

Under the little subheading “Conclusion” at the top of 31, the critical paragraphs, 57, 58, 59, 60 and 61 – there is a complete absence of any expression from the Tribunal of something like this. Ms Britton does not say “I direct myself that it is necessary to look at these facts on a commonsense basis. It is necessary to ask myself, as a matter of commonsense, was the bad news the real trigger, the causal factor?” It was obviously something which was a close-run thing because she uses that well-tried judicial expression, “on balance”, in paragraph 62:

I am satisfied on balance –

But, the error is worse than that, with all respect, because she says at the conclusion of paragraph 61 at the top of page 32, in the respondent’s mind:

the former was a direct and foreseeable consequence of the decision.

There was absolutely no evidence of that. It was never put to the respondent that she knew when she made the application that if she did not get the job she would be going back to where she had been. That was an inference.

KEANE J: But that is because her evidence was the reason she made the application was to get away from Mr Mellett. It was the very reason why she made the application. That is why she put all her energies into it.

MR KING: But, your Honour, that does not mean that she automatically goes back there if that job application is unsuccessful.

KEANE J: But it does mean that it is a fair inference of fact that she appreciates that if her application is refused for the permanent position, which will then be filled by someone else, she will be back where she was.

MR KING: With all respect, I do not know that we can - - -

BELL J: Well, Mr King, that is how the Tribunal says she put her case at paragraph 51.

MR KING: That is another part – that is the same error. The Tribunal says that in a number of places and it is wrong each time, your Honour. With all respect, Justice Bell and Justice Keane, we cannot talk about this for very long. I do not accept your analysis, Justice Keane. I repeat my submission that does not follow that she had to have that appreciation, that she had to go into the process believing that if she missed out on the job she was necessarily going back.

KEANE J: Not that she had to as a matter law but that she did as a matter of fact.

MR KING: That is what I am disagreeing with you about. Your Honour, I just will not accept it. I do not, with all respect, accept that that is the logical available inference.

GAGELER J: Mr King, are you challenging the finding of fact at the end of paragraph 61 of the Tribunal’s - - -

MR KING: I am saying that if there was no evidence that is a challenge, your Honour, I accept that.

GAGELER J: If we accept that as the finding of fact, if that is the fact – if we are to take that as the fact, where are you left?

MR KING: I am saying that it is something which Ms Britton came up with. It appears to be something that could be regarded as a finding of fact and I say that is wrong. It is unsupported by evidence.

KEANE J: But you did not challenge it.

MR KING: But then it is repeated - - -

KEANE J: But you did not challenge it in the Federal Court. You did not challenge the finding of fact.

MR KING: Well, Justice Murphy, upon whom I rely, pointed out that it was wrong and that it was the fear of going back to Mr Mellett and the bullying per se, as a separate thing, your Honour.

KEANE J: To the extent that Justice Murphy came to that conclusion in respect of a matter of fact, how was that conclusion on a matter of fact contrary to the finding made by the Tribunal, how was that open to his Honour?

MR KING: Because as a matter of construction he was saying you cannot get away from commonsense and commonsense cannot support the approach taken in the Tribunal in this area. It is as simple as that, with respect, your Honour. Working through Justice Murphy’s analysis, again this is repetitive of what we have put in writing so I will be as quick as I can, page 137 of the book, paragraph 107, the first proposition, it is difficult to say that, as my learned friend puts at the head of his argument, as I understand it, that his Honour did not acknowledge the importance of the text.

The second point is the commonsense component which has to be there and was not respected and page 138 is an accurate summary of the evidence, most of which you have already taken your Honours to, which shows that she cannot have directed herself in the Tribunal by reference to commonsense and his Honour brings that to a head at 112.

What he is saying is that properly construed with the aid of commonsense, these facts almost admit of one conclusion, or actually admit of one conclusion and if you had stopped there you would have done your job and the case would have been over in the respondent’s favour but the Tribunal went on to distort things and that is an error, a further error of construction.

Then we have dealt with the fourth point in writing. We say that Hart does not help my learned friend; it helps us to the extent that it is operative and Justice Murphy was correct in his opening sentences at paragraph 115. The discussion on page 140 is more of the commonsense-type component.

There is some overlap in 141, with respect, your Honours, because there is reference to Justice Deane in March v Stramare which, in my submission, is an apposite reference and it does show that you have a situation in which the Tribunal was seduced, if I can use that expression, by an earlier event and conflated it with a later distinct event, namely the bad news that she was going back.

The sixth point I have dealt with, I repeat myself that there has to be a second thing. The seventh point, it is a floodgates argument which was apparently put below and was properly dealt with. In my submission, your Honours, what this comes to is that Justice Murphy has demonstrated that there was a misconception and a misconstruction and that his decision is correct and that the case should go back.

It has the virtue that we endeavour to outline at the conclusion of our written submissions that, to the extent that there are unexplored features of the evidence as has been put to me and, in particular, there is this question of how it all happened and who might have known what, and it goes to the difference of opinion between me and Justice Keane about the logic of the finding, if it is a finding, all these things can be properly dealt with, if they have not been dealt with, as we put in paragraphs 46 and 47.

Again, I do not want to give an encomium to a member of the Court, but it reflects Justice Bell’s thinking, with respect, that if reasonableness for

one purpose has got to be looked at, well, the whole thing can be better done, if it needs to be better done, the second time around. I think Mr Grey must feel I was not blunt enough with Justice Keane in disagreeing with him in relation to that - - -

FRENCH CJ: He is just avoiding any encomiums, I am sure.

MR KING: - - - in relation to that exchange that we had, your Honour, and Mr Grey has asked me to refer to paragraphs 44 and 45 of our written submissions. Your Honours, those are my submissions.

FRENCH CJ: Mr King, can I just, before you sit down – the relevant ground of appeal to the Full Court was at page 102, ground 3, in relation to the treatment of the notice of contention and that seems to have rested upon “the primary factual findings made by the Tribunal”, et cetera. Is it fair to say that the ground thus stated formed the framework within which the argument was put to the Full Court?

MR KING: I had better get some help on that, if your Honour would pardon me?

FRENCH CJ: Yes.

MR KING: The answer is yes, your Honour.

FRENCH CJ: Very well, thank you. Yes, Mr Howe.

MR HOWE: Your Honour, there is nothing in reply but for one very small matter concerning the decision of the Full Federal Court in Comcare v Hart. If your Honours could go to page 139 of the appeal book where reference is made to the decision in Comcare v Hart in the judgment of Justice Murphy in paragraph 114, and you will see at the end of the passage quoted in that paragraph the words in bold. We would just ask your Honours to note that that decision was decided before the enactment of section 5A(2)(f) and it is almost certain that paragraph (f), which refers to non-promotions, non-transfers and things connected therewith, was an antidote to the bolded passage that appears in the judgment of the Full Court in Hart’s Case.

So we do not cavil with Hart. Special leave was sought and refused, but we would just ask the Court to note that what appears at the foot of the passage in bold probably cannot survive any longer the insertion of section 5A(2)(f), which allows no distinction to be drawn between the process of promotion on the one hand, and the non-promotion itself.

GAGELER J: Can I just ask a question about the effect of the orders you seek?

MR HOWE: Yes, your Honour.

GAGELER J: As I understand it, they would effectively reinstate the order of Justice Griffiths - - -

MR HOWE: Quite so.

GAGELER J: - - - which sets aside the decision of the Tribunal and remits the entirety of the matter to the Tribunal to be determined according to law. Now, is everything up for grabs, whether it is one decision, two decisions? Do we just go back to torts?

MR HOWE: Your Honour, what would not be up for grabs is the factual finding that the respondent’s disease aggravation was an injurious reaction to the non-promotion and therefore satisfies the causal test posed in the exclusionary provision. But all else would be up for grabs, including the reasonableness of the things connected with the non-promotion, and the reasonableness of the manner in which the non-promotion was implemented, and the reasonableness of the constitution of the promotion panel, and, we would think, if the respondent wished to reinvigorate some reliance on the pre-existing adjustment disorder to claim, for instance, medical treatment expenses, they would be up for grabs as well.

GAGELER J: What is it that requires the causation determination to be treated as fixed in those circumstances? Is it some doctrine of law, or is it the consequence of the order? I just do not understand.

MR HOWE: Because there was a finding of fact of causation which was challenged for legal defect and if, as a consequence of this Court’s decision, that finding of fact was open and available and reflected the proper construction of the legislation then, in our submission, upon a remittal, that aspect of the matter ought not be re-canvassed but everything else should proceed.

FRENCH CJ: I have a vague recollection that there were some years ago a vote in Federal Court decisions about the effect of remitter where you are going back and the question of how much was open for reconsideration but I just cannot put my finger on it at the moment. If there is anything that you or Mr King can find that might be of assistance to us in that regard - it was a vexed question, I think.

MR HOWE: Yes. It may be when I think further about it that in light of the need for the Tribunal to be further constituted it does seem odd that there could be a remnant finding with respect to causation that would have governing effect upon the remittal so Justice Gageler might be right.

FRENCH CJ: The question is the form of the order, that is the matter be remitted.

MR HOWE: Yes, for rehearing and determination according to law and if there is an order for rehearing then that probably does, with respect, mean that everything is up for grabs but the causal aspect of the exclusionary provision would need to be determined in accordance with the law as pronounced by this Court. So, could I revise my answer - - -

FRENCH CJ: The law as pronounced in this Court is linked to, of course, a set of facts which have been found.

MR HOWE: Yes, that is true, although the proper construction itself should operate independent of facts. So, in effect, I am revising the answer I gave to you, Justice Gageler, I think there probably cannot be some remnant of the Tribunal’s findings that survives a rehearing.

GAGELER J: So, really all you are arguing for is that it be remitted to the Tribunal to be heard and determined according to law which Justice Griffiths ordered as distinct from what the Full Court ordered according to law as explained in the reasons for judgment herein.

MR HOWE: That is right. May it please.

FRENCH CJ: Yes, thank you. The Court will reserve its decision. The Court adjourns until 10.45 am on Monday, 29 August.

AT 12.09 PM THE MATTER WAS ADJOURNED