Marija Marelic v Comcare [1993] FCA 599; (1993) 18 Aar 392 (1993) 121 ALR 114 (1993) 32 ALD 321 (Extract) (1993) 32 ALD 155 (1993) 47 FCR 437 (9 December 1993)

FEDERAL COURT OF AUSTRALIA

MARIJA MARELIC v. COMCARE
No. NG616 of 1992
FED No. 790
Number of pages - 12
Administative law - Evidence
[1993] FCA 599; (1993) 18 AAR 392
(1993) 121 ALR 114
(1993) 32 ALD 321 (extract)
[1993] FCA 599; (1993) 32 ALD 155
(1993) 47 FCR 437

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
BEAZLEY J

CATCHWORDS

Administrative law - Rules of natural justice and breach thereof - whether Tribunal denied applicant procedural fairness - failure to put matters concerning applicant's credit to her in cross-examination - respondent's disavowal that credit in issue - application of the rule in Browne v Dunn in Tribunal proceedings - whether breach of rules of procedural fairness remedied by opportunity to recall applicant - whether error not affecting determination - whether Tribunal entitled to rely on its observations of witness

Evidence - Witnesses - whether Tribunal entitled to rely on its observations of witness - principles

Administrative Appeals Tribunal Act 1975, s33

Browne v Dunn (1894) 6 R 67

Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219

Allied Pastoral Holdings Pty. Limited v Commissioner of Taxation (1983) 1 NSWLR 1

Payless Superbarn (NSW) Pty. Limited v O'Gara (1990) 19 NSWLR 551

Trade Practices Commission v Mobil Oil Australia Limited [1984] FCA 238; (1984) 3 FCR 168

Dolan v Australian and Overseas Telecommunications Corporation [1993] FCA 202; 114 ALR 231

Minagall v Ayres (1966) SASR 151

Jobst v Inglis (1986) 41 SASR 399

Angaston and District Hospital v Thamm (1987) 47 SASR 177

Government Insurance Office of New South Wales v Bailey (1922) 27 NSWLR 304

Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141

HEARING

SYDNEY, 26 October 1993
9:12:1993

Counsel for the Applicant: Mr M McAuley

Solicitors for the Applicant: Plowman and Thom

Counsel for the Respondent: Mr G Elliott

Solicitors for the Respondent: Australian Government Solicitor

ORDER

THE COURT ORDERS THAT:
1. The decision of the Tribunal be set aside.

2. The matter be remitted to the Tribunal for redetermination according to law with or without further evidence.

3. The respondent pay the applicant's costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

BEAZLEY J This is an appeal from a decision of the Administrative Appeals Tribunal (the Tribunal) dated 27 July 1992 in which the Tribunal affirmed the decision of Comcare made 3 May 1991, affirming an earlier decision to cease paying compensation to the applicant from 20 July 1989, on the basis that, from that date, she was not suffering from any continuing incapacity arising from a work related injury which occurred on 26 November 1985.

Background
2. At the time of the accident, the applicant was employed by the respondent as a Hospital Assistant in the kitchen at the Repatriation General Hospital at Concord. She sustained an injury to her left shoulder on 26 November 1985 whilst stacking chairs during the course of her duties at the hospital. She reported the incident, but continued working until 17 December 1985 when she saw a doctor at the hospital, who prescribed medication for her condition and directed that she return to work. The applicant did so and worked until 9 January 1986, when she again went off work due to her injuries and remained off work until April 1986. She returned to work for a few days and was off again until September 1986, when she resumed on light duties. The light duties which the applicant was required to perform were part of a rehabilitation program designed for her. Notwithstanding this, the applicant only remained at her tasks for minimal periods of time. It should be noted however that the duties involved in the rehabilitation program required the applicant to use her left arm, which was the injured arm. The applicant worked intermittently until December 1991, when she failed to return to her normal duties and was subsequently dismissed.

3. The applicant applied for compensation on 15 January 1986 and Comcare accepted liability in respect of "painful left wrist, arm, and neck" on 25 January 1986. The applicant continued to receive compensation payments until a delegate of Comcare determined on 26 July 1989 that on and from 20 July 1989 she was no longer entitled to compensation. The applicant sought review of the delegate's decision, however on 3 May 1991 the determination ceasing liability was affirmed. The applicant sought a review of this decision by the Administrative Appeals Tribunal. The Tribunal's decision is the subject of this appeal.

4. The sole ground of appeal is that the applicant was not afforded procedural fairness by the Tribunal. The applicant submitted that this failure is revealed by contrasting the manner in which the matter proceeded before the Tribunal with pars45 and 46 of the Tribunal's Reasons for Decision in which the Tribunal stated its findings as follows:

45. The Tribunal considers that the weight of medical evidence
indicates that any incapacity arising from the accident on
26 November 1985 no longer prevents the applicant from
undertaking her former duties and indeed the special light
duties arranged for her were well within her capabilities.
Some of the doctors expressed views that to some extent the
symptoms complained of by the applicant were not consistent
with the nature of her injury and were exaggerated or
contrived.
46. The Tribunal had the benefit of observing the applicant over
most of the first day of the hearing and considered she did
not appear to be distressed in any way during her extended
period in the witness box. Her movements appeared to be
unrestricted when she was asked to indicate particular
movements and to demonstrate the areas of her body which
gave concern. When momentarily distracted in giving an
explanation, she showed apparently normal movement. Her
activity on the day of the hearing strongly suggested that
she was quite capable of performing the duties set out in
the rehabilitation program at least, but she was apparently
unprepared to do that despite the assistance which was to be
provided by the rehabilitation staff and particularly the
Occupational Therapist."

5. Several bases were identified as demonstrating that there had been a breach of the requirement of procedural fairness, which may be summarised broadly as the fabrication and exaggeration of symptoms; credit; failure to put matters to the respondent in cross-examination and the reliance by the Tribunal on its own observations. The first three of these matters raise the question of whether, and if so, the extent to which the principle in Browne v Dunn (1894) 6 R 67 applies in proceedings before the Tribunal. The last raises the question of whether, in what circumstances and under what conditions the Tribunal is permitted to rely upon its own observations.

Application of the principle in Browne v Dunn
Failure to cross-examine the applicant
6. Counsel for the applicant submitted that three matters were remarkable about the cross-examination of the applicant: first, the legal representative for the respondent had failed to put to the applicant that her symptoms were not to be accepted; secondly, nowhere in the cross-examination was there any question which brought to the applicant's mind that it was to be alleged that the rehabilitation program was within her capacity and that she "didn't give it a go"; and thirdly, no question was put to the respondent to the effect that her symptoms were exaggerated or contrived. It was submitted that if the respondent was intending to rely on the converse of any of these propositions, and in particular to call evidence in relation to them, the respondent should have questioned the applicant about them. The particular matters which it is alleged should have been put to the applicant before the respondent was entitled to call evidence in relation to them were: first, Dr. McGill's evidence that the applicant's attitude to work was such that he thought it unlikely she would return to work, that she was negative when she described her work and that when asked whether she thought she was likely to be able to do some of the activities she did not say that she could not; secondly, Ms. Mills' evidence that she considered that the rehabilitation program was reasonable, however, the applicant had indicated that she did not wish to undertake the program; and finally, Dr Clarke's evidence that the applicant should be able to gradually return to work on selected duties but that the applicant had thought she would not be able to perform the duties in question; that there was an inconsistency in the applicant's response to examination and her responses and conduct generally during the course of consultation; her opinion that the applicant was not distressed in any particular way; and her evidence that the applicant had said to her on 11 July 1991 that "I'm not prepared to attempt the tasks".

Respondent's disavowal that credit in issue
7. Next, counsel for the applicant submitted that an examination of a number of passages in the transcript demonstrates that, during the course of the hearing, the applicant's legal representatives were led to believe that there was no allegation that the applicant was feigning her symptoms or that credit was in issue in the proceedings. It is alleged this first occurred during the course of the respondent's examination of Dr. McGill, rheumatologist. Dr. McGill was asked to contrast the case of a patient whom he had examined for Comcare and whose experience of pain and disablement he accepted as genuine, although he could not find any organic basis for it, with the case of the applicant, in respect of whom he did not make such a finding. Dr. McGill stated:

"In Mrs. Marelic's case there was in my mind clear evidence of
functional behaviour not explained by a source of pain."

8. After this answer was given, counsel for the applicant submitted to the Tribunal that this evidence should be rejected, as the applicant had not been cross-examined on the matter. There then followed a lengthy exchange between Dr. Grimes, the presiding Member, Mr. McAuley who was then appearing for the applicant, and Mr. Viquerat who was appearing for the respondent, which included the following:

"Mr. McAuley:..what my friend is trying to do is to adduce
evidence that (the applicant's) presentation on examination to Dr.
McGill was not genuine. If that's what he's seeking to do he's
got to put it to the applicant fair and square..."
...Dr. Grimes:.."I put it to you, we'll hear Mr. Viquerat in a
minute, but I put it to you that you are suggesting that the
doctor or Mr. Viquerat said - are suggesting that Mrs. Marelic in
her responses during the medical examination was not genuine.
Now, I haven't heard that put to the doctor. We've heard about
functional overlays but that's nothing to do with being genuine or
not."
Mr. McAuley: "Well, that's the suggestion."
Dr. Grimes: "Well, I don't believe that is the suggestion. Mr.
Viquerat?"
Mr. Viquerat: No it's certainly not..."
Mr. Viquerat: "Well, the doctor has made no claims in his report
that there was any faking of symptoms, all he's saying is that the
symptoms, the reported symptoms were not consistent with the
clinical findings. In using the term functional perhaps he's
introducing a new element, I don't know. It's not a question I
ask, I'm only simply seeking his view as to the consistency
between the symptoms and the clinical findings and his opinion as
a medical expert on the consistency of that relationship. Any
suggestion that we're trying to introduce some new element is
nonsense because the reports have been filed, they've been
available to everyone and (Mrs. Marelic) is on oath to tell the
truth, she has told us that she had a genuine weakness in the
arms. I mean she's had an opportunity to be questioned on that
aspect and if the tribunal wishes certainly we can recall Mrs.
Marelic and I'll question her on the matter."
Dr. Grimes: "I can indicate we are here in the shoes of the
decision maker. We're not bound by the rules of evidence, as you
say Mr. McAuley, but we are bound by the rules of natural justice.
We have got to consider the material before us which was
introduced without objection by you. Now, you're suggesting I
think that there is a suggestion in the evidence so far that Mrs.
Marelic was faking her responses during the examination by the
doctor. Now, even if that was so we could adduce evidence to
that, but I haven't heard that said, I haven't heard it suggested
by the representative of the respondent, nor have I heard it said
by the doctor, therefore I can't see that Browne v Dunn is
involved in this case at all." (emphasis added)

9. The next occasion when it is alleged that the respondent expressly disavowed that the applicant's credit was in issue was during the course of the evidence of Ms. Mills, the rehabilitation case manager at Concord Hospital. Mr. Jokovic, who was then appearing for the applicant, objected to a question by Dr. Grimes as to whether Ms. Mills came to any conclusion about the applicant's response to the program. The following discussion occurred between counsel and Dr. Grimes:

Mr. Jokovic: "This case is very much a case on credit, despite
what is being said and if it's going to be fought as a case on
credit it should have been put squarely to my client. It hasn't
and despite and (sic) protestations - and I am trying to object as
little as possible - she is entitled to have it put to her all the
issues as to whether she wanted to work, whether she could work
and that hasn't been put. So to draw evidence from any witnesses,
doctors, nurses, as to issues of credit or as to issues of
willingness to work, is just simply not appropriate and it's a
denial of natural justice whether it comes from my friend or
anybody else."
Dr. Grimes: "It's not a question I'm asking about, her
willingness to work. I'm asking - we have a witness who has
professional qualifications and I'm not asking her any more than
was asked the other day about whether Mrs. Marelic was feigning.
I don't consider - I'm not asking questions of that type at all.
I'm asking - we have a professional who is dealing in a
professional way with an application (sic) who is your client, and
I understand that. Now, she was having difficulties, I gather.
(Ms) Mills was having difficulties perhaps getting across and that
may be well the reason. I just want to know whether (Ms) Mills in
her professional capacity felt that she was able to achieve what
she was (sic) wanted to achieve, was able to perform her duties as
she wanted to perform them without making any judgment at all ---"
Mr. Jokovic: "Well, I withdraw my objection in that regard."
Dr. Grimes: "---about the credit or otherwise of your applicant
and I'm not certainly making any judgment on the credit of your
applicant from her answer, okay?"

10. Finally, counsel for the applicant referred to the submission by the respondent's legal representative that he did not allege that the applicant's symptoms were fabricated. Counsel for the applicant submitted that if the questions of credit and fabrication of symptoms were in issue there was an obligation to say so and for the respondent's legal representative to cross-examine the applicant in accordance with the rule in Browne v Dunn.

11. The conduct of proceedings before the Tribunal is governed by s33 of the Administrative Appeals Tribunal Act 1975. Essentially, the procedure is within the Tribunal's discretion. It is not bound by the rules of evidence, but may inform itself on any matter in such manner as it thinks appropriate. Proceedings are required to be conducted with as little formality and technicality and with as much expedition as the requirements of the Act and Regulations, any other enactment and a proper consideration of the matters before it, permit. Counsel for the applicant submitted that this statutory scheme did not preclude the operation of the rule in Browne v Dunn that a party should not be permitted to introduce evidence about a matter intended to be relied upon, which has not first been put to the opposing party. He submitted that as the rule is one of procedural fairness, a failure to apply it constituted a breach of natural justice.

12. In Allied Pastoral Holdings Pty. Limited v Commissioner of Taxation (1983) 1 NSWLR 1, Hunt J examined the rule in Browne v Dunn and concluded (at 26) that:

"..unless notice has already clearly been given of the
cross-examiner's intention to rely upon such matters, it is necessary to
put to an opponent's witness in cross-examination the nature of
the case upon which it is proposed to rely in contradiction of his
evidence, particularly where that case relies upon inferences to
be drawn from other evidence in the proceedings."

13. His Honour referred to the rule as operating "in order to achieve fairness to witnesses and a fair trial between the parties" (at 26C). See also Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 per Glass JA at 225 and Mahoney JA at 235-236; Payless Superbarn (NSW) Pty. Limited v O'Gara (1990) 19 NSWLR 551 per Clarke JA at 556; R v Birks (1990) 19 NSWLR 677 per Gleeson CJ at 688. The mere fact that the rule in Browne v Dunn has been violated does not mean, necessarily, that there should be a new trial. Whether or not there should be a new trial depends upon the nature of the infraction, the remedy being within the discretion of the trial judge: see Seymour's case, per Glass JA, with whom Reynolds JA agreed; and Payless Superbarn (NSW) Pty. Limited v O'Gara per Clarke JA (at 556).

14. The rule in Browne v Dunn is a procedural rule grounded in fairness, and its application must depend upon the circumstances of each case. In Trade Practices Commission v Mobil Oil Australia Limited [1984] FCA 238; (1984) 3 FCR 168 Toohey J held (at 181) that in circumstances where the respondent's legal advisers were fully alerted before and during the hearing to the allegations made against the company and the evidence upon which the Commission relied, it was unnecessary to consider the operation of the rule in Browne v Dunn. A similar approach was adopted by Spender J in Dolan v Australian and Overseas Telecommunications Corporation [1993] FCA 202; 114 ALR 231 where his Honour held (at 236) that in the circumstances of that case, the failure to put the contents of a video to the medical witnesses produced no unfairness to the applicant. It is not necessary to determine whether the rule, as such, applies to proceedings before the Tribunal. Indeed I consider that to be the wrong question to determine. The Tribunal is bound to observe the rules of procedural fairness and in that regard, the rule in Browne v Dunn, with the qualifications to which I have referred, is a convenient statement of the content of that aspect of procedural fairness which requires that a party be given adequate opportunity to meet the case which is put against her or him.

15. Counsel for the respondent submitted that the rule in Browne v Dunn, being a rule of fairness, had been observed by the respondent. He said that the question of the applicant's credit and in particular the question of whether the applicant was feigning symptoms was always an issue before the Tribunal. This, he argued, was clear from the evidence in the respondent's medical reports, which were served prior to the hearing, that there was no organic basis for the applicant's complaints. Counsel for the respondent also contended that the exchanges between counsel for the applicant, Dr. Grimes and the legal representative for the respondent, to which I have referred, clearly showed that the applicant's legal representatives were aware that credit was in issue. He submitted, therefore, that the principle in Browne v Dunn in particular, or the rules of procedural fairness in general, did not require the respondent to cross-examine the applicant about these matters before it was entitled to call evidence in relation to them. In any event, counsel submitted that on two occasions the Tribunal provided counsel for the applicant with the opportunity to recall the applicant.

16. The question of the applicant's disabilities and their disabling effects had been clearly canvassed in the respondent's medical reports. In my opinion, it was clear from this evidence that it was part of the respondent's case that there was no organic basis for the applicant's disabilities, that she had a functional overlay, that she was able to perform a wide range of activities and that she was able to perform the work in the rehabilitation program. It must follow that, to the extent that the applicant asserted the contrary, her credit was in issue. The passages from the transcript of the hearing before the Tribunal to which I have referred, reveal that counsel for the applicant clearly recognised this to be the case. The applicant could have dealt with these issues in her evidence-in-chief. Accordingly, there was no breach of the rules of procedural fairness in the Tribunal permitting the respondent to call evidence in relation to the applicant's symptoms and her ability to work, without first requiring that these matters be put to the applicant in cross-examination.

17. However, the same cannot be said in relation to the question of whether the applicant was feigning or exaggerating her symptoms. The medical reports did not expressly state that the applicant was feigning or exaggerating her symptoms. Rather, as I have said, the evidence was that there was no organic basis for her symptoms, and that her responses on examination were indicative of functional behaviour. Dr. McGill described the meaning of "functional" in his evidence as follows:

"It is difficult to distinguish between malingering and other
abnormal signs for which there is no organic lesion present and
functional overlay avoids stating that the patient is a malingerer
versus having abnormal functions, for which there is no organic
lesion apparent."

18. The applicant was not cross-examined as to whether she was feigning or exaggerating her symptoms. Further, both in submissions during the hearing in respect of evidence and during final address, counsel for the respondent expressly disavowed that any such allegation was being made. Although the applicant was in a position to call psychological evidence, which may have dealt with the basis of the applicant's functional behaviour referred to in the respondent's medical reports, it was reasonable not to do so, given the respondent's stated position on this issue. Notwithstanding this, counsel for the respondent submitted that there was no denial of procedural fairness as the proper reading of par45 of the Tribunal's Reasons is that the Tribunal found against the applicant on the basis of the medical evidence and not on the basis of a finding that the applicant had feigned or exaggerated her symptoms. I do not agree with this submission. The first sentence of par45 cannot be read in isolation from the balance of the reasons generally, or from the second sentence of par45 and in par46, which touch upon the credit of the applicant, and in particular upon an aspect of credit which was not raised in the medical reports and had been expressly disavowed by the respondent. In my opinion, it cannot safely be assumed that the Tribunal's finding in the first sentence of par45 was made unaffected by a consideration of the matters raised in the second sentence of par45 and in par46. I am of the opinion that in these circumstances, the applicant was denied procedural fairness.

19. Next, and independently of the issue of credit, counsel for the applicant submitted that the issue of the applicant's performance of the rehabilitation program was never raised with the applicant in cross-examination. Counsel for the respondent submitted that the applicant had clear notice that this was in issue from the "respondent's pre-hearing statement" which alleged that the applicant's failure to perform the program was due to her lack of co-operation, and not to any alleged disability, and also from other documents served prior to the hearing. In particular, counsel drew attention to Ms. Mill's report in respect of an assessment on 20 February 1990, where it was noted that the client had worked for approximately two hours with a few rest breaks, but had stated she was unable to continue; Dr. Clarkes' report that the applicant declined to try the rehabilitation program; and evidence that the Rehabilitation Section at Concord Hospital had refused to accept a medical certificate from Dr. Strokon certifying that the applicant was unfit for work for a period of three months. In my opinion, this material clearly demonstrates that the applicant was on notice of the rehabilitation issue. Accordingly, in the circumstances, there was no requirement of procedural fairness that the issue be put to the applicant in cross-examination.

20. Whether breach of rules of procedural fairness remedied by opportunity to recall applicant Counsel for the respondent submitted that even if the Tribunal had erred in allowing the respondent to adduce the medical evidence to which objection was taken without first cross-examining the applicant, any resulting breach of the rules of procedural fairness was remedied by the Tribunal affording the applicant an opportunity to give further evidence. He submitted that such opportunity had been given by the Tribunal on both the first and second day of the hearing. Counsel for the applicant says that no such opportunity was afforded to the applicant on the first day. He conceded that the opportunity of recalling the applicant had been given on the second day of the hearing, but submitted that that opportunity did not redress the denial of natural justice which had been visited upon the applicant, as, by that stage, tactical decisions had been made in respect of the running of the case, including the medical and psychological evidence which should be called on behalf of the applicant.

21. The transcript of the Tribunal proceedings reveals that on the first day Dr. Grimes said to counsel:

"...well we could recall the applicant and put to her every
finding in every clinic (sic) examination in every document which
has been admitted in evidence to this Tribunal without objection
from you before we ask any of those medical examiners to justify
their findings. Now, is that what you're putting to us?"

22. Mr. McAuley stated that he was not making such a submission, but was putting a much more precise point, namely that if the respondent was seeking to adduce evidence that the applicant's presentation to Dr. McGill was not genuine, that matter had to be put to the applicant "fair and square". In my opinion, it is not clear from this passage that the Tribunal was extending an invitation to recall the applicant. However, the matter was never tested as counsel for the applicant did not press the issue. On the second day, Mr. Jokovic, counsel for the applicant, objected to evidence being led from Dr Clarke as to inconsistencies in the applicant's responses on clinical examination. There then ensued the following exchange between Dr. Grimes and Mr. Jokovic:

Mr Jokovic: ...but the applicant hasn't had the opportunity -
hasn't had that put to her and hasn't had the opportunity to
explain any other possible reason for the suggestion.
Dr Grimes: Well we'll recall her to do that, if you like. Mr
McAuley refused that but if you want to recall (her) to explain
all these items ---

That invitation was refused. The exchange continued:

Mr. Jokovic: I don't wish to recall (her). The
cross-examination is over. The case has proceeded on the basis that
nothing like this was put to her, we're not calling evidence in
rebuttal, we had no intention of calling evidence in rebuttal and
we've proceeded on the basis this is a medical issue. We're
going beyond that.
Dr. Grimes: We're not going beyond that. If you have accepted
these medical reports, without objection, to be put forward as
exhibits, and you're now suggesting that nothing in these medical
reports can be...put to any witness unless they've been put
previously to the applicant in specific terms, and I'm suggesting
you're making a nonsense of this tribunal's proceedings.
Mr. Jokovic: Well, I'm certainly not in..
Dr. Grimes: And that's the ruling.

23. Mr. Viquerat was then requested to proceed with the examination of Dr. Clarke. The last comment by Dr. Grimes raises the question of whether this invitation to recall the applicant did provide a real opportunity to the applicant to deal with the material raised in the respondent's evidence. It may be that the last portion of the passage just quoted indicates that there was, in truth, no invitation. However, Dr. Grimes' comment was at the end of the exchange, the invitation, when first extended, was not qualified, and Mr. McAuley accepted, in his submissions to this court, that on the second day counsel for the applicant was provided with an opportunity to recall the applicant. Further, by the time Dr. Grimes made the comment, counsel for the applicant had taken and announced to the Tribunal a firm decision not to recall the applicant. Thus, whilst the passage to which I have referred presents some difficulties, I am of the opinion that at that point in the proceedings the Tribunal was prepared to permit the applicant to be recalled, even if it displayed some irritation at the prospect.

24. The question remains, however, whether this remedied the breaches of procedural fairness of which complaint is made. I have found that there was no breach of procedural fairness in relation to the issue of the applicant's credit generally or her failure to perform the rehabilitation program. If I am wrong in relation to these matters, then I am of the opinion that the opportunity afforded to the applicant on the second day of the hearing to give further evidence overcame any breach relating to those issues. The refusal of counsel to take up that opportunity was dictated by tactical considerations. However, such considerations cannot determine whether there has been a breach of the rules of procedural fairness, particularly in the Tribunal where the traditional practices of adversarial litigation are not necessarily applied.

25. However, the position is different in relation to the allegation that the applicant was feigning or exaggerating her symptoms. It is to be remembered that counsel for the respondent at all times submitted he was not alleging there was fabrication or exaggeration. There would therefore have been no reason for counsel for the applicant to have dealt with these allegations had he recalled the applicant. In my opinion therefore, the opportunity given to recall the applicant on the second day (and for that matter, on the first day, if there was such opportunity) did not overcome the failure to afford to the applicant procedural fairness in relation to this issue.

Error not affecting the ultimate decision
26. Alternatively, it was submitted that even if the Tribunal erred in law in not affording the applicant the opportunity to deal with the material raised in the second sentence of par45, the decision should not be set aside as the issues as to credit and the fabrication or exaggeration of symptoms were not central to the determination. It was argued therefore that the error could not affect the ultimate decision: Waterscheid Australia Pty. Limited v Collector of Customs (1988) 7 AAR 555 at 566; Conway v Repatriation Commission (1988) 9 AAR 397 at 409; Cavell v Repatriation Commission (1988) 9 AAR 534 at 539. This was an elaboration of the submission as to the true basis of the Tribunal's reasons to which I have already referred.

27. The Tribunal identified the issue before it as being "whether the applicant continued to suffer any incapacity for work after 26 July 1989 resulting from an incident on 26 November 1985." Counsel for the respondent submitted that the Tribunal had determined this issue entirely on the medical evidence, in respect of which the respondent's evidence was consistent that there was no incapacity for work, whereas the medical evidence of the applicant was uncertain as to that matter or deferred to what the applicant said as to symptoms and disabilities. He submitted, therefore, that the essential finding of the Tribunal as to the matter in issue was to be found in the first sentence of par45. Counsel for the respondent acknowledged that there was difficulty with the second sentence of par45 which referred to the views of some of the doctors that the applicant was fabricating her symptoms. However, he contended that that statement was unnecessary for the purposes of the Tribunal's determination on the crucial question of incapacity and was therefore surplusage and could be ignored. It was submitted that regardless of whether or not the Tribunal accepted the doctors' assertions as recorded in this sentence, the Tribunal had determined the matter on the medical evidence, as was clear from the first sentence of par45. Thus, it was submitted, the second sentence did not represent part of the Tribunal's reasoning process at all, but was merely a statement of what was to be found in some of the medical evidence, which the Tribunal found unnecessary to resolve having regard to the conclusion reached in the first sentence of par45. The submission in this form requires an examination of the medical evidence.

28. Dr. Hodgkinson, who gave evidence on behalf of the applicant, identified the applicant's pain source as being at the level of C3/4 and C4/5 in the cervical spine and stated that this condition was responsible for her on-going pain. In his final report, he stated that "(on) the balance of probabilities, this patient continues to suffer from the effects of an injury on the 26th November, 1985 when lifting chairs." However, the Tribunal noted that in a prior report, Dr. Hodgkinson had considered that the cause of the cervical discogenic pain had been initiated by an earlier motor vehicle accident unconnected with the applicant's employment and that it was "aggravated over a period with her work." Dr. Teychenne, neurologist, who also gave evidence on behalf of the applicant, provided a number of reports in which he found that a discogram showed a prolapse of the disc at C3/4 and C4/5. He considered that the results of a somatosensory response test were consistent with compression of the cervical nerve roots as a result of cervical disc prolapse. In a later report, he said that he suspected a cervical disc radiculopathy but was unable to find evidence of severe cervical nerve recompression. Counsel for the respondent submitted that whilst Dr. Teychenne's evidence supported an organic basis for the applicant's complaints of pain, he did not express an opinion as to the level of the applicant's incapacity, that being the relevant issue before the Tribunal. Finally, as to the evidence of Dr. Strokon, who was the applicant's treating doctor, the Tribunal noted that:

"in his certificate of 12 December 1991 he does not express a
medical opinion as to (the applicant's) fitness or otherwise for
any work but merely states "..if her symptoms are as disabling as
she would indicate...". In such circumstances, it is not
surprising that the applicant's employer refused to accept such
certificate and directed that the employee return to work."

29. The respondent's medical witnesses included Drs. Bornstein, McGill and Clarke. Dr. Bornstein, orthopaedic surgeon, found "that there was no objective evidence of any disability which would prevent the applicant carrying out full normal duties" and that "he was unable to find any disability at all." He stated that he thought there could be psychological factors affecting the applicant, but stated that he was not qualified to comment on them. Dr. Bornstein did not attribute any particular importance to a finding of a disc bulge on a CT scan. He said it was consistent with the aging process and did not necessarily cause pain. Dr. McGill was of the opinion that the applicant "was physically fit for her former employment and that she should be reintroduced into the work force gradually." Dr. Clarke, an occupational medical officer at the Repatriation Hospital, gave evidence that a physical examination on an occasion when the applicant refused to perform the duties specified in the rehabilitation program, was unremarkable and that the "program (was) well within her capacities."

30. In my opinion, it cannot be said that the Tribunal's determination was based solely upon its finding as to the medical evidence, and there is nothing to indicate that the second sentence of par45 was an unimportant part of the Tribunal's reasons. As I have already said, the first sentence of par45 should not be read in isolation from the Reasons as a whole and in particular from the second sentence and par46. There would be no reason for the Tribunal to make any reference, let alone the somewhat detailed and interrelated reference it did, to the matters of the applicant's credit, including whether she was feigning or exaggerating her symptoms, unless they were relevant matters.

Tribunal's reliance on its own observations
31. In par46 of its Reasons the Tribunal referred to its observations of the applicant in support of its finding that "Her activity on the day of the hearing strongly suggested that she was quite capable of performing the duties set out in the rehabilitation program at least, but she was apparently unprepared to do that..."

32. Counsel for the respondent submitted that the applicant's performance of the rehabilitation program was not the issue which the Tribunal was required to determine. The issue before it was whether the applicant was incapacitated for her employment. Thus, it was submitted the Tribunal's reliance on its observations related to a matter not central to the Tribunal's determination, and therefore, even if it erred in law in doing so, such error would not vitiate the decision. It was also submitted that there was nothing inherently secretive or unknown to the applicant about the observations which were made by the Tribunal of the applicant in the witness box and counsel for the applicant himself relied upon the applicant's behaviour and demeanour in the witness box in his final submissions. Accordingly, it was legitimate for the Tribunal to rely upon its own observations in that regard, even if they were different from those urged upon it by counsel. Finally, it was submitted that the observations were used by the Tribunal to fortify its determination of the medical issue, made in the first sentence of par45 and were not critical to the decision. In those circumstances, even if there was error the decision should not be disturbed: See Waterscheid; Conway; Cavell.

33. A Court or Tribunal is entitled to rely upon its observations of a witness and to have regard to demeanour in coming to its determination. Whether, and if so, the circumstances in which it is entitled to do so, was considered by the Full Court of South Australia in Minagall v Ayres (1966) SASR 151 where Napier CJ (with whom Travers J agreed) said at 156:

"It seems to us that it is a matter of what we should regard as
"fair play and commonsense". The condition upon which a judge is
at liberty to take notice of what he has seen for himself is that
the parties should know or be informed of what he has noticed,
and have an opportunity of answering or dealing with it."

34. Minagall was applied by the Full Court of South Australia in Jobst v Inglis (1986) 41 SASR 399. In that case the trial judge had raised with counsel his observations of the plaintiff in court, which he stated were inconsistent with those he had observed in a film which was shown in the course of the proceedings. However, the trial judge did not draw attention to that matter until during counsel's addresses. The Full Court found that in the circumstances of that case, notwithstanding that the trial judge had called the attention of counsel to the fact and substance of his observations, the plaintiff was entitled to a new trial. As Johnston J said at 417:

"In my view it is inevitable that a judge will make observations
of a party he observes in the court when that party is not
actually giving evidence. Generally speaking such observations
will be of no real moment, often perhaps confirming impressions
already formed from seeing the person give evidence, perhaps
adding slightly to the overall impression. I do not think that a
judge is called upon to draw to the attention of counsel every
single observation that he makes."
....
Here his Honour used his observations in respect of what he
plainly regards as a very important finding, namely that the
plaintiff had exaggerated her symptoms. I think if he was going
to use his observations for this purpose, he was bound to draw
the attention of counsel to his observations at a time when it
was open to the party to bring forward such evidence as might be
desired in explanation of it. I think that his indication to
counsel was too late."

35. In Angaston and District Hospital v Thamm (1987) 47 SASR 177 King CJ stated (at 178-179) that the rule expounded by Napier CJ in Minagall v Ayres:

"..is not to be regarded as absolute in the sense that it must be
applied rigidly to every observation which a judge might make of
a party during the course of a trial outside the witness-box.
Something will depend, no doubt, on the circumstances of the
particular case and upon the significance of the particular
observations. It is clear, however, that where the judge makes
observations of the actions or demeanour of a party, which actions
and demeanour are not observable by counsel, and makes use of
those observations in a way which has a significant influence upon
his decision of the case, he is required in justice, before making
such use of those observations, to make those observations and the
possibility of his using them in the course of his judgment known
to counsel at a stage of the hearing at which counsel still has
an opportunity of dealing with them in a proper and effective way."

36. The issue also arose in Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304, where the trial judge referred in his judgment to observations he had made of the plaintiff during the course of the hearing, including whilst she sat at the back of the court and as she was entering and leaving the witness box. His Honour based his determination, in part, on these observations. On appeal, it was contended that the findings based upon the trial judge's observations were founded on material outside the evidence, and thus not permissible. Kirby P approved the statements of principle in Minagall and Jobst and then referred to Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, where the High Court held that the use of undisclosed matter in the conduct of a trial vitiated the judgment under challenge, subject only to the qualification that the judgment would not be vitiated where the information could not "possibly have made any difference ". Kirby P held that the undisclosed observations of the trial judge amounted to a breach of the requirements of procedural fairness. His Honour stated at 317 that the concepts of fair play and commonsense required that the defendant

"..at least be notified of what was exercising the trial judge's
mind before judgment was pronounced relying on those
considerations."

37. Clarke JA, with whom Hope A-JA agreed, agreed with Kirby P as to the principles to be applied, but differed in the result. His Honour noted that the case was one where the trial judge had been required to assess damages, where there was no conflict of evidence and no relevant issue of credit or fact. The plaintiff had given evidence that because of her injuries she had to "watch how I sit". That evidence remained undisputed. She had not been cross-examined upon the basis that she was not telling the truth in any particular respect, or that any of her evidence was unreliable or inaccurate. Rather the cross-examination had been directed at clarification only. The case had proceeded on the basis of the tender of medical reports in support of the plaintiff's case. The defendant had not adduced any medical evidence, and none of the plaintiff's doctors were required to attend for cross examination. His Honour said at 324:

"It was, in every sense, a case in which the trial judge was
required to evaluate the worth of the injuries and disabilities
about which the respondent had given evidence and which could not
be regarded as being in issue."

38. Clarke JA considered, therefore, that the trial judge's observations as to how the plaintiff had sat in court merely confirmed the evidence he had heard and that his observations "could not have had a significant influence upon his assessment of the damages...(or) that it had any influence on his judgment at all". Applying the commonsense rule referred to in the South Australian authorities, his Honour held that it could not be concluded that a miscarriage of justice had occurred. His Honour did note, however, that it was unfortunate the trial Judge had based a conclusion, which was in any event supported by the evidence, upon an observation of the respondent prior to trial and in so doing, had not observed the fundamental rule that a case should be determined upon evidence which all parties had an opportunity to question.

39. In the present case, the Tribunal did not, at any time during the course of the proceedings, advert to the observations it made and the use to which it proposed to put those observations until it referred to them in par46 of its Reasons. It therefore breached the obligation to determine the matter on the basis of the evidence before it. Having regard to what I have already said as to the interrelationship between pars45 and 46, this is not a case where it can be said that despite the breach of this obligation the reliance on these observations could not "possibly have made any difference": see Stead (supra). Accordingly, I am of the opinion that for this reason also, the decision of the Tribunal should be set aside.

40. The orders which I make are:

1. That the decision of the Tribunal be set aside.
2. That the matter be remitted to the Tribunal for
redetermination according to law with or without further
evidence.
3. The respondent to pay the applicant's costs.