Department of Defence v Jodette Margaret Fox [1997] FCA 3 (14 January 1997)

CATCHWORDS

ADMINISTRATIVE LAW - Appeal from Administrative Appeals Tribunal - Safety, Rehabilitation and Compensation Act - whether respondent given appropriate rehabilitation program - question of fact or question of law - whether Tribunal misinterpreted legislation - meaning of "shall have regard to" - whether Tribunal determined rehabilitation based on incorrect assumption.

Safety, Rehabilitation and Compensation Act 1988 (Cth)

Administrative Appeals Tribunal Act 1985 (Cth)

Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321

The Australian Gas Light Co v The Valuer General (1940) 40 SR (NSW) 126

Waterford v The Commonwealth [1987] HCA 25; (1987) 163 CLR 54

Re BHP Petroleum Pty Ltd and Others and Minister for Resources (1993) 30 ALD 173

Re Hunt; Ex parte Sean Investments Pty Ltd [1979] HCA 32; (1979) 53 ALJR 552

The Queen v Toohey: Ex Parte Meneling Station Pty Ltd [1982] HCA 69; (1982) 158 CLR 327

No. SG 13 of 1996

DEPARTMENT OF DEFENCE Applicant

- and -

JODETTE MARGARET FOX Respondent

O'Loughlin J

Adelaide

14 January 1997

IN THE FEDERAL COURT OF AUSTRALIA )

)

SOUTH AUSTRALIA DISTRICT REGISTRY ) No SG 13 of 1996

)

GENERAL DIVISION )

B E T W E E N:

DEPARTMENT OF DEFENCE

Applicant

- and -

JODETTE MARGARET FOX

Respondent

Coram: O'Loughlin J

Place: Adelaide

Date: 14 January 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The appeal be dismissed with costs.

2. The applicant is to pay the respondent's costs of and incidental to the appeal, to be taxed in default of agreement.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA )

)

SOUTH AUSTRALIA DISTRICT REGISTRY ) No SG 13 of 1996

)

GENERAL DIVISION )

B E T W E E N:

DEPARTMENT OF DEFENCE

Applicant

- and -

JODETTE MARGARET FOX

Respondent

Coram: O'Loughlin J

Place: Adelaide

Date: 14 January 1997

REASONS FOR JUDGMENT

This appeal, on behalf of an employer, from a decision of the Administrative Appeals Tribunal ("the AAT") questions whether, in the circumstances of this case, a tertiary education is the appropriate rehabilitation program for the injured worker.

The respondent in these proceedings is Jodette Margaret Fox ("Ms Fox"). In 1991 she was accepted into the Royal Military College, Duntroon ("RMC") to undertake an eighteen month officer training course. She was then eighteen years of age. On 7 February 1992, whilst competing in an obstacle course, she sustained a serious injury to her left foot, which ultimately led to her discharge on medical grounds. But for this injury, she would probably have graduated as a Lieutenant in the Army in December 1992. Had she graduated, she would have been awarded an Associate Diploma in Personnel Management.

The applicant, the Department of Defence ("the Department"), has not questioned its primary obligation to compensate Ms Fox for her injury, it has challenged the nature and extent of an appropriate rehabilitation program for her. The Department recognised that it has an obligation - no doubt because Ms Fox is now unable to continue with her career in the Army - to make arrangements for the provision of a rehabilitation program for her: sub-s 37(1) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the SRC Act"). But the parties have failed to agree on the appropriate program. The Department considered that training for clerical duties would be sufficient to meet its obligations; Ms Fox, however, wanted to undertake a three-year university course, majoring in Psychology.

Assessments of Ms Fox by Mr Hallett and Ms Sheppard, psychologists with Sheppard Consulting Psychologists, and by Dr Kutlaca, a psychiatrist, all favoured Ms Fox. The assessments that were made by Mr Hallett and Ms Sheppard in January and July 1994 respectively were contained in written reports as required by s 36 of the SRC Act. The provisions of that section that are presently relevant are as follows:-

"s 36(1) Where an employee suffers an injury resulting in an incapacity for work or an impairment, the rehabilitation authority may at any time, and shall on the written request of the employee, arrange for the assessment of the employee's capability of undertaking a rehabilitation program.

(2) ...

(3) The rehabilitation authority may require the employee to undergo an examination by the person or panel of persons making the assessment.

(4) ...

(5) ...

(6) ...

(7) ...

(8) Where an examination is carried out, the person or persons who carried out the examination shall give to the rehabilitation authority a written assessment of the employee's capability of undertaking a rehabilitation program, specifying, where appropriate, the kind of program which he or she is capable of undertaking and containing any other information relating to the provision of a rehabilitation program for the employee that the rehabilitation authority may require."

Mr Hallett said in his report that Ms Fox's results were "...consistent with a persons capacity to undertake

training at a higher lever, whether that be either TAFE or University standard". In response to a specific enquiry from an officer of the Department, Mr Hallett was recorded by the officer as saying that Ms Fox "can do clerical although it would not suit her personality to a "T"".

Notwithstanding Mr Hallett's report and recommendation, a determination was made on 14 February 1994 to the effect that Ms Fox should undertake a "12 week rehabilitation program involving job- seeking in the clerical employment sphere". Ms Fox requested a reconsideration of that determination and that led to the Department referring her to Ms Sheppard for further assessment. Ms Sheppard advised that Ms Fox had the capacity to undertake tertiary education and listed various career options that included Psychology. The Department, however, held firm. It considered that "clerical/secretarial work is still suitable and, departmentally, the preferred option". On 26 July 1994, the Department wrote to Ms Fox affirming its earlier determination of 14 February 1994. In that letter the Department said that:-

"The aim of rehabilitation is to restore the injured individual, who is incapacitated for work, to their fullest physical, psychological, social and vocational capabilities."

The author of the letter explained that tertiary studies were generally considered as part of rehabilitation programs where:

"(a) the individual was undertaking a tertiary study program prior to the injury; or

(b) after all other rehabilitation programs have been considered."

The author then stated that Ms Fox had not commenced tertiary studies at the date of her injury. That statement is not reconcilable with the Statement of Agreed Facts which contains an entry that "An Associate Diploma (in Personnel Management) is described as a tertiary qualification in the SATAC Guide (1995) ...". The AAT also disagreed with the author's conclusion; it found that the training that Ms Fox "was undertaking at RMC was equivalent to tertiary education".

Dr Kutlaca examined Ms Fox later in 1995 for the purpose of her appeal to the AAT. He said of her that she functioned at "the superior intellectual level" and that it was therefore "inappropriate and beneath her abilities to set clerical duties as an end point for rehabilitation purposes".

After a lengthy review of Ms Fox's personal history, and aided by the reports to which reference has already been made, the AAT came to the conclusion that "tertiary studies should form part of the approved rehabilitation program ...". Its reasoning in coming to that conclusion is set out in par 28 of its Reasons for Decision:-

"28. Although the applicant's studies at RMC were at an Associate Diploma level, one must look at the level of qualifications that an Officer graduating from RMC would possess, in particular the qualifications which graduates would possess in Personnel Management. There was considerable evidence that the applicant is a woman of strong drive, initiative and ambition, and it is likely that her career in the armed forces would have progressed well. The Tribunal accepts that she was receiving unique training and would have entered a unique profession. One must look to see what the maximum level of achievement would be for someone graduating from RMC, and look at what the Army would have made the applicant. Hence obtaining a Degree qualification would be the best approximation that the applicant could be given by way of civilian training and rehabilitation."

The Department has appealed against the decision of the AAT. Its right of appeal, which is found in s 44 of the Administrative Appeals Tribunal Act 1985 (Cth), is limited to a question of law. In its Notice of Appeal, the Department originally nominated eight errors of law. But two of those were abandoned and another five can be bracketed together and identified as one ground of appeal. By this means it can be said that there are two fundamental points to be considered. The first is the claim that the AAT misdirected itself "in its interpretation of Part III" of the SRC Act; that is the Part that is entitled "Rehabilitation". The second is that, in respect of five different subject matters, the Tribunal erred in law in reaching conclusions for which there were no bases on the evidence or which were irrelevant. Those five subject matters are identified from the following passages from the Reasons for the Decision of the AAT:-

"[T]he delegate should have taken a more humane and personalised approach in considering appropriate rehabilitation for [Ms Fox]."

"[T]he attitude of the Department of Defence and Comcare seems to be one of wanting to get [Ms Fox] back into the workforce as quickly as possible so that they can cease payments and not one of suitably rehabilitating [Ms Fox]".

"[The Department] breached its duty to assist [Ms Fox] in finding suitable employment".

"[T]he training that [Ms Fox] was undertaking at RMC was equivalent to tertiary education."

"[A]llowing her to enrol in a Bachelor Degree course at a university would at least enable her to obtain the same level of intellectual achievement that she would have obtained at RMC"."

I will deal first with these five complaints for in my opinion they are without substance and can be disposed of quickly.

As to the first two of them, it may or may not be accurate to describe the conduct of the Department in terms that it should have taken a "more humane and personalised approach" or that it only wanted to get Ms Fox "back into the workforce as quickly as possible". Whether there was evidence to support these findings - or if they be inferences - whether they were inferences that could be drawn from facts found or agreed would be questions of law: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 355 per Mason J. But assuming, without deciding, that they were errors of law, they would not be of such significance as would justify this Court's intervention. They were not relevant to the AAT's decision.

The Department had decided that a clerical course and a clerical future was the appropriate rehabilitation for Ms Fox. That was the decision that was under attack in the proceedings before the AAT. The AAT was not concerned, as a matter of law, with the reasons why the Department had come to its decision because the AAT was considering the matter afresh on the evidence that was presented before it. If the Department were correct in opting for a clerical course it would not matter that it was not "humane" or that it wanted Ms Fox "back in the workforce as quickly as possible". If, on the other hand, the Department was wrong in coming to that decision it matters not that it may have been inappropriately criticised by the AAT.

I turn now to the third of the complaints. When the AAT stated that the Department had breached its duty to assist Ms Fox in finding suitable employment it was making a statement that was wholly consistent with its primary finding that Ms Fox was entitled to benefit from tertiary studies. The challenged statement would only be wrong if the Department's decision requiring her to undertake a clerical course was correct. The Department had assisted her in that area but it did not assist her with respect to her wishes to study Psychology.

The fourth complaint related to the statement that the RMC course "was equivalent to tertiary education". In my opinion, that was a finding that was open to the AAT as a result of the Statement of Agreed Facts. A finding of fact by a tribunal of fact cannot be disturbed "if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its findings, and there is evidence capable of supporting its inferences": The Australian Gas Light Co v The Valuer-General (1940) 40 SR (NSW) 126 at 138 per Jordan CJ.

There remains the last of the five complaints: that allowing Ms Fox to enrol in a "Bachelor Degree course at a university would at least enable her to obtain the same level of intellectual achievement that she would have obtained at RMC". I have no doubt that there would be many who would challenge the accuracy of that statement. One is entitled to question how an eighteen month course at a Military institution would have the same intellectual level as a three year full time University course. But that question calls for a subjective assessment based upon a proper analysis of the competing courses. It is a question of fact: not a question of law. As such it is not reviewable in these proceedings. Even if it be a wrong finding of fact it does not amount to an error of law: Waterford v The Commonwealth of Australia [1987] HCA 25; (1987) 163 CLR 54 at 77 per Brennan J.

I turn then to the remaining issue, which counsel for the Department identified as the "key issue" in the proceeding: that is, whether the AAT had misdirected itself in relation to the interpretation of Part III of the SRC Act. That part, entitled "Rehabilitation", contains (inter alia) provisions for an assessment to be made of an employee's capability of undertaking a rehabilitation program (s 36) and provisions enabling a rehabilitation authority to make a determination that an injured employee should undertake a rehabilitation program (s 37). Section 40 provides that where an employee is undertaking a rehabilitation program, his or her employee is to take "all reasonable steps to provide the employee with suitable employment or to assist the employee to find such employment". Having regard to the manner in which the appeal was prosecuted it is relevant to set out the provisions of sub-s 37(3) of the SRC Act.

"37(3) In making a determination under subsection (1), a rehabilitation authority shall have regard to:

(a) any written assessment given under subsection 36(8);

(b) any reduction in the future liability to pay compensation if the program is undertaken;

(c) the cost of the program;

(d) any improvement in the employee's opportunity to be employed after completing the program;

(e) the likely psychological effect on the employee of not providing the program;

(f) the employee's attitude to the program;

(g) the relative merits of any alternative and appropriate rehabilitation program; and

(h) any other relevant matter."

In its Notice of Appeal, in support of its claim that the AAT had misdirected itself in relation to the proper interpretation of Part III, the Department asserted that:-

"The Tribunal applied tests in relation to sub-section 37(3) of the Act namely introducing a test whereby it referred to the Respondent not having "adequate regard" and/or "sufficient regard" and asserting the Respondent paid, "insufficient regard" to the matters referred to in the sub-section.

In relation to sub-section 37(3)(f) of the Act the Tribunal erred in its interpretation of the said sub-section by making a finding that, "the delegate ignored statements by the Applicant that clerical work was not challenging enough" and "that she wished to obtain employment which would have afforded her the same satisfaction and stimulation as a career as an officer in the Army"."

I have some difficulty in understanding the first of these assertions as sub-s 37(3) requires that a rehabilitation authority "shall have regard to" the matters nominated in pars (a) to (h) of that sub- section. If, therefore, the authority did not have "adequate" or "sufficient" regard to those matters it would, in my opinion, fail in the performance of its statutory obligation.

The expression "shall have regard to", which is quite often found in statutory instruments, will always take its meaning from the context in which it appears. Thus the matters to which a decision maker "shall have regard" might be exhaustively listed (Re BHP Petroleum Pty Ltd and Others and Minister for Resources (1993) 30 ALD 173 at 180) or the relevant provisions might be "so generally expressed that it is not possible to say that he is confined to these ... considerations". (Re Hunt; Ex parte Sean Investments Pty Ltd [1979] HCA 32; (1979) 53 ALJR 552 at 554 per Mason J). But whether the listed subject matters are or are not exhaustive, they are matters to which regard must be had by the rehabilitation authority and it is essential, to adapt the words of Gibbs CJ in The Queen v Toohey: Ex Parte Meneling Station Pty Ltd [1982] HCA 69; (1982) 158 CLR 327 at 333, "to give weight to them as a fundamental element" in making a determination. In my opinion it follows that there would be a failure to "have regard" to nominated matters if the regard was not "adequate" or not "sufficient". The rehabilitation authority would not comply with its statutory obligation if it merely had "token" regard or "nominal" regard to those matters. In my opinion, the AAT did not apply a wrong test in its interpretation of sub-s 37(3).

The remaining ground of appeal, that dealing with par 37(3)(f) of the SRC Act (Ms Fox's attitude to the clerical rehabilitation program) was substantially extended during the course of oral submissions by counsel for the Department so as to challenge a reference in the AAT's reasons to Ms Fox's wishes concerning her tertiary education. The passage in the reasons that was the subject of the attack was contained in par 24:-

"24 The Tribunal finds that when the applicant entered the Army to undertake the eighteen month RMC course she did so with the intention of becoming an Officer at the earliest possible opportunity. The Tribunal found the applicant to be credible and a witness of integrity. She gave evidence that her primary aim was to be an Officer. Her second goal was to obtain civilian tertiary qualifications once she had succeeded in becoming an Officer. When deciding to join the Army as an Officer the applicant was offered two choices, namely enter either the Australian Defence Force Academy, which offered a degree course and required a number of years to complete, or the RMC course, which required only eighteen months of training and was specifically designed for Officers. The applicant chose to undertake the shorter eighteen month course with good reason. She grew up with an Army background and was eager to work her way up through the ranks. Her goal was to obtain civilian degree qualifications once she had become an Officer so she would not lose time in moving up through the ranks. Her studies at RMC would have provided her with the following qualifications and experience:

(a) she would have obtained academic qualifications, namely an Associate Diploma in Personnel Management, which in later years would be followed up with further tertiary qualifications.

(b) she would have gained practical experience in Personnel Management, namely skills in leadership and first hand experience in commanding personnel."

(Emphasis added)

The Department submitted that the reference to her "second goal" and to her evidence that she wanted to obtain civilian tertiary qualifications, was incorrectly used by the AAT to conclude that her rehabilitation program should extend to her obtaining an ordinary degree qualification. In support of this argument, counsel for the Department submitted that in considering the subject of rehabilitation, regard should be had to the circumstances of the injured worker at the time of the injury; it would not normally be appropriate to look at secondary or future goals. I have no difficulty in accepting that submission.

Counsel also made it clear that the Department acknowledged that the width of the definition of "rehabilitation program" in s 4 of the SRC Act and its reference to "vocational training" could, in appropriate circumstances, extend to a tertiary education. The Department's complaint was that Ms Fox's circumstances at the time of her injury did not justify a tertiary education; it complained that the AAT went too far and granted her assistance to do a tertiary course which did not have any nexus with her pre-injury circumstances. The submission concluded with the proposition that the AAT compounded its error by having regard to her secondary goal to obtain civilian tertiary qualifications once she had successfully completed her RMC course.

In my opinion, there are two reasons why this argument cannot succeed. First, there were unchallenged findings of fact that Ms Fox was of superior ability and that a clerical course would be an inadequate program for a person such as her. In terms of par 37(3)(f) the rehabilitation authority (and the AAT on appeal) were required to have regard to her adverse attitude to such a program. I can see nothing wrong - in fact, I consider that the AAT was correct in finding that "the delegate ignored statements by (Ms Fox) that clerical work was not challenging enough" and "that she wished to obtain employment which would have afforded her the same satisfaction and stimulation as a career as an Officer in the Army". These findings established, at the least, that the Department was wrong in fixing upon a clerical course as the appropriate rehabilitation program. It should have found something at a higher level.

The second reason why, in my opinion, this argument must fail is because it has misunderstood the reference by the AAT to her secondary goal of obtaining civilian tertiary qualifications. The argument incorrectly assumed that the AAT used that piece of evidence as its base for finding in her favour. But that is not the case. That statement was merely a general observation about her future expectations. It is quite clear from the contents of par 25 of its Reasons that the AAT aligned a tertiary course as a rehabilitation program to her RMC course and not to her secondary goal. It said:-

"There is no way that any course of study could provide her with the same opportunities, but allowing her to enrol in a Bachelor Degree course at a university would at least enable her to obtain the same level of intellectual achievement that she would have obtained at RMC. The applicant gave evidence that she was unable to find any university course which is equivalent to the Associate Diploma which she would have obtained from RMC, and this is because no university course can provide one with the practical experience of commanding personnel that this offered by the RMC course."

I note, with some interest, that the AAT was apparently prepared to rely on Ms Fox's evidence that she was unable to find any equivalent university course; but the Department did not seek to lead contradictory evidence. Once more this is a finding which I classify as a finding of fact that is not reviewable by this Court.

In summary, the Department has been unable to convince me that there has been an error of law in the reasoning of the AAT that would justify the intervention of this Court. As a result the appeal must be dismissed with costs.

I certify that this and the preceding pages are a true copy of the Reasons for Judgment of the Honourable Justice O'Loughlin

Associate:

Dated:

Counsel for the Applicant : Mr M McInnis

Solicitor for the Applicant : Australian Government Solicitor

Counsel for the Respondent : Mr C McCarthy

Solicitor for the Respondent : Finlaysons

Date of Hearing : 17 December 1996