Repatriation Commission v Wedekind [2000] FCA 649 (17 May 2000)

Last Updated: 17 May 2000

FEDERAL COURT OF AUSTRALIA

Repatriation Commission v Wedekind [2000] FCA 649

VETERANS AFFAIRS - War-caused injury or disease - appeal from decision of Administrative Appeals Tribunal - whether veteran's condition of pterygium was war-caused - Statement of Principles requires showing of service-related inability to obtain appropriate clinical management - whether evidence to support causal link between failure to diagnose condition and eligible war service - whether failure to make findings on material questions of fact

Administrative Appeals Tribunal Act 1975, s 44(1)

Veterans' Entitlements Act 1986, s 9, s 13, s 119, s 120, s 196B(3)

Repatriation Commission v Smith (1987) 15 FCR 327 referred

Repatriation Commission v Deledio (1998) 83 FCR 82 applied

Deledio v Repatriation Commission (1997) 25 AAR 396 referred

Brew v Repatriation Commission [1999] FCA 1246 referred

Commonwealth v Johnston (1980) 31 ALR 445 discussed

Ogden Industries Pty Ltd v Lucas [1967] HCA 30; (1967) 116 CLR 537 referred

Johnston v Commonwealth [1982] HCA 54; (1982) 150 CLR 331 discussed

Australian Telecommunications Commission v Barker (1990) 12 AAR 490 referred

Dornan v Riordan (1990) 24 FCR 564 referred

Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500 referred

Commonwealth v Pharmacy Guild of Australia (1989) 91 ALR 65 referred

REPATRIATION COMMISSION v STANLEY WILLIAM WEDEKIND

VG 208 of 1998

KENNY J

MELBOURNE

17 MAY 2000

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 208 OF 1998

BETWEEN:	REPATRIATION COMMISSION Applicant
AND:	STANLEY WILLIAM WEDEKIND Respondent
JUDGE:	KENNY J
DATE OF ORDER:	17 MAY 2000
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. That part of the decision of the Administrative Appeals Tribunal made on 23 April 1998 that set aside the decision made by the Commission and substituted a decision that:

(a) the condition of pterygium suffered by the respondent was war-caused within the meaning of s 9 of the Veterans' Entitlements Act 1986; and

(b) the Commonwealth was liable to pay a pension to the respondent for his incapacity from that condition from 16 April 1996

be set aside.

3. The decision of the applicant made on 28 August 1996 be affirmed.

4. There be no order as to costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 208 OF 1998

BETWEEN:	REPATRIATION COMMISSION Applicant
AND:	STANLEY WILLIAM WEDEKIND Respondent

JUDGE:	KENNY J
DATE:	17 MAY 2000
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1 The applicant, the Repatriation Commission ("the Commission"), appeals, pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 ("the AAT Act"), from part of the decision of the Administrative Appeals Tribunal ("the AAT") given on 23 April 1998. In particular, the Commission appeals from that part of the AAT's decision that set aside a decision made by the Commission and substituted a decision that: (a) the condition of pterygium suffered by the respondent, Mr Stanley Wedekind, was war-caused within the meaning of s 9 of the Veterans' Entitlements Act 1986 ("the VE Act"); and (b) the Commonwealth was liable to pay a pension to Mr Wedekind for his incapacity from that condition from 16 April 1996.

FACTUAL BACKGROUND

2 The facts, as found by the AAT, are as follows. Mr Wedekind is a veteran who, for the purposes of the VE Act, rendered eligible (but not operational) war service. During his war service in Northern Australia, from January 1942 to March 1944, Mr Wedekind's eyes became inflamed and "would puff-up and practically close up". Mr Wedekind was hospitalised eight times with chronic eye inflammation. On each occasion, he remained an in-patient for 10 to 14 days and was treated with antibiotics. A medical report in February 1944, shortly before Mr Wedekind was discharged, recorded "moderate hyperemia of lids and conjunctivie particularly right" but noted that both eyes were clear and that no further treatment was required. Almost immediately after his discharge, however, Mr Wedekind again had problems with his eyes. In 1950, he was told that he had "fatty pterygium". In about 1991, he was operated on for this condition. The operation involved the removal of fibrous tissue which had grown onto the cornea of the left eye.

3 At the hearing before the AAT, Dr W E Gillies, opthalmologist, gave evidence that pterygium is a vascular membrane, which grows onto the front of the eye on the clear cornea. It is "like a local malignant condition" which grows or invades across the front of the eye until it threatens vision. Dr Gillies expressed the opinion, in a report dated 8 September 1997, that Mr Wedekind's pterygium arose in association with his repeated bouts of ocular inflammation during his war service. Dr Gillies gave evidence that Mr Wedekind's pingueculum "was most likely a precursor of the pterygium" and that it was "very likely that the pterygium started to appear, started to occur at the time of his period of service". Dr Gillies added, in evidence, that "it would be difficult under the conditions of hospitalisation to be sure that there was not a pterygium present and it was only a pingueculum". He stated that the diagnosis of fatty pterygium in 1950 made it even more likely that pterygium was present while Mr Wedekind was on service. Dr Gillies attributed the failure to diagnose the pingueculum and the pterygium during Mr Wedekind's war service to the limited diagnostic technology then available.

THE APPEAL

4 The Commission's appeal raises three errors of law on the part of the AAT. They are:

(1) that the AAT failed to test the connection between the pterygium and Mr Wedekind's war service by reference to the Statement of Principles concerning pterygium, No 254 of 1995 ("the SoP"), as s 120B(3) of the VE Act required;

(2) that the material before the AAT was incapable of supporting the conclusion, required to support the AAT's decision, that the requirements of the SoP were made out; and

(3) that the AAT failed to make findings of fact and provide reasons for several critical aspects of the matter before it.

LEGISLATIVE FRAMEWORK

5 Pursuant to s 13 of the VE Act, the Commonwealth is liable to pay a pension by way of compensation to a veteran who has become incapacitated from a war-caused disease: see s 13(1). The concept of war-caused disease is the subject of s 9. In particular, s 9(1)(e)(i) provides that a disease contracted by a veteran shall be taken to be a war-caused disease if the disease was contracted while the veteran was rendering eligible war service and the disease was contributed to in a material degree by, or was aggravated by, any eligible war service rendered by the veteran after contracting the disease.

6 Section 120 provides for the standard of proof to be applied in determining a claim for a pension and, in particular, s 120(4) governs the case of a veteran who, like Mr Wedekind, did not render operational service. Pursuant to s 120(4), the AAT was required to decide whether Mr Wedekind's pterygium was war-caused "to its reasonable satisfaction", applying the civil standard of proof: see Repatriation Commission v Smith (1987) 15 FCR 327 at 335. The effect of s 120(6) is that neither the Commission nor Mr Wedekind bore any onus of proving any matter that is, or might be, relevant to the determination of the claim. In this connection, it is as well to bear in mind s 119 and, in particular, s 119(1)(h) which requires account to be taken of:

any difficulties that, for any reason, lie in the way of ascertaining the existence of any fact, matter, cause or circumstance, including any reason attributable to: (i) the effects of the passage of time, including the effect of the passage of time on the availability of witnesses; and (ii) the absence of, or a deficiency in, relevant official records, including an absence or deficiency resulting from the fact that an occurrence that happened during the service of a veteran ... was not reported to the appropriate authorities.

Because Mr Wedekind's claim was lodged after 1 June 1994 (i.e., on 16 July 1996), s 120B(3) of the VE Act applies. By virtue of s 120B(3), the AAT could be reasonably satisfied the pterygium contracted by Mr Wedekind was war-caused only if: (a) the material before the AAT raised a connection between the pterygium and the war service rendered by Mr Wedekind; and (b) there was in force a Statement of Principles ("SoP") under s 196B(3) upholding the contention that the pterygium was, on the balance of probabilities, connected with that service. (As counsel for the Commission pointed out, the last three lines of s 120B(3) can rationally relate only to par (b), not par (a).)

7 SoPs are made by the Repatriation Medical Authority ("the Authority") under s 196B of the VE Act in respect of, relevantly, particular kinds of disease. Where a SoP is made under s 196B(3), it must set out the factors that must exist, and which of those factors must be related to service, before it can be said, on the balance of probabilities, that a disease of a particular kind is connected with the circumstances of the service. Subsection 196B(3) provides as follows:

If the Authority is of the view that on the sound medical-scientific evidence available it is more probable than not that a particular kind of injury, disease or death can be related to:

(a) eligible war service (other than operational service) rendered by veterans; or

(b) defence service (other than hazardous service) rendered by members of the Forces;

the Authority must determine a Statement of Principles in respect of that kind of injury, disease or death setting out:

(c) the factors that must exist; and

(d) which of those factors must be related to service rendered by a person;

before it can be said that, on the balance of probabilities, an injury, disease or death of that kind is connected with the circumstances of that service.

The expression "related to service" is elaborated in s 196B(14). In substance, the subsection replicates the causal relationships found in ss 8(1) and 9(1) of the VE Act.

8 In Repatriation Commission v Deledio (1998) 83 FCR 82 at 95-96, the Full Court of this Court expressly agreed with Heerey J, the primary judge in that case, that:

[I]t is necessary to repeat that the SoP has no function in relation to the proof or disproof (under s 120(1)) of the particular facts of a veteran's case. The SoPs function is limited to prescribing a medical-scientific standard with which a hypothesis must be consistent - so that the SoP can `uphold' the hypothesis. ... the SoP is a subset of proved (Bushell [v Repatriation Commission [1992] HCA 47; (1992) 175 CLR 408] at 414) or known (Byrnes [v Repatriation Commission [1993] HCA 51; (1993) 177 CLR 564] at 571) scientific fact. Where a SoP is applicable, it is a statute-backed declaration of what is proved or known scientific fact.

See Deledio v Repatriation Commission (1997) 25 AAR 396 at 411-412. The Full Court went on, at 96, to agree further with his Honour's observations in the following passage at 25 AAR 412:

Therefore when s 196B(2) says a factor `must ... exist' and `must be related to service', it is not interfering with the functions of s 120(1) and (3). On the contrary, the [Authority] is to identify the minimum factors which can connect the particular kind of injury etc with the circumstances of the particular kind of service (operational etc). If there is more than one factor the [Authority] is to determine which of them (or whether all of them) must be related to the circumstances of the service (see above). The particular claim then has to fit the template laid down in the SoP. The Byrnes methodology is applied. Do the facts raised by the claimant give rise to a reasonable hypothesis? Proof of facts is not in issue at this point. The hypothesis will not be reasonable if it is:

(1) contrary to proved or known scientific facts,

(2) obviously fanciful, impossible, incredible, absurd, ridiculous, not tenable, too remote or too tenuous; or

(3) (since 1994) inconsistent with (not upheld by) an applicable SoP.

If the hypothesis is reasonable the claim will succeed unless:

(4) one or more facts necessary to support it are disproved beyond reasonable doubt; or

(5) the truth of a fact inconsistent with the hypothesis is proved beyond reasonable doubt.

At no stage is there an onus of proof on the claimant. If one of the disputed facts happens also to be a component of an SoP then the Commission must disprove that fact beyond reasonable doubt, just like any other relevant fact.

In other words, where a claim relates to eligible (non-operational) war service, a relevant SoP provides for the connection that must be established between the disease relied upon and war service, to the reasonable satisfaction of the decision-maker.

9 The Authority made a Statement of Principles concerning pterygium on 21 June 1995. Clause 1 states that "the factor that must exist before it can be said that, on the balance of probabilities, pterygium or death from pterygium is connected with the circumstances of ... service, is: (a) inability to obtain appropriate clinical management for the pterygium".

10 Clauses 2 and 3 of that SoP are as follows:

2. Subject to clause 3 (below) the factor set out in paragraph 1(a) must be related to any service rendered by a person.

3. The factor set out in paragraph 1(a) applies only where:

(a) the person's pterygium developed before a period, or part of a period, of service to which the factor is related; and

(b) the relationship suggested between the pterygium and the particular service of a person is a relationship set out in paragraph 8(1)(e), 9(1)(e) or 70(5)(d) of the Act.

By virtue of s 120B(3), Mr Wedekind's claim for a pension in respect of his pterygium would fail if this SoP did not uphold the contention that his pterygium was, on the balance of probabilities, connected with his eligible war service: see Brew v Repatriation Commission [1999] FCA 1246 at [18] per Merkel J (with whom Mansfield J agreed).

11 The SoP does, however, limit the occasions when a claimant can successful rely on the inability to obtain appropriate clinical management factor. As we have seen, cl 2 requires that, subject to cl 3, the factor be "related to any service" rendered by, in this case, Mr Wedekind. (The nature of the relevant relationship is described in s 196B(14) of the VE Act.) In other words, there must be something in the nature of a causal relationship between the inability factor and war service. The effect of cl 3 of the SoP is that the inability factor "applies" only where the disease (here, the pterygium) "developed before a period, or part of a period, of service to which the factor is related" (cl 3(a)), and where the relationship between the pterygium and Mr Wedekind's particular service is a relationship set out, relevantly, in s 9(1)(e) of the VE Act. For the reasons set out below, in the circumstances of Mr Wedekind's case, the only relationship that could exist is that described in s 9(1)(e)(i). He was required to show that his pterygium was contracted while he was rendering non-operational eligible war service and that it was contributed to in a material degree by, or was aggravated by, that service. (I discuss below Mr Wedekind's contention that s 9(1)(e)(ii) was also available to him.)

12 In summary, before the AAT could be reasonably satisfied that Mr Wedekind's pterygium was war-caused, it had to be satisfied that: (a) Mr Wedekind was unable to obtain appropriate clinical management for his pterygium during his war service, after having contracted the pterygium; (b) subject to (c), his inability to obtain appropriate clinical management was related to his war service; and (c) the pterygium was contracted while he was rendering war service and was contributed to in a material degree by, or was aggravated by, his war service. In the course of determining whether it was satisfied of these matters, the Tribunal needed to identify the approximate date upon which Mr Wedekind contracted his pterygium; the appropriate form of clinical management; whether Mr Wedekind was unable to obtain that form of clinical management; whether that inability related to his service; whether the pterygium was contracted during his service; and whether it was contributed to in a material degree by, or was aggravated by, Mr Wedekind's particular service.

THE AAT'S DECISION

13 The Tribunal had before it the documents lodged pursuant to s 37 of the AAT Act, Dr Gillies' report and viva voce evidence, and the testimony of Mr Wedekind. Save for one matter, it correctly referred to the relevant law. The Tribunal's findings are set out at pars 36 to 40 of its reasons.

14 The Tribunal found, so it seems, that Mr Wedekind's pterygium was contracted while he was rendering eligible war service. This finding is implicit in pars 37 to 39 of its reasons. I accept, as counsel for the Commission submitted, that the reference to "paragraph 9(1)(e)(ii)" in par 39 of the reasons is to be understood as a reference to s 9(1)(e)(i). I reject the respondent's submission to the contrary. At best, so far as Mr Wedekind is concerned, the effect of Dr Gillies' evidence was that the pterygium was contracted during Mr Wedekind's service, a fact that would attract s 9(1)(e)(i), providing the pterygium "did not arise out of that service". There was no evidence before the Tribunal that the pterygium was contracted "before the commencement of the period, or last period, of eligible war service rendered by" Mr Wedekind, as s 9(1)(e)(ii) would require. Nothing ultimately turns on this mistaken reference, however. In stating, in par 39, that it was appropriately satisfied that the relationship between the pterygium and Mr Wedekind's service was "a relationship set out in paragraph 9(1)(e)(ii)", I accept, as the Commission submitted, that the Tribunal had in mind a finding that the pterygium was aggravated by his service at a time after Mr Wedekind had contracted the pterygium. The Tribunal made no finding, however, about how the aggravation was sustained.

15 Finally, the Tribunal found that the treatment that Mr Wedekind received for inflammation of the eyes and conjunctivitis (eye drops at the RAP and antibiotics when hospitalised) could not be said to be "appropriate clinical management" for pterygium. The Tribunal made no findings, however, as to what would have been appropriate clinical management for pterygium, whether Mr Wedekind was unable to obtain that management, and whether such inability was related to his war service.

GROUNDS OF APPEAL

Failure to apply the SoP concerning pterygium: Grounds (a) and (b)

16 The Commission's primary contention was that the material before the Tribunal was incapable of supporting the findings that the Tribunal was required to make to reach a decision in favour of Mr Wedekind. As we have seen, the Tribunal did not expressly make the essential findings that would have permitted it to conclude, on the balance of probabilities, that the pterygium was connected with the circumstances of Mr Wedekind's war service. It did not make a finding about "appropriate clinical management for pterygium". Nor did it make a finding that Mr Wedekind was unable to obtain that form of clinical management during his war service. Nor did it make any finding about the relationship between his pterygium and his war service. Was there any material before the Tribunal capable of supporting the findings with regard to these matters that the Tribunal was obliged to make to reach the decision that it did?

17 Dr Gillies' evidence was that, at the time of Mr Wedekind's war service, the appropriate form of clinical management was "local decongestion drops" and wearing sunglasses when exposed to strong light and glare. (The standard of clinical management at the time of service is, I accept, the relevant standard: see Brew at [29], endorsing the approach of the primary judge (Sundberg J) at [1999] FCA 494 at [9].) His evidence was consistent with Mr Wedekind's own evidence concerning the treatment (eye drops) that he received in about 1950 when his physician first diagnosed the pterygium. The evidence before the Tribunal provided only one basis, however, for a finding that Mr Wedekind was unable to obtain that clinical management for his pterygium during his war service. As we have seen, there was evidence that Mr Wedekind was hospitalised eight times, for ten to fourteen days on each occasion, and given "mainly antibiotics and drops in the eye". There was also evidence that he received eye drops on other occasions. There is nothing in the evidence that would support the proposition that Mr Wedekind would have been unable to obtain eye drops and protective eye wear had his condition been diagnosed during his war service. Had the Tribunal found that Mr Wedekind had been unable to obtain appropriate clinical management, the sole basis for such a finding would have been that the condition was not diagnosed at that time. For present purposes, I assume (without deciding) that the Tribunal may have reasonably been satisfied that there was an "inability", within the meaning of cl 1(a) of the SoP, to obtain appropriate clinical management owing to a relevant diagnostic failure: cf Brew at [26-30].

18 Dr Gillies' evidence was that this failure to diagnose was due to the limitations of the diagnostic technology available during the war years. His evidence was that the pterygium (and Mr Wedekind's pingueculum) would have been difficult to detect at the time of his service because at that time, according to Dr Gillies, "our methods of examination were greatly inferior to what we have now". He went on to say that "it would be asking a lot" for the physician who had examined Mr Wedekind in 1944 to have diagnosed the pterygium.

19 There was, however, no evidence before the Tribunal that the diagnostic limitations to which Dr Gillies referred were "related" to Mr Wedekind's war service. On the contrary, Dr Gillies' evidence was that the technology was simply not available then, or indeed, ten years later when he commenced practice. Accordingly, I accept, as the Commission submitted, that the evidence before the Tribunal was incapable of supporting a finding, or findings, that the Tribunal was obliged to make in reaching its decision, by virtue of s 120B(3) and the SoP. For this reason alone, I would dismiss the appeal.

20 Counsel for Mr Wedekind relied on Dr Gillies' evidence, especially his report of 8 September 1997, to make up for the lack of express findings in the Tribunal's reasons. Even if these reasons can be read as adopting Dr Gillies' report in its entirety (which I doubt), the evidentiary deficiency remains. Plainly enough, the opinion given in evidence by Dr Gillies that Mr Wedekind's pterygium was connected with his war service through solar radiation or irritation with dust was irrelevant to an inquiry as to whether Mr Wedekind had been unable to obtain appropriate clinical management for an existing condition (the cause of which was immaterial) and whether that inability was related to his service. Only if it were satisfied of those facts (amongst the others that the SoP made relevant) would it have been open to the Tribunal to determine that the pterygium was connected with Mr Wedekind's war service. This was because, by virtue of s 120B(3) and the SoP, it was a pre-condition to Mr Wedekind's pension entitlement for pterygium that the Tribunal was satisfied of the matters stipulated in the SoP.

21 The Commission also submitted that there was no evidence before the Tribunal to support a finding that the pterygium was contributed to in a material degree by, or was aggravated by, Mr Wedekind's war service, after he contracted the condition. In this connection, the Commission relied on the reasons for judgment of Brennan and Keely JJ in Commonwealth v Johnston (1980) 31 ALR 445. A question arose in that case as to the meaning of the word "aggravation" in s 29 of the Compensation (Australian Government Employees) Act 1971 (Cth). Brennan J, who, like Keely J, relied on the observations of Windeyer J in Ogden Industries Pty Ltd v Lucas [1967] HCA 30; (1967) 116 CLR 537 at 593-4, stated, at 466:

Although it may be possible to attribute a meaning of growing worse to the term `aggravation' in the abstract, it is not possible to construe aggravation of a disease in s 29 as meaning a growing worse of a disease to which nothing but the natural progress of the disease has contributed. Something else must contribute an increased gravity to the employee's disease, a gravity over and beyond what the natural progress of the disease produces.

Keely J expressed a like view at 470. The decision of the majority of the Full Court in Johnston's Case (Evatt J dissenting) was, as counsel for the Commission properly acknowledged, overturned by the High Court when it held that the failure to diagnose the disease from which Mr Johnston died was an aggravation of the disease within the meaning of s 29 and, as such, was compensable: see Johnston v Commonwealth [1982] HCA 54; (1982) 150 CLR 331. At 338-9, Gibbs CJ, Mason and Wilson JJ observed:

There is some force in the comment of his Honour in Lucas that `aggravation' signifies `making worse' rather than `becoming worse', a comment reflected in the remarks of Brennan J in the Federal Court in the present case. However, the comment has rather more force when applied to the transitive verb `aggravate' than when it is applied to the noun `aggravation', especially when it is used in a passive sense in the expression `suffers an aggravation'. `Aggravation' may mean `An increasing ... in gravity or seriousness' as well as `being increased, in gravity or seriousness'.

...

The concept of aggravation implies a worsening and therefore predicates a starting-point with which the end result is to be compared. The starting-point which the Commonwealth seizes upon in the passage we have cited from the judgment of Brennan J is `the cancer, an autogenous disease, taking its natural and fatal course'. Given that premise, there was no worsening, in the sense of aggravation, in [the appellant's] case. However, we have difficulty in accepting the initial premise in the form stated. The evidence is that if the cancer had been detected in 1970, treatment could have been given which would have been effective in slowing down, if not entirely stopping, the `natural and fatal course' of the disease. The proper projection of the disease, if detected in 1970, as on the finding of the tribunal it should have been, was no longer a disease `taking its natural and fatal course, unimpeded by timely treatment', but a disease capable of effective medical management. If that be chosen as the starting-point for the consideration of the question of aggravation, it becomes clear that the failure to diagnose and treat the cancer resulted in a worsening or aggravation of the condition when compared with the course which, given timely treatment, it should have taken.

Their Honours supported their approach by reference to the object of the statute, observing:

The object of the statute is to provide for the payment of compensation to employees who suffer injury or disease occurring in circumstances connected with their employment by the Commonwealth. ... In this setting it is natural to suppose that Parliament intended that compensation is payable when an employee suffers an increase in the severity of a disease and his employment contributes to that increase in severity, whether the employment so contributes by actually making the disease worse or by delaying medical treatment which would arrest the natural course of the disease. It would scarce conform to the broad policy underlying the statutory provisions to confer an entitlement to compensation in the first case but not in the second.

Referring to the first and second of these passages, the Commission invited me to follow the reasoning of Brennan and Keely JJ in Johnston, and Windeyer J in Lucas, in construing the words "was aggravated by" in s 9(1)(e). The Commission relied, in particular, on the use in that provision of the verb "aggravate", though in its passive voice. I am not persuaded to accept this invitation, more especially because the statutory object of the VE Act is not, so it seems to me, entirely dissimilar from the statutory object referred to by Gibbs CJ, Mason and Wilson JJ in Johnston's Case. Having regard to the conclusion I have already reached on the inadequacy of the evidence, however, it is unnecessary for me to express any definitive view.

Inadequate reasons: Grounds (a) and (c)

22 The Commission's fallback position was that the inadequacy of the Tribunal's reasons for decision itself amounted to an error of law. Having regard to the conclusion I have reached on the Commission's primary submission, it is, strictly speaking, unnecessary for me to deal with this matter. I deal, however, with this secondary submission briefly below.

23 Subsection 43(2) of the AAT Act requires the AAT to give reasons for its decision. Section 43(2B) requires that those reasons include findings on material questions of fact and a reference to the evidence or other material on which those findings were based. A failure on the part of a tribunal, which is bound to state reasons for its decision, to express findings and reasons for decision "adequate for the purpose of enabling a proper understanding of the basis on which a decision has been reached" constitutes an error of law: see Australian Telecommunications Commission v Barker (1990) 12 AAR 490 at 492; Dornan v Riordan (1990) 24 FCR 564; and Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500. To adapt the language of Sheppard J in Commonwealth v Pharmacy Guild of Australia (1989) 91 ALR 65 at 88, the AAT's "statement of bare conclusions without the statement of reasons [exposes] the tribunal to the suggestion that it has not given the matter close enough attention or that it has allowed extraneous matters to cloud its consideration". I accept the Commission's submission that, in this case, the AAT failed to give such reasons for its decision as it was bound by law to give.

24 For the reasons stated, the appeal should be allowed, the Tribunal's decision should be set aside and, in its place, there should be substituted a decision affirming the decision of the Commission.

I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

Associate:

Dated: 17 May 2000

Counsel for the Applicant:	Mr P J Hanks QC
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondent:	Mr D De Marchi
Solicitor for the Respondent:	De Marchi and Associates
Date of Hearing:	13 September 1999
Date of Judgment:	17 May 2000