Advertiser Newspaper Ltd v McAllister - [2010] SASCFC 32

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
ADVERTISER NEWSPAPER LTD v MCALLISTER
[2010] SASCFC 32
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Gray and The Honourable Justice Sulan)
23 September 2010
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - ERROR OF LAW - PARTICULAR CASES INVOLVING ERROR OF LAW - FAILURE TO GIVE REASONS FOR DECISION - ADEQUACY OF REASONS
WORKERS' COMPENSATION - PROCEEDINGS TO OBTAIN COMPENSATION - DETERMINATION OF CLAIMS - APPEALS, JUDICIAL REVIEW AND STATED CASES - QUESTION OF LAW - PARTICULAR CASES
Appeal from Full Bench of Workers Compensation Tribunal - whether Full Bench erred in law by holding that a single member's reasons for decision were inadequate as a matter of law giving rise to a miscarriage of justice - Full Bench erred - single member's reasons adequate - appeal allowed.
Workers Rehabilitation and Compensation Act 1986 (SA) s 30A, s 53, s 67(1), s 86(1), s 86A(2), s 86A(2a), referred to.
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, discussed.
R v Keyte (2000) 78 SASR 68; South Australian Fire & Emergency Services Commission v Workers Compensation Tribunal (2009) 105 SASR 1, considered.

ADVERTISER NEWSPAPER LTD v MCALLISTER
[2010] SASCFC 32
Full Court: Doyle CJ, Gray and Sulan JJ

DOYLE CJ: This appeal raises the question of whether the Full Bench of the Workers Compensation Tribunal erred in law in deciding that a single member of the Tribunal made an error of law when upholding the decision of a compensating authority to reject Mrs McAllister’s claim for weekly payments of compensation. The claim for compensation was made under the Workers Rehabilitation and Compensation Act 1986 (SA) (the Act).
The appellant Advertiser Newspaper Ltd (Advertiser) submits that the Full Bench erred in law by holding that the single member’s reasons for her decision were inadequate as a matter of law, giving rise to a miscarriage of justice.
An appeal lies to the Full Court “on a question of law”: s 86A(2) of the Act. A Judge of this Court has granted permission to appeal: s 86A(2a).
The appeal from the single member to the Full Bench was also limited to “a question of law”: s 86(1) of the Act.
It was common ground before the Full Bench, and on appeal to this Court, that the appeal to the Full Bench and to the Full Court raised a question of law. The question was in each case whether the single member provided reasons for her decision that were adequate as a matter of law.
Decisions on claim for compensation
Mrs McAllister was employed by Advertiser.
She claimed from Advertiser weekly payments of compensation, alleging that she had suffered an adjustment disorder with anxiety and depression which resulted in an incapacity for work.
Advertiser is a self-insured employer, and so exercised the relevant statutory powers in relation to the claim for compensation: s 67(1) of the Act.
Advertiser made a determination in writing under s 53 of the Act rejecting the claim. By its determination Advertiser accepted that Mrs McAllister had “suffered a mental disability comprising an adjustment disorder”. Advertiser also accepted that Mrs McAllister was disabled from working, and that her employment was a substantial cause of the disability.
Because the claim was in respect of a disability consisting of an illness or disorder of the mind, it was governed by s 30A of the Act. That section provides:
30A—Psychiatric disabilities
A disability consisting of an illness or disorder of the mind is compensable if and only if—
(a) the employment was a substantial cause of the disability; and
(b) the disability did not arise wholly or predominantly from—
(i)reasonable action taken in a reasonable manner by the employer to transfer, demote, discipline, counsel, retrench or dismiss the worker; or
(ii)a decision of the employer, based on reasonable grounds, not to award or provide a promotion, transfer, or benefit in connection with the worker's employment; or
(iii)reasonable administrative action taken in a reasonable manner by the employer in connection with the worker's employment; or
(iv)reasonable action taken in a reasonable manner under this Act affecting the worker.
By its determination Advertiser rejected the claim because Mrs McAllister had not established that the disability did not arise wholly or predominantly from reasonable action taken in a reasonable manner by the employer for a purpose referred to in s 30A(b)(i) or (iii).
A single member of the Tribunal upheld that decision: McAllister v Advertiser Newspapers Pty Ltd [2009] SAWCT 20. The single member said:
[73]There was no dispute of consequence as to the diagnosis of Mrs McAllister’s condition. There was some difference of opinion as to the cause of her condition. It was unnecessary for me to make any findings in relation to the medical evidence relating to causation in this matter as a result of my findings in relation to administrative action on the part of the employer.
[74]Mrs McAllister has not established that the condition from which she suffered did not arise predominantly from reasonable administrative action taken in a reasonable manner.
[75]I am satisfied on the evidence before me that Mrs McAllister’s disability arises predominantly from reasonable administrative action taken in a reasonable manner by the ANPL in connection with her employment. Therefore she is not entitled to compensation pursuant to the Act.
[76]The determination of the compensating authority to reject claim (sic) is affirmed.
The Full Bench set aside that decision, finding (by majority) that the single member’s reasons for decision were not adequate.
Facts and previous decisions
Mrs McAllister was employed by Advertiser as an Injury Management Coordinator. She worked four days a week. Her manager was Mr Beaton.
Mrs McAllister said that in the first half of 2007, despite a previously friendly relationship with Mr Beaton, a number of minor incidents between them upset her.
The central incident, as things turned out, occurred on 1 June 2007. In McAllister v Advertiser Newspapers Ltd [2010] SAWCT 11 the majority (Hannon DPJ and Lieschke DP) said:
[8]On 1 June 2007 a discussion took place between the appellant and Mr Beaton which resulted in a substantial deterioration in their relationship. The appellant had arranged to meet Mr Beaton at his office that day to discuss a work issue with him. When she entered his office Mr Beaton was working on a draft of a proposal to restructure the rehabilitation team. The appellant had no prior knowledge of the proposal, but apparently noticed the draft and asked Mr Beaton whether she could be of assistance. It appears that, albeit with some initial hesitation, Mr Beaton agreed to discuss the draft proposal with the appellant despite not having planned to do so at that stage.
[9]The draft proposal contemplated an alteration in the appellant’s role so that she spent more of her injury management time on legal and rehabilitation matters and less on administrative matters. Mr Beaton explained to the appellant that he was proposing this change to allow her to focus on the stronger areas of her performance. He explained that it would result in costs savings for the respondent in that it would reduce the extent of its reliance on external legal and rehabilitation service providers, whilst at the same time the appellant’s workload would be reduced by assigning some of her administrative and case management responsibilities to her administrative assistant, Ms Herrod. Mr Beaton explained that as part of this restructure, he was considering a reduction in the appellant’s working week from four days to three days. This, he said, would release funds to enable Ms Herrod to be appropriately recognised for her extra work, and would allow the appellant to return to three days of work a week and to spend more time with her family.
[10]Mr Beaton did not have authority to implement his proposals without approval from above. The outcome of the discussion with the appellant was inconclusive. Each party retained a different perception of it. Mr Beaton did not form the impression that the appellant was upset by his proposal at the time. The appellant said that she was greatly upset, as she could not understand why her hours would be reduced if her work performance was satisfactory. She also felt that some of the comments made by Mr Beaton in relation to the proposed reduction in her salary were demeaning.
Within a few days of this incident Mr Beaton’s supervisor or manager became aware of the proposal, and declined to approve it. It never proceeded. Nevertheless, for reasons that Mrs McAllister explained in evidence, she became unwell as a result of the incident, and that is what led to the claim. The case proceeded on the basis that this incident and its consequences were the main cause of her disability, and that what happened on the occasion in question constituted “action” or “administrative action” for the purposes of s 30A of the Act. As to that the majority said at [22]-[23]:
[22]The learned Deputy President described the relevant event as a proposal by Mr Beaton “...to cut [the appellant’s] hours and narrow her duties”, and later as “...a discussion about a restructuring of [the appellant’s] work duties and hours”. The learned Deputy President found that whilst the action related to the day to day tasks of the appellant’s employment, it was also linked to action taken by the employer concerning deployment of the activities associated with its business. On this basis she was satisfied that the discussion about the proposal could be characterised as administrative action.
[23]The learned Deputy President characterised the incident in question after consideration of the relevant legal principles. There was no error in her application of those principles to the facts as found. The action on the part of Mr Beaton of preparing a restructuring proposal, and discussing it with the appellant, in the circumstances of this case, is capable of being characterised as administrative action, notwithstanding that the proposal was not implemented subsequently. It could properly be found to involve administrative action even though the proposal, if implemented, would have impacted upon the performance by the appellant of her daily duties in the future. There was no error of law in the conclusion of the learned Deputy President.
Footnotes omitted
The finding by the single member that gave rise to the appeal was made in the following paragraph of her reasons:
[63]The conversation on 1 June 2007 between Mrs McAllister and Mr Beaton should be characterised as administrative action as it involved a discussion about a restructuring of Mrs McAllister’s work duties and hours. The fact that it came about because Mrs McAllister walked into Mr Beaton’s office unannounced whist he was working on a document does not alter the fact that it involved the way in which the department was structured. This encounter may not have been the ideal way in which to raise a potential change to an employee’s duties and hours but it was only a proposal and in effect a consultation regarding a potential change that did not in fact take place. I am satisfied that it was reasonable administrative action carried out in a reasonable manner.
On appeal this part of the reasons was said to be inadequate. The argument by Mrs McAllister was summarised by the majority as follows:
[54]On appeal the appellant contended that these reasons were inadequate in that they did not enable the appellant to understand how the learned Deputy President reached a conclusion on a significant issue. In particular the appellant submitted that the reasons should have addressed the contention that it was unreasonable of Mr Beaton to propose a restructure involving loss of duties and hours due to a perceived inadequate work performance in the absence of those performance concerns having been raised with the appellant at an earlier stage so as to give her the opportunity to address them.
The majority upheld the submission by Mrs McAllister in relation to this aspect of the single member’s reasons:
[62]Returning to the reasons for decision of the learned Deputy President, we note that she observed that the issue involved an objective inquiry of fact as to whether the administrative action was reasonable and whether it was taken in a reasonable manner in accordance with Price v The Corporation. Adopting the approach of Lander J in Keen, she then listed five particular considerations which were relevant in this regard. These included the facts and circumstances giving rise to the requirements for the administrative action, and any other relevant matters.
[63]However, the learned Deputy President did not expressly address the reasonableness of the respondent’s action on 1 June 2007 by reference to any aspect of the direction she adopted from Keen. In particular, the reasons do not disclose that there was any consideration of whether or not the action on 1 June 2007, involving a discussion about a draft proposal for restructure which adversely affected her position, was unreasonable action due to it being premised upon perceived performance deficiencies of the appellant about which she had not previously been informed, and which she had not been given an opportunity to remedy.
[64]With one qualification, there was no reference to the evidence or submissions of the parties as to the relevance of Mr Beaton not having addressed performance issues before 1 June 2007. That qualification is that, in the section of the reasons dealing with the respective credibility of the appellant and Mr Beaton, reference was made to Mr Beaton’s knowledge of the option of performance management, with the observation being made that Mr Beaton gave no evidence as to why he had not done this. The matter was otherwise not dealt with or taken up in any other part of the reasons.
…
[67]The reasons given by the learned Deputy President relate only to the “encounter” on 1 June 2007. Whilst the appellant knows the basis upon which it was concluded that this encounter did not involve any unreasonableness having regard to the events on that day, she does not know the basis of the rejection of her case that it was unreasonable in the circumstances to draft and discuss a restructure at all without first having addressed performance issues. She does not know whether the absence of any discussion as to her performance before the development of a restructure proposal was considered to be irrelevant, or whether it was a factor taken into account, and if so, how it was taken into account. These were considerations important to the finding ultimately made and to the appellant’s understanding of the finding.
…
[70]One is left with the strong impression that an important aspect of the appellant’s case on the topic of the reasonableness of the respondent’s action and the manner in which it was taken was not dealt with. This creates a reasonable apprehension that the learned Deputy President did not understand the appellant’s case. In our view it has resulted in a breach of the principle that justice must not only be done but must be seen to be done, and results in an error of law.
Footnotes omitted
The other member of the Full Bench, McCouaig DP, came to the contrary conclusion. He said:
[85]As to Mr Cole’s suggestion that the matter should have been raised with the appellant before then in the context of managing her performance, it is in my view implicit in the learned trial Judge’s comment that this encounter may not have been “the ideal way in which to raise a potential change to an employee’s duties and hours” that she was mindful of alternative and possibly better ways in which these matters could have been raised with the worker. The learned trial Judge had earlier alluded to Mr Beaton’s awareness of the option of managing her performance and his non-pursuit of this option in her reasons at para 50. On the appellant’s own evidence, Mr Beaton had initially been reluctant to discuss his proposal with the appellant there and then on 1 June 2007, and had suggested that it be left to her Performance Development Review.
[86]It is also implicit from the rest of that same sentence “...but it was only a proposal and in effect a consultation regarding a potential change that did not in fact take place” that the learned trial Judge did not regard any failure on the employer’s part to first discuss these matters with the appellant in some other way as precluding her from finding that the conversation on 1 June 2007 constituted reasonable administrative action carried out in a reasonable manner.
…
[88]Applying a constructive approach to the learned trial Judge’s reasons overall, I think it can be inferred that she was mindful of Mr Beaton’s non-pursuit of the alternative option of performance management but that she considered that this did not inhibit her from concluding that in all the circumstances it was reasonable for Mr Beaton to have been preparing the restructure proposal and reasonable for him to have responded to the appellant in the manner that he did on 1 June 2007.
…
[90]In my respectful view, the learned trial Judge’s reasons for finding that the discussion between the appellant and Mr Beaton on 1 June 2007 constituted reasonable administrative action carried out in a reasonable manner were adequate.
On appeal, the issue is whether the majority erred in law in reaching the conclusion that they did.
Consideration of Appeal
The criticism of the reasons of the single member is that she did not deal with the contention that it was unreasonable of Mr Beaton (for convenience I express the matter this way, despite the wording of s 30A) to prepare a proposal to change Mrs McAllister’s duties and to reduce her hours, the proposal being based on or influenced by his opinion that her work performance was unsatisfactory, without first attempting to deal with his concerns by raising them with Mrs McAllister and by trying to deal with them by “performance management”. Mrs McAllister argues that the single member dealt only with the manner in which Mr Beaton handled the discussion, precipitated by Mrs McAllister, on 1 June 2007.
This is the criticism made by the majority in their reasons at [63]-[70] (set out above).
I respectfully disagree with the majority.
In her reasons the single member noted that Mr Beaton did not explain in evidence why he did not rely on performance management of Mrs McAllister, preferring to propose a change of duties and hours: at [50]. The single member accepted that the proposal was an attempt to deal with Mrs McAllister’s shortcomings: at [51]. In her reasons at [63] (set out above) the single member finds that the proposal was “only a proposal” and that what occurred on 1 June 2007 was “in effect a consultation” with Mrs McAllister about the proposal. Reading the single member’s reasons as a whole, I consider that she intended to find, and did find, that Mr Beaton acted reasonably in formulating the proposal (a mere proposal, requiring later discussion and approval) rather than resorting to and relying on performance management. As the single member said, it was only a proposal. It was yet to be approved. That required a decision by someone senior to Mr Beaton. By inference, the ultimate decision might have been to rely on performance management. For these reasons, the single member said in effect, that it was not unreasonable of Mr Beaton to formulate his proposal, rather than rely on performance management.

The issue is not whether this Court, or the Full Bench, agrees with that conclusion. The finding is not subject to appeal. The issue is whether the single member’s reasons deal adequately with the case before her. I agree that her reasons on the point could fairly be described as sparse. But I am satisfied that she intended to and did deal with the issue before her.
I agree with the reasons of Deputy President McCouaig (in dissent in the Full Bench), and in particular with his conclusions at [86] and [88] (also set out above).
My conclusion that the single member’s reasons are adequate, and that the Full Bench erred in deciding that they were not, is sufficient to dispose of the appeal.
In considering the adequacy of the single member’s reasons I have had regard to the following matters in particular.
First, the nature of the issue that the single member had to decide. It was, putting it a little loosely, whether the administrative action that Mr Beaton took was reasonable and was taken in a reasonable manner. In particular, did he act reasonably in adopting the approach that he took, rather than relying on performance management? In the state of the evidence before the single member this was a matter for her to assess in a practical way, bearing in mind that the Tribunal is a forum in which issues of this kind are often ventilated. The matter for decision was not one that required complex or lengthy reasoning. There was no reason why it could not be dealt with fairly briefly.
Next, before the single member the parties raised a number of events and encounters that were said to be, or not to be, reasonable administrative action taken in a reasonable manner. The single member had to deal with each of these matters. Before the Full Bench the focus was on the events of 1 June 2007, and the failure to try performance management. It is not surprising that at first instance the proposal by Mr Beaton did not receive the detailed treatment that it received on appeal. To say this is not to excuse inadequate reasons. It is to recognise the reality of the trial and appeal process.
The third point to bear in mind, of less significance in this case, is that it is not enough to identify an error of law in the reasons of the single member. The Full Bench could not interfere on appeal unless that error of law could have affected the decision, or unless, as the majority pointed out, the error amounted to a breach of the requirement that justice be done and be seen to be done: at [70]. This is a point made by McHugh JA in the passage set out below from his reasons in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247. In the present case, I consider that the reasons of the single member do not lead to the conclusion that justice does not appear to have been done because a significant factual issue was either left undecided, or decided without an adequate indication of the basis of the decision.
This case does not call for a re-examination of the question of when reasons for decision are or are not adequate. I considered the question of when reasons for decision are required, and the extent of the reasons required, in the context of a trial by judge alone in R v Keyte [2000] SASC 382; (2000) 78 SASR 68. The different context may well lead to a different outcome, compared with the present case, but a number of the judicial observations that I set out there are relevant to appeals of the kind now before the Court. In South Australian Fire & Emergency Services Commission v Workers Compensation Tribunal [2009] SASC 213; (2009) 105 SASR 1 Kourakis J, with whom the other members of the Court agreed, referred in passing to the approach to be taken when adequacy of reasons is raised at [64]-[65]. Some useful guidance is to be found in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 and in particular in the following passage from the reasons of McHugh JA at 281:
In a case where a right of appeal is given only in respect of a question of law, different considerations apply from the case where there is a full appeal. An ultimate finding of fact, which is not subject to appeal and which is in no way dependent upon the application of a legal standard, can be treated less elaborately than an issue involving a question of law or mixed fact and law. If no right of appeal is given against findings of fact, a failure to state the basis of even a crucial finding of fact, if it involves no legal standard, will only constitute an error of law if the failure can be characterised as a breach of the principle that justice must be seen to be done. If, for example, the only issue before a court is whether the plaintiff sustained injury by falling over, a simple finding that he fell or sustained injury would be enough, if the decision turned simply on the plaintiff’s credibility. But, if, in addition to the issue of credibility, other matters were relied on as going to the probability or improbability of the plaintiff’s case, such a simple finding would not be enough.
There is no need to explore these matters in this case.
Orders
I would allow the appeal; I would set aside the orders of the Full Bench made on 29 March 2010; I would order that an order be substituted that the appeal to the Full Bench of the Tribunal be dismissed. I would hear the parties on the question of the costs of the appeal to the Full Bench, and to this Court.
GRAY J: I would allow the appeal. I agree with the reasons of the Chief Justice. I agree with the orders that he has proposed.
SULAN J: I would allow the appeal for the reasons given by the Chief Justice. I agree with the orders that he proposes.