Ayoub v AMP Bank Limited

[2012] HCATrans 59

[2012] HCATrans 059

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S334 of 2011

B e t w e e n -

JOANNE AYOUB

Applicant

and

AMP BANK LIMITED ACN 081 596 009

Respondent

Application for special leave to appeal

FRENCH CJ
BELL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 9 MARCH 2012, AT 12.29 PM

Copyright in the High Court of Australia

MR P.E. KING:   If the Court pleases, I appear with MS S. NEUMUELLER for the applicant.  (instructed by Robert Balzola and Associates (Legal))

MR P.L. PERRY:   May it please the Court, I appear for the respondent.  (instructed by Hicksons Lawyers)

FRENCH CJ:   You have got a chance to speak, Mr Perry.

MR KING:   Nice things were said about him by the arbitrator in this case, your Honour.

FRENCH CJ:   All right.

MR KING:   Your Honours, in our respectful submission, the special leave questions which attract the Court’s appellate attention in this matter are, first, whether the Acting Deputy President of the Workers Compensation Commission of NSW breached the natural justice hearing rule by deliberating on and deciding the bank’s appeal from Arbitrator McIlwaine on the papers knowing that an adverse credit ruling against my client, Ms Ayoub, was being considered that differed from that made by the arbitrator, was not the subject of any notice of appeal or argument by the bank and, secondly, whether the Court of Appeal erred in holding that Ms Ayoub had waived and could waive prospectively the operation of the hearing rule under a test of waiver which we submit itself is in error. 

The short facts are that Ms Ayoub worked for a number of years as a senior banker in the respondent bank receiving excellent performance ratings.  Then her supervisor changed in March 2007.  Six months later she was dismissed under a retrenchment through a restructure of one, namely, her.  It is not disputed that at the time of her dismissal she suffered workplace injuries causing total incapacity from depression, stress and severe psychiatric injury.  Her subsequent claim in the Workers Compensation Commission was that these injuries were caused by the unreasonable manner of her dismissal and by the distress and disappointment she suffered under her new supervisor ‑ ‑ ‑

FRENCH CJ:   That was the arbitrator’s finding?

MR KING:   That is right – from taunts about her Lebanese background, her dress and physical features.  Her case came before Arbitrator McIlwaine who heard the matter over three days.  There was extensive cross‑examination of Ms Ayoub as to credit and the arbitrator found for her in words which I would respectfully draw attention to at page 5 of the application book.  The Arbitrator said this:

Initially I found the written statements of Ms Ayoub not to be helpful . . . Ms Ayoub was more impressive when giving her oral testimony and being cross examined by such an experienced and effective cross examiner as Mr Perry.  Ms Ayoub was direct in her responses, frequently making concessions against her interest.  I was impressed with her oral evidence and am prepared to make allowances for the deficiencies in her statements as a result of this evidence.  Based on my acceptance of her as a credible witness I am prepared to accept her version of events where there is any significant difference between the parties.

The bank appealed.  In its notice of appeal it requested that the matter be decided on the papers under practice note one and section 354(6) of the Workplace Injuries Compensation Act.  Now, the parties agree, your Honours, that the relevant provisions of the Act are set out at pages 131 in the application book and section 354 is at page 133.  Importantly, no ground of appeal and no written submissions of the bank called into question the credit findings of Arbitrator McIlwaine.  Ms Ayoub did not oppose the matter being decided on the papers but argued as her primary position that the decision was correct and as her fallback position that the injuries were caused by workplace discrimination.

BELL J:   That is very much at the heart of the Court of Appeal’s consideration of the matters, is it not?  Ms Ayoub was the person who invited consideration on the papers of matters, including the substance of the discrimination aspects of her claim, that the arbitrator had not found it necessary to determine. 

MR KING:   Invited, your Honour, we would respectively submit, is too strong.  I think Justice Whealy in his judgment even used the word “demanded”, but the true position is as set out in her notice of contention, and her argument before the acting deputy president in the appellate provision is set out at page 125 of the application book in writing, at point 31:

(18)     In the event that the Presidential Member decides that any part of the determination ought to be set aside, the respondent worker submits that there should be a finding –

et cetera.  So her primary position was to support the decision of the arbitrator on the ground he found and, in the alternative, to the contention point that it was also caused by discrimination in the workplace.

FRENCH CJ:   These are the workplace events referred to?

MR KING:   Yes.  It is no doubt, your Honours, that it is absolutely no doubt and it is agreed that the workplace injuries she suffered, which involved total incapacity, arose from the workplace.  Now, in allowing the appeal, the acting deputy president found against Ms Ayoub on credit, doubting her veracity, preferring the bank’s witnesses to her account in any case of conflict and treating her written oral evidence as mere allegations.  Can I just turn briefly to make this point to page 54 of the application book.  At paragraph 113 your Honours will note that the first thing that the appellate Tribunal did was to look not at the appeal but at Ms Ayoub’s alternative or fallback case of workplace discrimination.  Then at 114:

I am not persuaded that there is anywhere near sufficient evidence in support of Ms Ayoub’s claims of bullying, harassment, racial, sexual or gender discrimination in her workplace.  I also have some doubts as to the veracity of her evidence for reasons which will follow.

Then I will only draw attention to some short passages, but they effectively disagree with the arbitrator.  At 115:

Ms Ayoub brings no other evidence in support of her allegations.

At 118:

AMP has strenuously denied Ms Ayoub’s allegations. 

and then refers to several witnesses.  Of course, the arbitrator had taken all that into account after cross‑examination and taken a different view.

FRENCH CJ:   Is it not the case, though, that the primary finding against you is one of insufficiency of evidence?

MR KING:   But in the context where there is doubts as to her veracity and then it goes on ‑ ‑ ‑

FRENCH CJ:   But when you say “in the context”, that seems to be an add on which does not detract from the force of the first sentence at 114 and then 115 goes in to the absence of evidence in various respects.

MR KING:   That is so and, indeed, 114 needs to be understood as in the light of 121 and 122, next page.  At 121:

These are just some examples of the many instances where her complaints are simply unsupported by the evidence, or inconsistent with the totality of it.

So here is an appellate Tribunal looking at the totality of the evidence and drawing a conclusion.  But importantly in 122:

I acknowledge, as did the Arbitrator, that there are “conflicting statements” –

Of course, the arbitrator found an entirely different outcome acknowledging the conflicting statements and found in her favour on credit in all respects –

Nevertheless, I remain doubtful as to the veracity of Ms Ayoub’s allegations –

Then the acting deputy president refers to possible arguments about her misperceiving events, reconstructing events, over the page, ex post facto rationalisation and then concludes –

In my view however, her allegations are insufficient to establish, as she claimed, that her ‘injury’ was as a consequence of what she categorised as bullying –

Just pausing there, your Honours, what was evidence, that is her statements, her oral evidence, tested in the cauldron of cross‑examination has become on appeal mere allegations.  The whole of her evidence that as to what had happened is reduced by reason of the doubts as to veracity and findings about her credit to mere allegations as a result of which not only ‑ ‑ ‑

BELL J:   Can I just raise one matter with you respecting the arbitration.  Ms Ayoub gave evidence and was cross-examined at the arbitration.  As I understand it, the approach adopted with respect to the evidence of the AMP witnesses was that they were not required for cross-examination, is that right?

MR KING:   They were not required, as I recall, but what ‑ ‑ ‑

BELL J:   And in the way the matter developed – can I just ask you this also, Mr King.  Was it that the arbitrator approached the matter by reference to a consideration of the reasonableness or otherwise of AMP’s conduct in relation to the consultation, or absence of it, over the redundancy.

MR KING:   Absence of consultation. 

BELL J:   That was the basis of the arbitrator’s decision, namely, a conclusion of unreasonable conduct on the bank’s behalf as to the absence of consultation.  Now, that was not a matter in issue, was it?

MR KING:   Yes, and if your Honour looks at paragraph 69 of the arbitrator’s decision, it also ‑ ‑ ‑

BELL J:   Sorry, where do we find that?

MR KING:   It also arose out of the way in which she was informed of the injury.

FRENCH CJ:   Informed of the redundancy.

MR KING:   Yes, I am sorry, informed of the retrenchment, yes.

BELL J:   The matter that I am taking up with you is there were a number of issues raised, as it were, by your client’s account which the arbitrator did not find it necessary to determine. 

MR KING:   No.  That is right.

BELL J:   What the applicant did, when the matter came before the acting deputy president for consideration on the papers, was to say in the event you were to be against me on my primary position, then I would like you to resolve the matter by reference to the claims that I make respecting discrimination and the like.

MR KING:   That is right, the workplace discrimination.

BELL J:   It was the latter that the deputy president concluded there was an insufficiency of evidence to support circumstances that include that the statement that had been received before the arbitrator were not challenged in cross-examination.

MR KING:   Yes, but at the same time doubting her veracity, rejecting her evidence as against the bank’s employees, contrary to what the arbitrator had done, rejecting her evidence against the conflicting statements of the bank.  So it cannot be avoided, in our respectful submission, that the acting deputy president appreciated that she was proposing to take a different view about the credit of Ms Ayoub, yet did not list the matter and give her the opportunity to comment or lead further evidence, as she might have done, under section 352 of the Act and did not afford her the basic respect and rights that the hearing rule provides.

I would only refer briefly to, in this context, two cases in this Court.  One is Ex parte Aala and, in particular, the observations of Justices Gummow and Gaudron at page 69.  In that case, the Tribunal made an adverse finding of credit about a story being concocted without putting that first to the prosecutor and at 77 their Honours refer to:

the practical content in the present case of the requirement for procedural fairness –

referring to the critical knowledge, the importance of any adverse finding as to credit.  Here, we submit, the practical content is not simply the fact that Ms Ayoub was extensively cross-examined by the bank and her credit was accepted in a ringing endorsement, but that there was no notice of appeal which drew that into question, no submission by the bank which drew that into question and the parties were entitled to proceed on the basis that credit was not an issue, yet credit clearly was an issue for the acting deputy president who did not warn, or left, if I can use the words of Lord Diplock also noted in ex parte Aala, left Ms Ayoub in the dark.  Chief Justice Gleeson, in the same case, made the point:

Had [the prosecutor] been given an opportunity to correct the misunderstanding, a different view might have been taken as to his credibility.

Going on at paragraph 4: 

no one can be sure of that.  Decisions as to credibility are often based upon matters of impression, and an unfavourable view taken upon an otherwise minor issue may be decisive.

When the acting deputy president made the observations about veracity of Ms Ayoub in the teeth of the arbitrator’s finding of ringing endorsement of her credit and then reducing her statements of evidence to mere allegations, both oral evidence and statements, with respect, there has been a serious breach of natural justice.

FRENCH CJ:   The Court of Appeal did not say, did it, that the rules of natural justice did not apply or had been waived?  It was focusing, was it not, on the content of the rule?

MR KING:   It focused on the argument of waiver.  Justice Bell, when her Honour was sitting in the Court of Appeal in the matter of Tan, held that ‑ ‑ ‑

FRENCH CJ:   You might waive an oral hearing, that does not mean you waive procedural fairness.

MR KING:   Exactly, that is our point.

FRENCH CJ:   So a waiver of an oral hearing is not a waiver of procedural fairness.  What remains is the question, what is the content of procedural fairness in the circumstances?  You say the content of procedural fairness in these circumstances is that the president by addressing an issue which the applicant could not have expected to have been addressed in the way in which the appeal was framed denied her procedural fairness.

MR KING:   Indeed, your Honours, and to introduce the concept of waiver at paragraph 64, not just waiver but conscious waiver.  It is a basic notion of lawyers that a waiver is an intentional act with knowledge and yet the learned judges did not adopt that test of waiver, they adopted the negligence test.

FRENCH CJ:   But the critical sentence is surely this at 64:

Unless the ADP adopted an approach which was not reasonably foreseeable on the material before her, the possibility that there could be a denial of procedural fairness by adopting the approach proposed by the parties is remote.

So the question is whether the acting deputy president adopted an approach which was not reasonably foreseeable on the material before her.  My understanding is that you are saying she did adopt such an approach and therefore there was a breach of procedural fairness, because she got into credit issues.

MR KING:   Indeed, but worse than that, to adopt the test of reasonable foreseeability, which is the test of negligence, is never to address the question, which your Honour the learned Chief Justice has just put, as to whether or not there in fact was a waiver or indeed could be a waiver prospectively.  Indeed, the idea of foreseeability is taken up in the previous sentence where the learned judge refers to whether or not conflicts in the evidence being readily foreseeable.  That might be the case in some matters, but where there was nothing in the constitution of the case before the court, nothing in the notice of appeal, nothing in the written submissions, no cavilling with the credit finding in favour of Ms Ayoub, the practical content was that there had to be a very explicit and actual knowledge and there was no such finding by the Court of Appeal at all.

FRENCH CJ:   Anyway, the primary problem for you still is, is it not, that the principal finding of the acting deputy president was a want of evidence to support Ms Ayoub’s fallback position, that is to say, that it was the work events to which her condition could be attributed?

MR KING:   We would submit no, your Honour, because it is important to see how the subtleties but critical flow of the argument that was advanced by the acting deputy president as to why she did not relist, why she did not give my client the opportunity to reject the suggestion there was no veracity in her evidence and that she should not be believed over the bank’s witnesses and so on, which is what arbitrator had done to the contrary.  It is really taken up in paragraph 122.  There is an elision in the reasoning which, with the greatest respect to the acting deputy president ‑ ‑ ‑

FRENCH CJ:   This is the acting deputy president’s reasons?

MR KING:   Yes, at page 55.  She said:

I acknowledge, as did the Arbitrator, that there are “conflicting statements.”

But what the learned acting deputy president does not do is go on to say, yet the arbitrator saw Ms Ayoub, saw her cross‑examined extensively, and accepted that her evidence, her statements over that of the bank.  It then goes on ‑ ‑ ‑

BELL J:   Did the arbitrator making findings in these respects?  I understood the arbitrator had not found it necessary to deal with the discrimination complaints.

MR KING:   The workplace discrimination, that is correct, because the arbitrator said it was no necessary to do so because he was satisfied there was unreasonableness in the process of the dismissal which had caused the admitted workplace injuries.  All that Ms Ayoub did in the appellate division was to argue in the alternative, arbitrator is right, but if wrong, we also rely upon the workplace discrimination case.

BELL J:   What she said was, if unsuccessful on her primary case she invited a finding that:

the workplace events between March and November 2007 contributed to the injury –

This is at application book 93, paragraph 55 in Justice Whealy’s judgment, where ‑ ‑ ‑

MR KING:   I know that his Honour uses the word “invited” and “demand” and that is reflected also at paragraph 64, but it is not really a true reflection of what happened or what normally happens.  One would expect her and her legal advisors to simply support the decision of the arbitrator, but as a fallback and under a notice of contention, put the alternative case.  Instead of that, the acting deputy president ran straight into the whole matter, found against her, doubting her veracity on the workplace discrimination point and then used that, saying that it downgraded her evidence to that of mere allegation – see line 10 at page 56 – because she

could not believe her, and then use that against her on the principal argument of the bank at paragraph 148 at page 61, if your Honours go to that paragraph.  The acting deputy president said:

Taking the issues sequentially as his Honour did in Pirie, there is no evidence, other than Ms Ayoub’s assertions –

So her evidence becomes mere assertions, or as I have earlier pointed out, allegations –

of racial and gender discrimination (about which I have concluded there was insufficient evidence to support) –

Insufficient evidence is, we say, not a disguised finding of a rejection of her evidence but, in truth, it has downgraded the oral and written affidavits in evidence she gave to nothing more than just assertions and that, of course, meant that there was no evidence to support the unreasonableness of the dismissal process.  There is a further reason, your Honours, why – an important reason – involving the construction of the statute ‑ ‑ ‑

FRENCH CJ:   I think you are out of time, Mr King.

MR KING:   I am sorry.  Those are our submissions.

FRENCH CJ:   Yes.  We will not need to trouble you, Mr Perry.

The applicant seeks special leave to appeal against a decision of the Court of Appeal of the Supreme Court of New South Wales dismissing an appeal against a decision of an Acting Deputy President of the Workers Compensation Commission, which had revoked a decision of an arbitrator in favour of the applicant.  The arbitrator had found that the applicant suffered psychological injury wholly or predominantly caused by the respondent’s failure to consult with her about her retrenchment as required by a reasonable retrenchment process.

The applicant complains that the Court of Appeal, in dismissing her appeal against the decision of the Acting Deputy President, held that the rules of natural justice did not apply to the decision of the Acting Deputy President.  The Acting Deputy President had found against the applicant on an issue not determined by the arbitrator.  The Acting Deputy President reached her conclusion on the basis that there was insufficient evidence to support the applicant’s claims of workplace discrimination and harassment.

While the Court of Appeal found, as was the case, that the applicant had agreed to the Acting Deputy President making a determination on the papers, it did not hold that she had thereby waived procedural fairness.  The decision of the Court of Appeal turned upon whether there had been a failure of procedural fairness in the circumstances of this case. 

In our opinion, having regard to the circumstances and the basis upon which the arbitrator reached her finding, the prospects of success on an appeal are not such as to warrant the grant of special leave.  Special leave should be refused with costs.

AT 12.53 PM THE MATTER WAS CONCLUDED