Bailey v Broadsword Marine Contractors Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Bailey v Broadsword Marine Contractors Pty Ltd

[2017] FCAFC 219

Appeal from: Bailey v Broadsword Marine Contractors Pty Ltd [2016] AATA 1048
File number: QUD 21 of 2017
Judges: RARES, REEVES AND DERRINGTON JJ
Date of judgment: 22 December 2017
Catchwords:

ADMINISTRATIVE LAW – whether the appellant had suffered an “injury” under the Seafarers Rehabilitation and Compensation Act 1992 (Cth) – distinction between “disease” and “injury” in its primary sense considered – effect of “sudden” or “dramatic” change considered – exclusionary effect of s 10(7) of the Seafarers Rehabilitation and Compensation Act 1992 (Cth) considered

ADMINISTRATIVE LAW – whether the appellant had suffered an “injury” under the Seafarers Rehabilitation and Compensation Act 1992 (Cth) – whether the adjustment disorders were the same disease – whether the appellant made a “wilful” and “false” representation

ADMINISTRATIVE LAW – construction of reasons of Tribunal – whether Tribunal turned its mind to the central issue in contention – effect of reading reasons as a whole

Legislation:

Administrative Appeals Tribunal Act 1975 (Cth) ss 33, 43, 44

Safety, Rehabilitation and Compensation Act 1988 (Cth) s 4

Seafarers Rehabilitation and Compensation Act 1992 (Cth) ss 3, 10, 10(7), 26, 78

Workers’ Compensation Act 1951 (ACT) s 7

Cases cited:

Cadbury UK Ltd v Registrar of Trademarks (2008) 316 ALD 608

Comcare v Martin (2016) 258 CLR 467

Comcare v Porter (1996) 70 FCR 139

Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280

Dalton v Deputy Federal Commissioner of Taxation (1986) 160 CLR 246

Department of Veterans’ Affairs v Studdert [2001] FCA 1642

Hume Steel Ltd v Peart (1947) 75 CLR 242

Kennedy Cleaning Services Pty Ltd v Petkoska (2000) 200 CLR 286

Lawrance v Centrelink (2005) 88 ALD 664

May v Military Rehabilitation and Compensation Commission (2015) 233 FCR 397

Military Rehabilitation and Compensation Commission v May (2016) 257 CLR 468

Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271–272

Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323

Prain v Comcare [2017] FCAFC 143

Re Minister for Immigration and Multicultural and Indigenous Affairs;  Ex parte Palme (2003) 216 CLR 212

Re Ruddock; ex parte S154/2002 (2003) 201 ALR 437

Sullivan v Civil Aviation Safety Authority (2014) 226 FCR 555

Sun v Minister For Immigration and Border Protection (2016) 243 FCR 220

Wong v Law Institute of Australia [2014] VSC 136

Zickar v MGH Plastic Industries Pty Ltd (1996) 187 CLR 310

Date of hearing: 7 August 2017
Date of last submissions: 6 October 2017
Registry: Queensland
Division: General Division
National Practice Area: Administrative and Constitutional Law and Human Rights
Category: Catchwords
Number of paragraphs: 156
Counsel for the Applicant: Ms SD Anderson
Solicitor for the Applicant: Woods Prince Lawyers
Counsel for the Respondent: Mr PE Hack QC with Mr AC Harding
Solicitor for the Respondent: Sparke Helmore

ORDERS

QUD 21 of 2017
BETWEEN:

TRAVIS BAILEY

Applicant
AND:

BROADSWORD MARINE CONTRACTORS PTY LTD

Respondent

JUDGES:

RARES, REEVES AND DERRINGTON JJ

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Details
Case
[2017] FCAFC 219
Decision Date

CaseChat Overview and Summary

In the case of Bailey v Broadsword Marine Contractors Pty Ltd, the appellant, Mr. Travis Bailey, sought compensation from his employer, Broadsword Marine Contractors Pty Ltd, under the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (SRCA) for an "injury" sustained during his employment. Mr. Bailey had previously suffered from an adjustment disorder with associated depression and anxiety in 2011, which led him to cease work. Upon commencing work at the Bing Bong facility in 2014, he experienced the same condition again and had to cease work once more. Broadsword initially compensated Mr. Bailey but later denied his ongoing claim for benefits by invoking section 10(7) of the SRCA, which excludes compensation for a disease if an employee has made a wilful and false representation about not having previously suffered from that disease. The Administrative Appeals Tribunal (AAT) upheld Broadsword's decision, leading to Mr. Bailey's appeal.

The central legal issue in this case was whether Mr. Bailey's condition qualified as an "injury (other than a disease)" under the SRCA, allowing him to receive compensation despite the exclusionary provision of section 10(7). The court had to determine whether the Tribunal properly exercised its jurisdiction in interpreting the evidence and applying the statutory definitions of "disease" and "ailment" as they pertained to Mr. Bailey's claims. Furthermore, the court needed to assess whether the Tribunal's reasons for decision sufficiently identified and addressed the material questions of fact and provided adequate references to the evidence supporting its findings.

The court found that the Tribunal had failed to exercise its jurisdiction correctly. Instead of analyzing the evidence before it, the Tribunal assumed that Mr. Bailey's adjustment disorder was a "disease" based on prior decisions and cases that had not contested this characterization. The Tribunal's failure to address the critical factual issue of whether Mr. Bailey's condition was a "disease" or an "injury (other than a disease)" meant it did not fulfill its statutory obligation to consider the precise evidence on a fact-by-fact basis. Consequently, the Tribunal's reasons did not meet the requirements of section 43(2B) of the Administrative Appeals Tribunal Act, which mandates that the Tribunal include its findings on material questions of fact and references to the evidence supporting those findings. The court concluded that the Tribunal's reasoning process was flawed, leading to an improper application of the law.

Orders

Orders of the court

1. The appeal be dismissed.

2. The applicant pay the respondent’s costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

I am of opinion that the Tribunal failed to exercise its jurisdiction because it did not ask or answer that question. Instead, the Tribunal merely made an assumption as its own finding of fact rather than making a finding on the contested facts before it. The Tribunal made that assumption because it found that other Tribunals and courts had proceeded on the agreed fact that an adjustment disorder, being the “injury” for which Mr Bailey claimed compensation, was a “disease” within the defined meaning of “injury”. The factual characterisation of the medical diagnosis of Mr Bailey’s “adjustment disorder” was critical to the determination of his claim to compensation. The Tribunal did not analyse, or make findings of fact based on, the evidence before it but instead proceeded on the erroneous basis of the agreed or assumed facts in the decisions and cases to which it referred in a lengthy paragraph of its reasons. That amounted to a failure to exercise its jurisdiction.Background On 16 February 2017, the Chief Justice exercised his power under s 44(3) of the Administrative Appeals Tribunal Act to have the Full Court hear this appeal. The detailed facts and submissions are set out in the reasons of Reeves and Derrington JJ. The Tribunal dealt with Mr Bailey’s argument that he had suffered an “injury (other than a disease)” rather than a “disease” in seven paragraphs of its reasons. First, it dismissed his reliance on Dr John Chalk’s evidence, which was the only direct evidence before it on the characterisation question. Dr Chalk had said that each of an adjustment disorder and a post-traumatic stress disorder was not a disease but an injury if, as he had opined, “it has arisen as a consequence of an event”. The Tribunal dismissed that evidence, saying that Dr Chalk had based his answer on his State Workcover experience (at [20]). The Tribunal then referred to the definitions of “disease” and “ailment” in s 3 of the Seafarers Act, saying (at [22]):A mental health condition has been held to be an ailment under the definition in s 4 of the Safety, Rehabilitation and Compensation Act 1988 (Cth). (emphasis added) It referred to another Tribunal decision, two cases decided by single judges of this Court and Comcare v Martin (2016) 258 CLR 467 as each having accepted that an adjustment disorder was appropriately described as a disease. However, in each of those decisions, there was no issue whether, for the purposes of the legislation or the proceedings, the disorder was either or both a “disease” or an “injury (other than a disease)”. Thus, in Martin 258 CLR at 473 [13] French CJ, Bell, Gageler, Keane and Nettle JJ recorded that:There was no dispute before the Tribunal that Ms Martin suffered a disease within the meaning of s 5B(1). Yet, the Tribunal then proceeded, without any reasoning process, to say at [23]:23.The definition of ailment in s 3 of the Act is indistinguishable from the definition of ailment in s 4 of the Safety, Rehabilitation and Compensation Act 1988 (Cth). I find that the mental condition of the applicant, which [had] been diagnosed as an adjustment disorder, is an “aliment” [sic] and therefore a “disease” for the purposes of s 10(7) of the Act.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Having made the erroneous assertion that “a mental health condition” was an ailment, the Tribunal then found that s 10(7) operated to exclude Mr Bailey’s entitlement to compensation. Such a finding could only be made if the Tribunal had addressed the factual issue of whether Mr Bailey’s mental state for which he sought compensation was an “ailment” as defined and, if it were, whether his employment by Broadsword had contributed in a material degree to it. Conclusion For these reasons, the Tribunal did not perform its statutory function in relation to Mr Bailey’s claim for compensation. That function required the Tribunal to give “consideration to ‘the precise evidence, on a fact by fact basis, …’ and then to ask certain questions in order to determine whether an employee is suffering a ‘disease’ or an ‘injury (other than a disease)’”: May 257 CLR at 481 [49]. Accordingly, I would allow the appeal with costs, and order that the decision of the Tribunal made on 20 December 2016 to affirm the decision under review be set aside and the matter be remitted to the Tribunal to be heard and determined according to law. I would also order that Broadsword pay Mr Bailey’s costs. The Bing Bong Mining Loadout Facility is remotely located on the coastline in the south-western corner of the Gulf of Carpentaria. In 2014, the appellant, Mr Travis Bailey, desired to take up employment there in the maritime industry with the respondent, Broadsword Marine Contractors Pty Ltd (Broadsword). In order to do so, he required the permission of the owners of the loadout facility, Western Desert Resources Ltd, to access it. To obtain that permission he was required to make disclosure to Western Desert Resources of his prior medical conditions. He omitted to disclose the condition of “adjustment disorder with associated depression and anxiety” which he had suffered in 2011 and which had caused him to cease work. Within a month of commencing work at the Bing Bong facility, Mr Bailey again suffered the same condition and, again, he has been required to cease work. He sought compensation from Broadsword under the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (SRCA) claiming that he had suffered a “disease” within the meaning of that Act. Relevantly, s 10(7) of the SRCA excludes from the operation of the Act a disease which has been suffered by an employee and which would otherwise be within its scope where an employee, “for purposes connected with his or her employment … in the maritime industry” has “made a wilful and false representation that he or she … had not previously suffered, from that disease”. After paying Mr Bailey compensation for some time in respect of his most recently claimed disease, Broadsword relied upon s 10(7) to deny his claim for ongoing benefits and in a “reconsideration determination” made by it on 22 June 2015, it confirmed that determination. That decision was affirmed by the decision of a Deputy President of the Administrative Appeals Tribunal (the Tribunal) in the matter of Bailey v Broadsword Marine Contractors Pty Ltd [2016] AATA 1048.

Ratio Decidendi

Legal Principle Established

The Tribunal found that it was not material whether the onset of the ailment was sudden or gradual. That was, it found, because the definition of “ailment” in s 3 included both ones of sudden onset and of gradual development. It then found that each of Mr Bailey’s psychiatric illnesses in 2011 and 2014 was, first, an “ailment” and a “disease” within the meaning of ss 3 and 10(7) of the Seafarers Act and, secondly, the same condition. Accordingly, the Tribunal reasoned, the 2014 condition the subject of his claim was the same disease which he had “previously suffered” in 2011.Consideration The Tribunal must give what it considers to be the correct or preferable decision: Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 18 per Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ. It must also give reasons for its decision under s 43(2) of the Administrative Appeals Tribunal Act and, where, as here, it does so, s 43(2B) required that:those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based. Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ said in Dalton v Deputy Federal Commissioner of Taxation (1986) 160 CLR 246 at 250 that the purpose of an analogue of s 43(2B) was:to enable a person affected by a decision for which reasons must be given to be supplied with findings and a reference to the evidence or other material on which they were based so that he may shape the course of his future conduct accordingly. (emphasis added) Moreover, the purpose of a provision such as s 43(2) is to enable a court judicially reviewing the Tribunal’s reasons for its decision, first, to identify the findings that it made in reaching its conclusion, and, secondly, to infer, in appropriate cases, that the Tribunal did not consider to be material any matter that it did not mention in those reasons: Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 346 [69] per McHugh, Gummow and Hayne JJ; Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 224 [39] per Gleeson CJ, Gummow and Heydon JJ. As McHugh, Gummow and Hayne JJ said in Yusuf 206 CLR at 346 [69]: The Tribunal’s identification of what it considered to be the material questions of fact may demonstrate that it took into account some irrelevant consideration or did not take into account some relevant consideration [Minister for Aboriginal Affairs v Peko­‑Wallsend Ltd (1986) 162 CLR 24]. (emphasis in original) A purpose of the Parliament in providing for the three classifications in the definition of “injury” in s 3, was to expand the range of injuries for which compensation could be payable by providing for it to include a disease, an injury (other than a disease) and an aggravation of a physical or mental injury (other than a disease). Importantly, the definitions of both “disease” and “injury (other than a disease)” included physical and mental affects, namely, in the former case, by reference to the definition of “ailment”, as meaning “any physical or mental ailment, disorder, defect or morbid condition” and in the latter, by reference to the definition of “injury (other than a disease”) as meaning “a physical or mental injury arising out of, or in the course of, the employee’s employment”.