The State of South Australia In Right Of The Department For Education And Child Development v Dolan - [2021] SASCFC 30

Supreme Court of South Australia
(Full Court)
THE STATE OF SOUTH AUSTRALIA IN RIGHT OF THE DEPARTMENT FOR EDUCATION AND CHILD DEVELOPMENT v DOLAN
[2021] SASCFC 30
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, the Honourable Justice Doyle and the Honourable Justice Livesey)
2 July 2021

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - POINTS AND OBJECTIONS NOT TAKEN BELOW
APPEAL AND NEW TRIAL - NEW TRIAL - IN GENERAL AND PARTICULAR GROUNDS - IN GENERAL - OBJECTIONS AND POINTS NOT TAKEN AT TRIAL
WORKERS' COMPENSATION - PROCEEDINGS TO OBTAIN COMPENSATION - DETERMINATION OF CLAIMS - APPEALS, JUDICIAL REVIEW AND STATED CASES
WORKERS' COMPENSATION - ENTITLEMENT TO COMPENSATION - EMPLOYMENT RELATED INJURY, DISABILITY OR DISEASE - GENERALLY
The appellant appealed against a decision of the Full Bench of the South Australian Employment Tribunal (the Full Bench) dismissing an appeal from a single member who set aside a determination rejecting a claim for compensation by the respondent (the worker) for psychiatric injury.
The worker claimed that her psychiatric injury was caused by employment whereas the appellant contended that it was caused by reasonable administrative action taken in a reasonable manner. The decision at trial was made on a basis that had not been contended for by either party.
Appeals to the Full Bench and, in turn, to this Court were confined to questions of law. The main issues agitated on this appeal were whether the trial Judge’s reasons were adequate, as well as whether the appellant could raise on appeal a new point taken for the first time in this Court.
Held per Kourakis CJ and Livesey J (Doyle J agreeing), setting aside the decisions of the Full Bench and the trial Judge and remitting the matter for retrial before a different judge:
1.      The reasons were not adequate. A number of intermediate facts were not the subject of findings.
2.      The conclusion that the use of formal letters and the proposed involvement of a Department officer were unreasonable could not be supported without making inferences concerning matters which was neither obvious nor uncontentious. That the trial Judge did not explicitly address these matters, and that the Full Bench found it necessary to supply a number of inferences, exposes the existence of lacunae in the reasoning process.
Held per Livesey J (Doyle J agreeing):
3.      The use of the formal letters and the proposed involvement of a Department officer were not addressed in the evidence. The appellant was deprived of the possibility of a successful outcome as a result of the failure to afford procedural fairness.
4.      The question of procedural fairness gives rise to a question of law. Accordingly, this Court has the power to entertain the point. That power should only be exercised in exceptional circumstances. In this case, allowing the Department to raise the question of procedural fairness for the first time in this Court causes the worker no injustice.
Return to Work Act 2014 (SA) s 7; South Australian Employment Tribunal Act 2014 (SA) s 26I, s 68, s 68, referred to.
Department for Education and Child Development v Dolan [2019] SAET 166; Department for Health and Aging v Li (2018) 130 SASR 578; Dolan v Department for Education and Child Development [2018] SAET 32; Keen v Workers Rehabilitation and Compensation Corporation (1998) 71 SASR 42, discussed.
Advertiser Newspaper Ltd v McAllister [2010] SASCFC 32; Amaca Pty Ltd v Werfel [2020] SASCFC 125; Australian Competition & Consumer Commission v Flight Centre Travel Group Ltd (2016) 261 CLR 203; Battye v Shammall (2005) 91 SASR 315; Connecticut Fire Insurance Co v Kavanagh [1892] AC 473; Coulton v Holcombe (1986) 162 CLR 1; Crampton v The Queen (2000) 206 CLR 161; Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; DL v The Queen (2018) 266 CLR 1; El-Masri v Molloy [2015] SASCFC 63; Fleming v The Queen (1998) 197 CLR 250; Hollis v Vabu Pty Ltd (2001) 207 CLR 21; JGS v The Queen [2020] SASCFC 48; Macks v Viscariello (2017) 130 SASR 1; Minister for Immigration and Multicultural Affairs v Singh (2002) 209 CLR 533; Ramsay v Watson (1961) 108 CLR 642; Resi Corp v Munzer [2016] SASCFC 15; State Government Insurance Commission v Stead (1986) 161 CLR 141; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, 438; University of Wollongong v Metwally (No 2) (1985) 60 ALR 68; Water Board v Moustakas (1988) 180 CLR 491; Wheeler v State of South Australia (2012) 114 SASR 111, considered.

THE STATE OF SOUTH AUSTRALIA IN RIGHT OF THE DEPARTMENT FOR EDUCATION AND CHILD DEVELOPMENT v DOLAN
[2021] SASCFC 30

Full Court: Kourakis CJ, Doyle and Livesey JJ

KOURAKIS CJ: I would allow the appeal on the ground that the Judge failed to provide adequate reasons for finding that the actions of the Department for Education and Child Development (the Department), in providing formal disciplinary letters to the respondent on 5 and 11 November 2015 and 18 February 2016, and arranging a meeting with an officer of the Department’s Performance and Incapacity Unit were ‘not reasonable actions taken in a reasonable manner’.
The only intermediate findings made by the Judge, on which that ultimate conclusion could be founded, were that the Department should have appreciated that:[1]
·Ms Dolan would find the appointment of another employee, namely Mr Williams, to the promotional position for which she had applied ‘particularly challenging’; and
·The appointment of Mr Williams was likely to cause Ms Dolan to have negative thoughts and feelings including a sense of job insecurity and a lack of appreciation.
[1] Department of Education and Child Development v Dolan [2019] SAET 166 at [30].
It is trite, but necessary to observe, that many management decisions upset workers to varying degrees.
The Judge’s intermediate finding is a necessary but insufficient basis on which to find that the Department’s actions were unreasonable. Further findings were logically necessary. In particular, the following questions had to be addressed:
(a)was there a foreseeable risk that proceeding in that formal way would not only upset Ms Dolan but also cause her psychological distress or injury?
(b)were there any adverse human resource and employee management consequences of proceeding less formally in Ms Dolan’s case?
(c)where to strike the proper balance of the competing administrative options available to the Department?
The Judge did not address those questions at all. On appeal, the Full Bench of the South Australian Employment Tribunal (SAET) was prepared to ‘infer’ that the Judge must have determined questions or issues of that kind favourably to Ms Dolan. However, in assessing the adequacy of reasons for judgment, no occasion arises for considering whether or not particular reasons for a conclusion can be ‘inferred’. The very rationale for the requirement in law to give adequate reason is that the parties should not be left to infer the reasons for the decision. Drawing inferences is a process engaged in to make findings of fact and not as an element of reading comprehension. There are often competing inferences available in fact finding. The discernment of a Judge’s reasons for deciding a case against one of the parties should not be plagued by that difficulty.
Some elliptical expression might, in some cases, be excused. There are cases in which it might be said that it goes without saying that the Judge so found. That is not this case. The learned trial Judge did not address at all the further findings which were necessary to sustain his conclusion.
I would also wish to emphasise that the question of reasonableness of administrative action taken against employees is a complex question. The management of disciplinary and performance issues involves both practical experience and professional expertise. Even though decisions on what is reasonable for the purposes of s 7 of the Return to Work Act 2014 (SA) (the Act) are normative in nature, they may be informed by evidence of the practices of public and private employers.
I acknowledge that SAET is not bound to apply s 7 of the Act in conformity with common employment practices. It is a specialist tribunal with considerable expertise in hearing and determining questions of this kind. Nonetheless, the parties to litigation in which the reasonableness of administrative and disciplinary action arises should carefully consider whether or not expert evidence should be called.
It is not difficult to advance strong reasons in support of the Judge’s conclusion. There was plainly a dysfunctional working relationship between Ms Dolan and Mr Williams. In the ordinary course, one would expect an employer to support its employees to establish professional and functional working relationships through mediation and other training processes. However, the Judge’s reasons do not step through whether, and why, the administrative action taken by the Department was unreasonable.
As I earlier observed, the failure to give adequate reasons is an error of law. For that reason, the appeal must be allowed, the orders of the Judge set aside and the matter remitted to the Tribunal for a further hearing.
DOYLE JA: I would allow the appeal, and remit the matter for retrial. I agree with the reasons of Kourakis CJ and Livesey J.
LIVESEY J:
Introduction
This appeal concerns a decision which did not correspond with the cases made and pursued by the parties at the trial. Perhaps surprisingly, that did not emerge until during the hearing before this Court. No issue about procedural fairness was previously agitated. That issue was, accordingly, not the subject of any ground of appeal, whether during the first appeal to the Full Bench of the South Australian Employment Tribunal (the Full Bench), or during this second appeal.
The appellant (the Department) appeals, by permission,[2] against the decision of the Full Bench dismissing an appeal[3] from a single member who set aside a determination rejecting a claim for compensation by the respondent (the worker) for psychiatric injury.[4] An appeal to the Full Bench and, in turn, to this Court, is confined to questions of law.[5] The main issues agitated on this appeal were whether the trial Judge’s reasons were adequate, as well as whether the Department could raise on appeal a new point taken for the first time in this Court.
[2]     State of South Australia (In Right of Department for Education and Child Development) v Dolan [2019] SASC 168 (Stanley J).
[3]     Department for Education and Child Development v Dolan [2019] SAET 166 (Hannon DPJ, with whom Farrell DPJ and Ardlie DPM agreed).
[4]     Dolan v Department for Education and Child Development [2018] SAET 32 (Gilchrist DPJ).
[5] Sections 26I, 67 and 68 of the South Australian Employment Tribunal Act 2014 (SA).
For the reasons that follow, the appeal should be allowed and the matter remitted for a retrial.
A claim for psychiatric injury
This case concerns a claim for psychiatric injury which it is alleged was caused by the worker’s employment. As is usual in these cases, that required the worker to navigate the complex statutory test set out in s 7 of the Return to Work Act 2014 (SA) (the Act). In this case, ss 7(2)(b) and 7(4) are relevant:
(1)     This Act applies to an injury if (and only if) it arises from employment.
(2)     Subject to this section, an injury arises from employment if—
(a)     in the case of an injury other than a psychiatric injury—the injury arises out of or in the course of employment and the employment was a significant contributing cause of the injury; and
(b)     in the case of a psychiatric injury—
(i)the psychiatric injury arises out of or in the course of employment and the employment was the significant contributing cause of the injury; and
(ii)the injury did not arise wholly or predominantly from any action or decision designated under subsection (4).
(3)In connection with the application of subsection (2) to an injury that is, or results from, the aggravation, acceleration, exacerbation, deterioration or recurrence of a prior injury (a “prescribed event”)—
(a)     in the case of an injury other than a psychiatric injury—employment must be a significant contributing cause of the prescribed event; and
(b)     in the case of a psychiatric injury—
(i)employment must be the significant contributing cause of the prescribed event; and
(ii)the prescribed event must not arise wholly or predominantly from any action or decision designated under subsection (4),
and then the injury is only compensable to the extent of and for the duration of the relevant aggravation, acceleration, exacerbation, deterioration or recurrence.
(4)     The following are designated for the purposes of subsection (2)(b)(ii) and (3)(b)(ii):
(a)     reasonable action taken in a reasonable manner by the employer to transfer, demote, discipline, counsel, retrench or dismiss the worker or a decision of the employer not to renew or extend a contract of service;
(b)     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;
(c)     reasonable administrative action taken in a reasonable manner by the employer in connection with the worker's employment;
(d)     reasonable action taken in a reasonable manner under this Act affecting the worker.
The complexities associated with the fact-finding required under precursor provisions, as well as this provision, have been considered in a number of cases.[6]
[6] See, for example, Keen v Workers Rehabilitation and Compensation Corporation (1998) 71 SASR 42; Department for Health and Aging v Li (2018) 130 SASR 578.
In particular, not only must a worker demonstrate that the psychiatric injury “arises out of or in the course of employment and the employment was the significant contributing cause”, but it is also necessary for a worker to demonstrate that the psychiatric injury “did not arise wholly or predominantly” from any “designated action or decision”. This latter requirement is sometimes described in a shorthand way as “reasonable administrative action taken in a reasonable manner”.
Because the factual findings required are not straightforward, it is necessary that close attention be given to the specific requirements of the Act as well as the distinction between the question whether employment was the significant contributing cause, and whether the injury did not arise wholly or predominantly from any designated action or decision. Naturally enough, threads which often run through these cases are precisely what the workers’ duties and performance were, what the employer did, the circumstances known to the worker and employer at the time, and whether what the employer did was in those circumstances reasonable and undertaken in a reasonable manner. In this case, it is these questions of reasonableness which are particularly relevant.
Indeed, this is a good example of a case demonstrating the need to put the propositions for which a party contends fairly and directly to the opposing party. In most cases, that will require that the employer’s case be put fairly and directly to the worker for the worker’s response in cross-examination. Correspondingly, in so far as it might be suggested that the employer’s action was not reasonable or not taken in a reasonable manner, it is necessary that this be put fairly and directly to those witnesses of the employer who devised or implemented the relevant action or decision, so that they may have an opportunity to respond in cross-examination.
Likewise, in the case of the expert evidence, usually relevant to questions of diagnosis and causation, it is necessary that the psychologist or psychiatrist who has relied on any particular history which is in dispute be given an opportunity to address any alternative history or sequence of events on which the cross-examining party relies.[7]
[7] Ramsay v Watson (1961) 108 CLR 642; Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588.
Particular care is required when addressing the evidence going to the competing propositions because, ultimately, many cases can be distilled to what is ultimately a normative question about whether the designated action or decision was reasonable or undertaken in a reasonable manner, or otherwise.
Relevant factual background
The worker was employed by the Department for many years, and from around 2000 the worker was employed in an information technology role at an adult education campus. Whilst this was a permanent part-time position, temporary contracts enabled the worker to work full-time.
By 2014, the worker was working as what was described as the “Network Manager” on a fixed term contract. Before the end of that contract there was a restructure of the Information Technology Department. The worker was encouraged to apply for a newly created position described as “Computer Systems Manager, Level 3 School Services Officer”. There was an interview. Although the worker assumed that she had won the position, by September 2015 she learned that she had not been successful. For various reasons, including a desire to limit outsourcing, a Mr Williams was appointed instead.
In her evidence before the trial Judge, the worker described a very poor working relationship with Mr Williams which she attributed to his “very blunt and abrupt” manner. The worker described their “relationship … as toxic”.[8] This culminated in a team meeting chaired by the coordinator of ICT Systems on 30 October 2015 during which the worker aired some of her grievances about Mr Williams. The worker in evidence described organising a meeting with the Principal, Ms Abbott, which was scheduled for 5 November 2015 during which the worker could raise her concerns about the actions and behaviours of Mr Williams directly with him. However, just before that meeting she was handed an envelope containing a letter signed by the Principal which made allegations about the worker’s unsatisfactory conduct and behaviour. The worker described feeling dismayed that a meeting arranged to address the misbehaviour of another worker had been “turned around” to focus upon her. The worker described feeling bullied and being in tears.[9]
[8] Dolan v Department for Education and Child Development [2018] SAET 32, [14].
[9] Dolan v Department for Education and Child Development [2018] SAET 32, [16].
On 11 November 2015, the worker received another, lengthy letter which referred to the 5 November meeting as well as two reports concerning the worker’s behaviour “characterised as angry, sarcastic, rude and dismissive”. The letter concluded with a reference to the Code of Ethics for the South Australian public sector and the worker was referred to the section “Professional and Courteous Behaviour” which formed part of Professional Conduct Standards. The worker was warned by this letter that, if she failed to comply with the Principal’s directions, that may result in her being liable for disciplinary action in accordance with the Public Sector Act 2009 (SA).[10]
[10] Dolan v Department for Education and Child Development [2018] SAET 32, [17]-[20].
The worker described “utter disbelief” on reading this letter. There was an interaction with Mr Williams the following day which the worker found “offensive and humiliating”. The interaction was witnessed by another worker.[11]
[11] Dolan v Department for Education and Child Development [2018] SAET 32, [21]-[22].
The worker was then asked to attend a meeting with the Principal on 3 December 2015. The worker was told about what had been observed by the other worker of the interaction between the worker and Mr Williams on 12 November 2015. It was suggested that the worker should take leave over the Christmas break, which she did until 17 January 2016. The worker described feeling “worthless and useless” during this period.

After her return from leave, the worker was again approached by the Principal regarding another meeting. The worker was told that her behaviour had not improved. The worker was handed a letter dated 18 February 2016.[12]
[12] Dolan v Department for Education and Child Development [2018] SAET 32, [23]-[24].
As will be seen, it is these letters in November 2015 and February 2016 which assumed some importance in the findings made at trial.
The letter dated 18 February 2016 referred to the previous letter dated 11 November 2015 and formally recorded that in IT team meetings that week the worker “had acted evasively, obstructive [sic] and unhelpfully, that she had made an insulting remark in calling Mr Williams a jerk, and that she had generally conducted herself in a manner described as petulant, blocking, sarcastic, rude, stalling and dismissive”.[13]
[13] Dolan v Department for Education and Child Development [2018] SAET 32, [25].
The letter proposed that a meeting take place the following week and that an officer from the Department’s Performance and Incapacity Unit would be in attendance. According to the trial Judge, the worker’s evidence was that she “felt gutted, got teary and said to [the Principal] you have broken me”. Within a day or two the worker stopped work and has not since returned.[14]
[14] Dolan v Department for Education and Child Development [2018] SAET 32, [25]-[26].
The expert evidence before the trial Judge from a treating psychologist and two examining psychiatrists, based on the worker’s history, emphasised what was variously described as “bullying in the workplace”,[15] being “marginalised in the workplace and unsupported by the Principal”[16] and the worker’s perception that “after 21 years she was not believed, trusted nor supported … she had been bullied and micromanaged”.[17] Whilst the diagnoses varied, the experts agreed that the worker had an adjustment disorder with anxiety, depressed mood and stress.[18]
[15] Dolan v Department for Education and Child Development [2018] SAET 32, [51].
[16] Dolan v Department for Education and Child Development [2018] SAET 32, [52].
[17] Dolan v Department for Education and Child Development [2018] SAET 32, [54].
[18] Dolan v Department for Education and Child Development [2018] SAET 32, [51], [53], [55].
Importantly, the cases pursued at trial were quite different, and relied to a significant extent on whether the worker’s evidence was or was not accepted. The Department advocated a rejection of the worker’s evidence regarding her description of her interactions with Mr Williams and how she had been treated in the workplace, generally. The Department’s case was that the worker’s psychiatric injury was caused by the letter dated 18 February 2016 which was reasonable action taken by the employer in a reasonable manner and which could not therefore be used to found a work injury claim by reason of s 7(4) of the Act.
For the worker, it was submitted that the worker’s symptoms commenced during October 2015 and, between November 2015 and February 2016 there had been a gradual build-up of symptoms caused by tensions in the workplace. Nonetheless, these tensions in the workplace commenced well before Mr Williams was appointed because there were issues about whether the ICT was running efficiently and Mr Williams’s appointment was “motivated by lessening the workload and the burden” on the worker.[19] Rather than being caused by any administrative action, the worker’s case was that tensions in the workplace created adverse relationships and that employment was the significant contributing cause of the worker’s psychiatric injury which was not wholly or predominantly caused by any “disqualifying factors”. Alternatively, the worker submitted that the actions of the Department between November 2015 and February 2016 were not reasonable because the worker should have been addressed “in an informal way” and the last letter was “too heavy handed”.[20]
[19] Dolan v Department for Education and Child Development [2018] SAET 32, [63]-[66].
[20] Dolan v Department for Education and Child Development [2018] SAET 32, [67]-[70].
The findings made at trial
The trial Judge preferred the evidence of Mr Williams to that of the worker. The trial Judge found that the evidence given by the worker and the history she gave to the experts “reflected her erroneous perception of events and was influenced by her ruminations and reconstruction”.[21] Although the worker had some “behavioural issues” before Mr Williams was appointed, she was able to keep working.[22]
[21] Dolan v Department for Education and Child Development [2018] SAET 32, [71]-[72].
[22] Dolan v Department for Education and Child Development [2018] SAET 32, [73].
The trial Judge found that it was significant that “things began to unravel following the meeting in November 2015” and that it was only “following the receipt of the letter in February 2016 [that] Ms Dolan was unable to work”.[23] The trial Judge found:[24]
I am satisfied that the meetings in November 2015, December 2015 and February 2016 and the letters dated 5 and 11 November and 18 February 2016 were the predominant causes of Mr Dolan’s psychiatric injury. All concern actions that comprise of actions to counsel and discipline for the purposes of s 7(4) of the Act. They are therefore potentially disqualifying actions.
[23] Dolan v Department for Education and Child Development [2018] SAET 32, [74].
[24] Dolan v Department for Education and Child Development [2018] SAET 32, [74].
The trial Judge reminded himself that, when determining whether the Department’s conduct was reasonable, “the test is not [a] counsel of perfection”, and an employer’s actions are not to be judged as unreasonable merely because an employee has become stressed and unwell.[25]
[25] Dolan v Department for Education and Child Development [2018] SAET 32, [75], citing Li v Department of Health and Ageing [2016] SAET 40, [166].
The trial Judge found that the worker’s behaviour constituted misconduct and warranted “counselling and disciplining”. Nonetheless, the worker’s history included personal circumstances which were described as “difficult” because of a failed marriage and an abusive former domestic partner. In these circumstances, the trial Judge found that:[26]
The Department would have been incredibly insensitive not to have appreciated that Ms Dolan would have found Mr Williams’ appointment particularly challenging. It should have been aware that this was likely to cause her to have negative thoughts and feelings, including a sense of job insecurity and a lack of appreciation.
…
Having regard to these matters, for Ms Abbott to be providing Ms Dolan at this time with formal letters that made reference to the Code of Ethics for the South Australian Public Sector, the potential for disciplinary action being taken in accordance with the Public Sector Act and advising that an officer from the Department’s Performance and Incapacity Unit would be in attendance at a subsequent meeting was excessive. These were not reasonable actions taken in a reasonable manner.
[26] Dolan v Department for Education and Child Development [2018] SAET 32, [79]-[80].
It is significant that this view of the case was never put directly to the Principal, or indeed any other witness for the Department, in cross‑examination. None of the experts was asked to express a view about an alternative history: that is, assuming that the worker’s evidence was set to one side, what was the effect, if any, of the receipt of “formal letters”? The experts were not asked to comment upon the likely effect of “counselling and disciplining” the worker, even if the formal letters were not delivered. The potential involvement of an officer from the Performance and Incapacity Unit was not addressed in evidence at all.
These difficulties emerged during the hearing of the appeal in response to questions from the Court. It is significant that the particular finding made by the trial Judge was not actually sought by the worker. As has been seen, the worker’s primary case was that her psychiatric injury was caused by tensions in the workplace. The worker’s alternative case did not target all of the formal letters given to the worker, and certainly did not criticise any particular passage in any of them. Importantly, the alternative case did not feature in the conduct of the trial and was confined to a submission made in final address at a very high level of abstraction.
The appeal to the Full Bench
On the appeal to the Full Bench, the Department raised 10 grounds of appeal. None of them raised the difficulty that the finding made by the trial Judge, with respect to him, was made without significant regard to the conduct of the trial. In so far as the finding was made without giving the Department an opportunity to be heard on the significance of the formal letters, it was made, on the face of it, without affording the Department procedural fairness.
Rather, the grounds of appeal concentrated, broadly, on two matters. The first concerned whether the trial Judge erroneously applied what was described as “a subjective test of the worker’s personal circumstances” in connection with s 7 of the Act.[27] The second matter was whether the trial Judge had failed to give adequate reasons for the finding that giving formal letters referring to the Code of Ethics was unreasonable.[28] The Department also complained that the trial Judge made findings “unsupported by the evidence”.
[27] See for example Appeal Ground 1, Case Book Volume 1, page 32.
[28] See for example Appeal Grounds 3 and 5.
The worker filed a Notice of Alternate Contention complaining that the trial Judge had failed to apply the reasoning of the majority of the Full Court in Department for Health v Li, in so far as the trial Judge did not make findings about workplace stressors which did not constitute administrative action but which were nonetheless a significant contributing cause of her psychiatric injury.[29]
[29] Department for Health v Li (2018) 130 SASR 578 (Kourakis CJ, Stanley and Bampton JJ).
In the Full Bench, the first complaint was rejected on the basis that the authorities had, for some considerable time, accepted that an employer must consider a worker’s individual characteristics and susceptibilities when formulating administrative action.[30] The Full Bench found:[31]
… it was proper for the Judge to consider the reasonableness of the actions taken by the Department to counsel and discipline Ms Dolan, and the manner in which those actions were taken, by having regard to Ms Dolan’s employment and personal history, including events which were known to the Department to have negatively impacted on her ability to work with others, and which caused her to have negative feelings, a sense of job insecurity, and a lack of appreciation.
[30] Department for Education and Child Development v Dolan [2019] SAET 166, [60]-[62], citing Mitsubishi Motors Australia Ltd v Lupul [2004] SAWCT 130, [22], [26]; Rukavina v Bridgestone Australia [2005] SAWCT 79, [50] (Hannon DPJ); Farrell v Department for Child Protection [2018] SAET 51, [52]-[53] (Lieschke DPM); Department for Health and Ageing v Li (2018) 130 SASR 578, [9] (Kourakis CJ): “personal and cultural circumstances”.
[31] Department for Education and Child Development v Dolan [2019] SAET 166, [63].
That conclusion is not now challenged. As for the adequacy of the reasons, the Full Bench found:[32]
Reading the reasons of the Judge constructively and as a whole, it is plain that he took the view that, in dealing with the misconduct of Ms Dolan, the Department ought to have taken into account that she had been subjected to a variety of personal and work stressors over a lengthy period of time. It is clear that the Judge took the view that these stressors had a negative effect on Ms Dolan, and caused insecurity and a sense of lack of appreciation. In my view it can be readily inferred that the Judge thought a more nuanced and less formal approach ought to have been taken in the Department’s dealings with Ms Dolan at and following the meeting on 5 November 2015. It can be inferred that the Judge took the view that, despite Ms Dolan not having responded satisfactorily to the discussion on 5 November 2015, or to the directions given in the letter of 11 November 2015, the extent and nature of her ongoing misconduct and lack of response had not reached the stage by February 2016 where the formal procedures which were invoked were warranted or reasonable having regard to all of the circumstances. It can be inferred that he considered that the invocation of formal procedures and documentation at that time should have been understood by a reasonable employer to be unnecessary and to be potentially counter-productive.
[32] Department for Education and Child Development v Dolan [2019] SAET 166, [70].
On the question whether there was an evidentiary basis for a factual finding regarding the worker’s conduct, the Full Bench dismissed this as a complaint about a factual finding which gave rise to no question of law.[33]
[33] Department for Education and Child Development v Dolan [2019] SAET 166, [75], citing Local Government Workers Compensation Scheme v Bosson [2016] SAET 14, [27]-[28].
The appeal to this Court
Before this Court, the Department relied on essentially two grounds of appeal. The first concerned whether the trial Judge’s reasons were inadequate, attacking that part of the Full Bench decision set out above.
The second ground of appeal concerned the absence of factual findings to support the conclusion that those parts of the conduct of the Department in disciplining and counselling the worker which were reasonable were not the predominant causes of the worker’s psychiatric injury. This ground of appeal relied upon the following passage from the reasons of Bleby J in Keen v Workers Rehabilitation and Compensation Corporation:[34]
A question arises as to whether the onus will be discharged if the worker merely proves that the disability arose wholly or predominantly from administrative action which is unreasonable in some respect, it being no necessary connection between the unreasonableness of the action and the worker’s disability. Will the onus be discharged if the administrative action were taken in an unreasonable manner, but the unreasonable manner had merely a marginal connection with the disability? In other words, must there be a connection between the unreasonableness (whether of the action or of the manner in which it is taken) and the disability? It is unlikely that Parliament intended that a worker should succeed … merely because the employer took action in an unreasonable manner, which unreasonable manner had no material effect on the worker’s disability …
[34] Keen v Workers Rehabilitation and Compensation Corporation (1998) 71 SASR 42, 57-58 (Bleby J, with whom Cox J agreed).
The worker opposed this ground, even though the Department had been given leave to pursue it, because it could have been the subject of evidence at the trial.[35] Whilst this issue is of some importance, it is undesirable to rule on it where the questions highlighted in this passage from Keen were not addressed in the evidence at trial, and the appeal should otherwise be allowed and the matter retried. Whilst submissions were directed to whether this ground could be considered where it had not been raised before the Full Bench, those submissions were also relevant to the issue of procedural fairness.
Disposition of the appeal
[35] Wheeler v State of South Australia (2012) 114 SASR 111, [48] (White J, with whom Sulan and Nicholson JJ agreed).
Adequate reasons
Whilst reasons must be read in their entirety and fairly, it is essential that they be considered in the context of the manner in which the trial was conducted, having regard to what was in issue between the parties.[36]
[36] Resi Corp v Munzer [2016] SASCFC 15, [71] (Lovell J, with whom Sulan and Stanley JJ agreed); Amaca Pty Ltd v Werfel [2020] SASCFC 125, [20] (Kourakis CJ, Nicholson and Livesey JJ).
It may readily be accepted that, in many cases involving the question whether administrative action was reasonable, or taken in a reasonable manner, the practical assessment required of the Court does not demand complex or lengthy reasoning.[37] Indeed, in many cases the reasoning need only be brief where, having made the necessary underlying factual findings, the Court is effectively required to explain its ultimate preference for the case of one party over the other.
[37] Advertiser Newspaper Ltd v McAllister [2010] SASCFC 32, [25], [29] (Doyle CJ).
That is not this case. In this case, the trial Judge’s conclusion did not directly engage with the cases presented. The worker did not suggest that the use of all of the formal letters and the proposed attendance of an officer from the Performance and Incapacity Unit was unreasonable. In those circumstances, it was necessary for the reasons to clearly articulate precisely how the counselling and disciplining which was warranted by the worker’s ongoing misconduct could and should be addressed informally, notwithstanding the worker’s relevant personal and work circumstances. In DL v The Queen it was explained that:[38]
At one extreme, reasons for decision will not be inadequate merely because they fail to address an irrelevant dispute or one which is peripheral to the real issues. Nor will they be inadequate merely because they fail to undertake “a minute explanation of every step in the reasoning process that leads to the judge’s conclusion”. At the other extreme, reasons will often be inadequate if the trial judge fails to explain his or her conclusion on a significant factual or evidential dispute that is a necessary step to the final conclusion. In between these extremes, the adequacy of reasons will depend upon an assessment of the issues in the case, including the extent to which they were relied upon by counsel, their bearing upon the elements of the offence, and their significance to the course of the trial …
[38] DL v The Queen (2018) 266 CLR 1, [33] (Kiefel CJ, Keane, Edelman JJ).
As the reasons of the Full Bench demonstrate, the ultimate conclusion that the use of formal letters and the proposed involvement of a Department officer was unreasonable could not be supported without making at least three inferences, concerning matters which were neither obvious nor uncontentious. They are certainly not otherwise addressed in the reasons or in the evidence and contentions of the parties described in those reasons. That the trial Judge did not explicitly address these matters, and that the Full Bench found it necessary to supply a number of inferences, tends to expose the existence of lacunae in the reasoning process employed to reach the ultimate conclusion in this case.
The first of these is the inference that “a more nuanced and less formal approach ought to have been taken” to the Department’s “dealings with Ms Dolan at and following the meeting on 5 November 2015”. This suggests an issue with the conduct of the meeting and not merely the use of the formal letter. The trial Judge seems to have criticised the letter and the involvement of an officer from the Performance and Incapacity Unit (which was an issue that was not targeted by the worker). Just what “a more nuanced and less formal approach” at the meeting on 5 November would entail is not clear. Associated with this inference is the implication that the letter dated 11 November need not have been used either. Precisely how the employer could afford the worker procedural fairness without a written warning of the possible implications of continued misbehaviour is unclear. What other form the letters might take is likewise unclear. That is particularly problematic because the letters appear to have been relatively standard and the content of an alternative response or letter is far from clear or obvious. Certainly, the potential alternatives were not addressed in evidence.

The second inference is that, despite the discussion on 5 November 2015, and the directions given in the letter dated 11 November 2015, the continued misconduct by the worker had “not reached the stage by February 2016 where the formal procedures which were invoked were warranted or reasonable”. This suggests that, though the misconduct was continuing, and may have escalated, some greater level of misconduct was required before a written warning was reasonable. This inference also suggests that, consistently with the Department’s duties to the worker and others in the workplace, something else could have been done to counsel and discipline a worker whose misconduct over a number of months was becoming increasingly difficult to manage. The potential alternatives were not addressed in evidence.
The third inference is that “the invocation of formal procedures and documentation at that time” by the Department was both “unnecessary and … potentially counter-productive”. Again, the Full Bench seems to highlight conduct apart from the letter, whereas the trial Judge only criticised the content of the letter dated 18 February 2016 and the foreshadowed attendance of an officer from the Performance and Incapacity Unit. Leaving that to one side, this inference suggests that the reasonable employer ought to have recognised that the use of the usual workplace tools of written warnings and a structured opportunity to air grievances were not only not necessary, but “potentially counter-productive”. Though this comes perilously close to a finding, by inference, that the use of the letter predictably caused psychiatric harm, there is no explanation as to why that ought to have been foreseen as the result of employing standard workplace tools and techniques. Certainly, that was never in issue on the evidence. Again, if this passage is intended to convey that what was done was unreasonable, and that there were ways of counselling and disciplining which were reasonable, those alternatives are not clear or obvious. If they had been articulated at trial, there might then have arisen questions of the kind considered in Keen, as well as the requirements of Part 7, Division 3 of the Public Sector Act 2009 (SA).
Respectfully, it is far from clear that the trial Judge had all of these inferences in mind. It may be doubted whether they were all open. And, as may be obvious, as problematic as these inferences are, without them, the reasoning employed by the trial Judge did not clearly address or explain why the Department’s conduct was both unreasonable and undertaken in an unreasonable manner. That is so whether that conduct is confined to the use of the formal letters and the proposed involvement of an officer from the Performance and Incapacity Unit, or whether it is addressed to the Department’s conduct more broadly in the period November 2015 to February 2016.
Whilst trial judges have very considerable latitude in the way in which reasons are expressed, the reasons and the reasoning must be clear having regard to the reasons, when read in their entirety, the matters in issue and the way in which the litigation was conducted.[39]
[39] DL v The Queen (2018) 266 CLR 1, [33] (Kiefel CJ, Keane and Edelman JJ); El-Masri v Molloy [2015] SASCFC 63, [30] (Blue J, with whom Kourakis CJ agreed), [237] (Bampton J, with whom Kourakis CJ agreed); Macks v Viscariello (2017) 130 SASR 1, [523] (Lovell J, Corboy and Slattery AJJ); JGS v The Queen [2020] SASCFC 48, [199]-[209] (Lovell J, with whom Peek and Bampton JJ agreed).
Having regard to the way in which this case was conducted, it is unclear why the use of standard workplace tools and techniques was unreasonable or was undertaken in an unreasonable manner. The alternative means of counselling and disciplining the worker were not addressed with any clarity. The Full Bench addressed the reasoning of the trial Judge by making a number of inferences which were not otherwise clear or apparent. The reasoning is not therefore clear.[40] In the circumstances of this unusual case, the reasons were not adequate.
[40] Fleming v The Queen (1998) 197 CLR 250, 263 [28] (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ): “there must be exposed the reasoning process…”
Procedural fairness
Where a trial court is considering whether to decide the case on a proposition which has not been the subject of contest between the parties, it is usually necessary that the parties be apprised before the decision is made so that they have an opportunity to consider the extent to which their evidence or their submissions must be supplemented.[41] In many cases, that will be raised by the Court as a potential question or a potential view, which is not a final view, before or immediately after the hearing concludes. The parties will usually need time to reflect on the Court’s view, obtain instructions and consider their respective responses. That may require that the case be reopened and some witnesses recalled, in order to address the implications of the trial court’s preliminary view.
[41] State Government Insurance Commission v Stead (1986) 161 CLR 141.
At the least, in this case that would have required that the Department’s use of formal letters and the proposed involvement of an officer from the Performance and Incapacity Unit, and the extent to which there could have been disciplining and counselling of the worker without these techniques, be addressed in cross-examination of the Principal, and probably also the experts on the question of causation. That was not done.
In the circumstances, there appears to have been a denial of procedural fairness and the Department was “deprived … of the possibility of a successful outcome”. It cannot be said that further evidence or submissions from the Department “could have made no difference to the result”.[42]
[42] State Government Insurance Commission v Stead (1986) 161 CLR 141, 147 (Mason, Wilson, Brennan, Deane and Dawson JJ).
During the hearing before this Court, the Department raised this issue, even though it had not been agitated before the Full Bench. The parties were given an opportunity to make further submissions.
Although the worker did not contest that there had been a denial of procedural fairness, as the trial Judge’s decision was made “on a basis that did not align to the case presented by either party at trial”,[43] she contended that this could not be done, relying on ss 26I and 67 of the South Australian Employment Tribunal Act 2014 (SA), and the need to show an error of law made by the Full Bench.
[43] Worker’s Supplementary Written Submissions dated 17 April 2020, [14].
Whilst the worker also invoked the prohibition against raising new points on appeal,[44] suggesting that she might have been led further evidence to address the issue concerning reasonable action taken in a reasonable manner,[45] that submission tends to reinforce the point already made: the basis on which the trial Judge decided the case was not addressed by the parties in their evidence or submissions at trial.
[44] Citing Water Board v Moustakas (1988) 180 CLR 491, 496-497 (Mason CJ, Wilson, Brennan and Dawson J).
[45] Worker’s Supplementary Written Submissions dated 17 April 2020, [13].
It may be accepted that trial Judges have considerable latitude about the way in which a decision is made. Judges are never constrained to simply accept or reject a case presented by the parties. Whether a case is advanced by a party, or within the scope of what has been advanced, may sometimes call for a fine judgment. Generally, however, it will be clear. What is in contest is usually apparent from the pleadings, or a statement of the issues, or at least the way in which the litigation was conducted. Parties cannot complain if a decision is made within the scope of what was in contest, even if the decision does not align exactly with the case of any party. To be clear, this is not a case where the parties were in dispute about a proposition or a series of propositions, each taking extreme positions and requiring that the trial Judge decide whether to accept either of those positions or, indeed, an intermediate position. In that kind of case, the parameters of the disputed proposition or a series of propositions are clear and the parties are able to address the potential outcomes. This case is different. In this case, the decision did not correspond with the cases made and pursued by either party at the trial, or any intermediate case which was within the scope of what was in contest on the evidence.
In any event, the real issue is whether the Department can take a point which was open to be raised, but not raised, in the Full Bench.
A party can, on occasion, take a point which was open to be raised, but not raised, in the Full Bench. As was explained in Crampton v The Queen:[46]
The process of reviewing the final determination of the Court of Criminal Appeal, which was a judgment, in the light of the material that was before that Court, is strictly appellate, notwithstanding that a new legal issue is permitted to be raised in this Court. Error in a final determination does not necessarily involve error in the process of reasoning of the court.
[46] Crampton v The Queen (2000) 206 CLR 161, [12] (Gleeson CJ).
The High Court has repeatedly emphasised the scope to address error in an intermediate appellate decision even where the relevant ground was not raised before the intermediate appellate court and it is raised for the first time in that Court.[47] Whilst there are obvious differences between the roles of an intermediate appellate court and the High Court as the final court of appeal in Australia,[48] the scope to press a point not made before a previous appeal court does not in this case turn on those differences.
[47] Crampton v The Queen (2000) 206 CLR 161, [6]-[13] (Gleeson CJ), [47]-[57] (Gaudron, Gummow and Callinan JJ), [113]-[121] (Kirby J); Hollis v Vabu Pty Ltd (2001) 207 CLR 21, [29]-[31] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ); Minister for Immigration and Multicultural Affairs v Singh (2002) 209 CLR 533, [81]-[82] (Kirby J); Australian Competition & Consumer Commission v Flight Centre Travel Group Ltd (2016) 261 CLR 203, [62] (Kiefel and Gageler JJ).
[48] The requirement that litigants obtain special leave before they can pursue an appeal in the High Court means that, for the vast majority of Australian litigants, an appeal to an intermediate appellate court in Australia is effectively final: see Opeskin and Appleby, “Responsible Jurimetrics; A Reply to Silbert’s Critique of the Victorian Court of Appeal” (2020) 94 ALJ 923, 928.
The first issue is whether this Court has the power to entertain a point which was not raised in the first appeal. The second issue is whether the power should be exercised. Another way of expressing the first issue is whether, within the meaning of the South Australian Employment Tribunal Act 2014 (SA) the “decision” of the Full Bench is affected by error on a question of law:[49]
… an appeal lies on a question of law against a decision of the Full Bench of the Tribunal (including a Full Bench of the South Australian Employment Court) to the Court of Appeal.
[49] Section 68(1) of the South Australian Employment Tribunal Act 2014 (SA).
That does not necessarily depend on showing error in the reasons of the Full Bench. The term “decision” is defined so as to include:
… a direction, determination or order of the Tribunal but, in prescribed circumstances, does not include an interlocutory direction, determination or order …
Accordingly, for the purposes of an exercise of the statutory appeal power, it is sufficient to show that the determination or order made by the Full Bench is affected by error on a question of law.[50] The relevant error for these purposes is the failure to identify and address the purported denial of procedural fairness associated with the way in which the decision was made by the trial Judge following the trial. Whether there has been a denial of procedural fairness gives rise to a question of law. Accordingly, this Court has the power to entertain the point.
[50] It may also be necessary that the party raising the point obtain leave or permission: s 68(2) of the South Australian Employment Tribunal Act 2014 (SA) refers to permission rather than leave: “An appeal cannot be commenced under this section except with the permission of the Court of Appeal”.
Naturally enough, the power to be exercised by this Court must be exercised judicially having regard to accepted principles.
The Court will only entertain a new point on appeal in exceptional circumstances.[51] Parties are ordinarily bound by their conduct of the litigation, whether at trial or on appeal. The Court may decline to entertain the point if it appears that it was not raised for some form of forensic or other tactical advantage.[52] There may be other good reasons to decline to entertain the point, particularly where there has been an opportunity to raise it and entertaining it for the first time in this Court may cause injustice. A well-recognised example of that kind of case is where the point might have been met by further evidence at trial.[53] In most cases, the strength of the point will also have a bearing on whether it should be entertained.
[51] Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, 438; University of Wollongong v Metwally (No 2) (1985) 60 ALR 68, 70-71; Coulton v Holcombe (1986) 162 CLR 1, 7-8; Water Board v Moustakas (1988) 180 CLR 491, 496-497.
[52] Crampton v The Queen (2000) 206 CLR 161, [7], [10] (Gleeson CJ).
[53] Coulton v Holcombe (1986) 162 CLR 1, 7-8.
Notwithstanding the exceptional nature of the exercise of the power to entertain a new point on appeal, it is also well-recognised that where the point is a question of law which could not have been met by further evidence, it will often be entertained:[54]
When a question of law is raised for the first time in a court of last resort, upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is not only competent but expedient, in the interests of justice, to entertain the plea. The expediency of adopting that course may be doubted, when the plea cannot be disposed of without deciding nice questions of fact, in considering which the Court of ultimate review is placed in a much less advantageous position than the Courts below. But their Lordships have no hesitation in holding that the course ought not, in any case, to be followed, unless the Court is satisfied that the evidence upon which they are asked to decide establishes beyond doubt that the facts, if fully investigated, would have supported the new plea.
[54] Connecticut Fire Insurance Co v Kavanagh [1892] AC 473, 480 (Lord Watson), approved in Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, 438.
There are examples of this approach having been taken in this Court, including on a second appeal.[55] In many cases where a new point is entertained for the first time on a second appeal, there will be a costs consequence, particularly if, had the point been raised earlier, it would likely have rendered the second appeal to this Court unnecessary.
[55] Battye v Shammall (2005) 91 SASR 315, [20]-[22] (Doyle CJ), [28] (Duggan J), [49] (Gray J); Wheeler v State of South Australia (2012) 114 SASR 111, [50] (White J, with whom Sulan and Nicholson JJ agreed).
There was no discernible tactical advantage to be gained in not raising the point about procedural fairness before the Full Bench. The issue could not have been met by evidence at trial because the parties did not know the basis for the trial Judge’s decision until after he delivered his reasons. And, the point is a strong one which was effectively conceded by the worker. Allowing the Department to raise the question of procedural fairness for the first time in this Court causes the worker no injustice.
In the circumstances, if the trial Judge’s reasons were adequate and the Full Bench made no error in saying so, I would give the Department leave to raise this procedural fairness issue as a new ground of appeal.
Conclusion
The decisions of the Full Bench and the trial Judge must be set aside and the matter remitted to the Tribunal so that it may be re-tried before a different Judge.