Australian Offshore Services v Collins (1996)

(FC 1023/96, 22/11/96)

O’Loughlin J

REASONS FOR JUDGMENT

The applicant in these proceedings, Australian Offshore Services, appeals against a finding of the Administrative Appeals Tribunal ("the Tribunal").  The effect of the finding was that the applicant was liable, as from 25 February 1995 until otherwise determined, to pay compensation to its former employee, John Collins, the respondent.

Mr Collins suffered a compensable injury on 19 October 1993.  On that day he was working in the employ of the applicant as a seafarer on the vessel "Far Sword".  He slipped on a hammer, injuring his right knee and his back.  On 29 December 1993 he left the employ of the applicant and in mid-February 1994 he took up employment as a seafarer with R W Miller & Co (SA) Pty Ltd on board the vessel "Island Seaway".  Mr Collins continued in that employment until about 17 May 1994 when he was certified incapacitated for work.  He claimed and was paid compensation by the applicant from this date, pursuant to the Seafarers Rehabilitation and Compensation Act 1992 (Cth).

On 21 February 1995 the applicant to wrote Mr Collins informing him that, as a result of medical assessment, the applicant considered Mr Collins had made a recovery from his injuries.  He was told that he was considered fit to resume his pre-injury employment and that payments of compensation would cease as of 24 February 1995.  Mr Collins sought a reconsideration of the applicant's decision but, in due course, it was affirmed.  That last mentioned decision led to Mr Collins successfully seeking a review by the Tribunal.  The Tribunal set aside the decision of the applicant and ordered that the applicant pay Mr Collins the compensation due from 25 February 1995.

An incident occurred in April 1994 which is now at the centre of this appeal.  The applicant has claimed in par 4.2 of its Notice of Appeal that as a result of the incident Mr Collins:-

"... injured his back at work on the "Island Seaway" when employed by R W Miller & Co (SA) Pty Ltd of Port Adelaide and his incapacity to work resulted entirely from trauma sustained whilst (Mr Collins) was working for that employer on the "Island Seaway"".

The Tribunal, however, in finding in favour of Mr Collins, attributed cause exclusively to the accident that occurred on the "Far Sword" on 19 October 1993.  After finding that, as a result of the fall in October 1993, he had been left with a "mild residual disability amounting to a small loss of function of the right lower limb as a whole which is permanent", the Tribunal dealt with the injury to Mr Collin's back in these terms:-

"In falling, the applicant also permanently injured his lower back to the extent that there was damage to the annulus fibrosis or outer coating of the lumbar disc (L4/5).  This injury, which arose in the course of his employment with the respondent, was such as to produce an increased and permanent susceptibility to further episodes of trauma in the future.  The injury permanently weakened the applicant's back and in so doing, it was instrumental in the development of a significant bulge at L4/5 which in turn resulted in more consistent lower back pain for the applicant.

The symptomatology which the applicant outlined in his evidence before the Tribunal was brought about by the injury he sustained to his lower back on 19 October 1993.

The back and knee injuries which the applicant suffered resulted in an incapacity for work."

In making those findings, the Tribunal made no mention, in that section of its reasons, of the incident on the "Island Seaway" in April 1994.  This led the applicant to submit, in its Notice of Appeal, that there had been an error of law in that the Tribunal had failed to comply with the requirement of sub-ss 43(2) and (2B) of the Administrative Appeals Tribunal Act 1975 (Cth).  Those provisions are as follows:-

"(2) Subject to this section and to sections 35 and 36D, the Tribunal shall give reasons either orally or in writing for its decision.

(2A) ...

(2B) Where the Tribunal gives in writing the reasons for its decision, 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."

In submissions before the Tribunal, counsel for the applicant had accepted that Mr Collins had a back condition but he submitted that there should be a finding that "it is more probable than not that the incident that gave rise to this is a trauma that happened at some stage whilst he was at work, after he started working for the Island Seaway."

It is the case for the applicant on this appeal that the submission that had been made to the Tribunal had been ignored by the Tribunal.  In sub-par 4.3 of its Notice of Appeal the applicant has complained that:-

"4.3. Apart from referring to this submission in passing the Tribunal failed to mention the submission advanced, consider it or give reasons for dismissing it.  The submission or contention was one worthy of serious consideration and was seriously advanced to the Tribunal and the Tribunal had therefore overlooked the submission and accordingly an error of law had occurred."

The Tribunal did not wholly ignore the April 1994 incident.  Before stating its findings it said:-

"In relation to his back, the applicant gave evidence that after the fall on the "Far Sword" and prior to his employment on the "Island Seaway" he had experienced "little twinges" from time to time which got worse but which he attributed to having a cold in the kidneys because the pain was very similar to that encountered in his childhood which was described in those terms by his parents.  These twinges got "a little sorer" whilst the applicant was on board the "Island Seaway" and then in April 1994 whilst attending a union meeting on board, he experienced very severe pain to his lower back in the L4/5 region which radiated to the back of the left thigh and calf down to the left foot and big toe.  The pain caused nausea.  The pain was such that he could not stand.  After an initial medical examination, the applicant was seen by his general practitioner, Dr Chia.  On completion of a rehabilitation program of approximately three months, the applicant found and still finds that he is unable to sit for extended periods of time without developing a great deal of pain to his lower back and he is unable to participate in a range of activities, particularly heavy lifting and gardening.  Nor can be perform the duties formerly associated with being a seafarer."

At a later stage in its reasons the Tribunal, when considering the submissions that had been advanced on behalf of the applicant regarding the incident on the "Island Seaway" in April 1994, said:-

"The (applicant) submitted that the incident on 19 October 1993 was causative of an injury to (Mr Collin's) right knee and nothing else.  Alternatively it was submitted that if (Mr Collins) sustained an injury to his back on that occasion then it was a very minor injury which rectified itself.  The (applicant) further submitted that the incapacity, which (Mr Collins) described in his evidence and which is accepted by the (applicant) came about because of trauma sustained whilst (Mr Collins) was working on the "Island Seaway", not when employed by the (applicant).

The (applicant) submitted the trauma on the latter vessel was caused by (Mr Collins) leaning against a wall, that it was work related and led to (Mr Collins) present incapacity which is compensable under the Act but that (Mr Collins) was not at that time employed by the (applicant).

The (applicant's) submissions included references to the evidence which it asked the Tribunal to accept and from which it urged the Tribunal to affirm the decision under review."

There are many authorities of this Court that warn against an over- zealous exercise in reviewing the language used by a Tribunal: Lennell v Repatriation Commission (1982) 4 ALN 29: see also Bisley Investment Corporation Ltd v Australian Broadcasting Tribunal (1982) 59 FLR 132 at 157 per Sheppard J, Federal Commissioner of Taxation v Cainero (1988) 88 ATC 4427 at 4432 per Foster J and Politis v Federal Commissioner of Taxation (1988) 88 ATC 5029 at 5032 per Lockhart J.

It is also necessary to bear in mind that the Tribunal was the judge of the facts and that its decision is not to be set aside unless it is shown that there has been an error of law.  Thus in Puhlhofer v Hillingdon London Borough Council [1986] 1 AC 484 at 518, Lord Brightman, with whom the other members of the House agreed, said:-

"Where the existence or non-existence of a fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debatable to the just conceivable, it is the duty of the court to leave the decision of that fact to the public body to whom Parliament has entrusted the decision- making power save in a case where it is obvious that the public body, consciously or unconsciously, are acting perversely."

See also Apthorpe v Repatriation Commission (1987-88) 77 ALR 42 at 53-4 and Hooke v Repatriation Commission (unreported, Full Court of the Federal Court of Australia, 11 February 1988).

Counsel for the applicant submitted that the Tribunal failed to consider, or, at least, failed to consider adequately the principles enunciated by the Full Court of this Court in Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267.  In that case a Mr Eastgate had acquired 50% of the issued shares in the capital of Prestige Furniture Co Pty Ltd.  His case was that he had transferred them to the applicant, a shelf company, so that it would hold them in trust for him.  However, the relevant agreement referred to a sum of money as "the consideration for the sale of the said 1900 shares".  The applicant subsequently sold the shares to a third party.  Having regard to the consideration expressed in the agreement pursuant to which the application acquired title to the shares, there was a substantial profit on resale.  The Commissioner assessed this profit to tax pursuant to the provisions of s 26(a) of the Income Tax Assessment Act 1936 (Cth).  On a review of the Commissioner's decision, the Administrative Appeals Tribunal affirmed the decision and the applicant appealed therefrom.

Two particular arguments that were advanced on behalf of the applicant before the Tribunal were not mentioned in the Tribunal's reasons.  The first of these was to the following effect: the shares which Mr Eastgate held in Prestige before he acquired the applicant as a shelf company remained in his beneficial ownership until they passed to the third party who purchased them from the applicant.  The second submission that was put before the Tribunal but not mentioned by it was as follows: the Tribunal erred in law in failing to consider whether in calculating any profit to be included in the applicant's assessable income it should have taken into account the true value of the shares at the date of acquisition: (there was evidence pointing to the shares having a value in excess of that expressed as the consideration in the agreement between Mr Eastgate and the applicant).

Jenkinson J delivered the principal judgment of the Court in Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (supra); Woodward and Foster JJ agreed with his orders and reasons.  As to the first submission, Jenkinson J said:-

"... I doubt whether the failure of the tribunal to discuss the contentions specified therein can justify an inference that the tribunal failed to consider those contentions.  Those reasons include a careful and detailed discussion of the evidence concerning the making of the agreement for sale of the shares by Mr Eastgate to the applicant.  That discussion and the conclusions stated in the reasons might, as I think, have been regarded by the tribunal as a clear, if implied rather than express, contradiction of each of the contentions specified in that ground."(p275)

But the Tribunal's failure to consider the second submission brought about a different result.  As to that Jenkinson J said:-

"It was common ground that the submission was made to the tribunal that, in ascertaining whether the applicant had gained a "profit", within the meaning of that word in either s 26(a) or s 26AAA(2), on the sale of the shares to Hookway Aviation Pty Ltd, and in ascertaining the amount of that profit, there should be deducted from the proceeds of the sale not only the price agreed by the applicant to be paid to Mr Eastgate for the shares but also the amount by which the value of the shares, at the time the applicant purchased them, exceeded that price.  The submission was grounded on contentions that the value in fact exceeded that price by a very substantial amount and that, because Eastgate owned beneficially all the shares in the applicant, any price which might have been agreed, whether $1 or $1 million, would have been - as the price in fact agreed was, according to the submission - lacking in economic reality.

...

The reasons of the tribunal for its decision are devoid of reference to the submission, and devoid of reference to the question of fact as to the value of the shares.

Section 43(2) of the Administrative Appeals Tribunal Act 1975 required that, subject to certain restrictions not presently relevant, the tribunal should give reasons in writing for its decision, and that the reasons should include its findings on material questions of fact.

In the particular circumstances of this case the evidence probably could support either a finding that the value of the shares at the time the applicant bought them did not substantially exceed the price the applicant agreed to pay for them or a finding that Mr Eastgate and Mr Sellen believed at that time that the value did not substantially exceed the price. If the tribunal made either of those findings, or if the tribunal was unable to find the contrary of one or the other of those findings, it may be that it decided no question of law contrary to the submission advanced to it on the applicant's behalf, or any rate contrary to so much of the submission as this court might be prepared to accept.  Therefore, if the applicant's submission, or a modification of that submission, were held by this court to be correct in point of law, the failure of the tribunal to mention either the submission or the questions of fact about value to which I have referred would leave this court and the parties unable to determine whether, on the one hand, error of law and vitiated the tribunal's consideration of the submission or, on the other hand, the submission had availed the applicant nothing because the factual basis on which it rested had not found acceptance by the tribunal."(pp275-276)

Jenkinson J went on to point out that not every failure by the Tribunal to mention a contention that has been advanced by a losing party will amount to a failure to comply with the requirements of s43(2) of the Administrative Appeals Tribunal Act 1975 (Cth), or demonstrate that the contention was not considered in aiding the matter before the Tribunal.  But, in circumstances of the case that was under consideration his Honour concluded:-

"But this submission concerning the ascertainment of profit was worthy of serious consideration and was seriously advanced to the tribunal. It ought, therefore, to be inferred that the submission was inadvertently overlooked by the tribunal either when the reference was being decided or when the reasons for the decision were being committed to writing (cf Sullivan v Department of Transport (1978) 20 ALR 323 at 353).  In either event there has been, in my opinion, an error of law by the tribunal, so that the power of this court which s 44(1) of the Administrative Appeals Tribunal Act 1975 confers to decide the appeal "on a question of law" is available."(pp276-277)

It is apparent from a consideration of these passages that Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (supra) is not authority for a bold proposition that the Tribunal will err in law if it fails to consider in its reasons any and every submission that is made to it.  Obviously, the nature of the submission and its application to the circumstances of the particular case are to be critically assessed.  It is not necessary for an appeal Court to make a specific finding that the submission would have brought about a different result.  In fact, to do so would be to encroach upon the responsibilities of the Tribunal.  It will be sufficient if the Court can perceive, as Jenkinson J said, that it is a submission "worthy of serious consideration".

How then does the decision in Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (supra) affect the present appeal?  In the first place, it cannot be said, as was the case in Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (supra), that the Tribunal's reasons were "devoid of reference" to the submission.  I have already identified the two passages in the Tribunal's reasons where reference was made to the incident on the "Island Seaway".  Those references made it clear that the Tribunal had not overlooked the issue or the submission that had been made in respect of the issue.

It should not be thought that the Court will only intervene in cases (such as Dennis Willcox (supra)) where the Tribunal wholly fails to address an issue that is of substance.  The power to intervene will exist in those cases where, notwithstanding recognition of a submission that is worthy of consideration, the Tribunal fails to give its reasons, fails to set out its findings on material questions of fact or fails to refer to the evidence or other material on which those findings were based.

Sullivan v Department of Transport (1978) 20 ALR 323 was a case where the Tribunal had adverted to a relevant issue but in a manner that was insufficient to satisfy the requirements of s 43(2) of the Administrative Appeals Act 1975 (Cth).  Deane J said:-

"That passage does not clearly indicate whether the Tribunal ever directed its attention to the considerations relevant to the determination of the question whether conditional licences should issue in the particular circumstances of the particular case ..."(p348)

Australian Postal Corporation v Lucas (1991) 14 AAR 487 is an example of an extensive discussion by the Tribunal of conflicting medical evidence but Burchett J felt compelled to conclude that the discussion was inadequate as the Tribunal had "failed to make those findings on material questions of fact which would have enabled its reasoning process to be understood." (p495).

The applicant faced a further difficulty in its challenge to the Tribunal's reasons.  Its medical expert, Dr Sorby-Adams advanced the proposition that it was not the incident on the "Far Sword" that caused injury or pain to Mr Collin's back; he was of the opinion that Mr Collin's problems arose out of an old pre 1993 injury.  This evidence was in direct conflict with that of Dr Byrne who gave evidence on behalf of Mr Collins.  The Tribunal considered the conflicting medical opinions, summarising what each of the experts had said and concluding, with reasons, why it rejected the opinion of Dr Sorby-Adams in favour of the views of Dr Byrne.  The opinion of Dr Byrne was clearly stated in the following answer in cross- examination:-

"What I am saying is that this man on 19 October, 1993 incurred an acute injury to the low back to the extent that there was probably some local damage inflicted on the annulus fibrosis or outer coating of the lumbar disc which subsequently developed into a significant bulge as shown on the CAT scan six months later and which subsequently produced more consistent low back pain that he then complained of."(AB98-99)

The acceptance by the Tribunal of this evidence amounts, in my view, to a total rejection that there was or might have been any trauma that was causative of his disability in April 1994.  Indeed, counsel for the applicant was unable to point to any passage in the evidence which would have suggested an incident or movement capable of producing trauma.  Undoubtedly, Mr Collins suffered back pain in the course of his employment in April 1994 but the medical evidence that was accepted by the Tribunal identified the pain as relating back to his fall on 19 October 1993.

No doubt, the language of the Tribunal might have been better expressed.  It could be said that its acceptance of Dr Byrne's evidence on causation meant that it rejected the applicant's submissions with respect to the incident on the "Island Seaway".  All too often the wisdom of hindsight encourages such observations.  But a fair and reasoned reading of the whole of the Tribunal's reasons leaves no room for doubt.  The Tribunal was alert to its responsibilities; it knew that its objective was to determine whether Mr Collin's back and leg injuries had a causative link to the events of 19 October 1993.  The Tribunal accepted Mr Collins and his wife as witnesses of truth and it preferred his medical witnesses and their evaluation to those of the applicant.  It made passing reference to the April 1994 incident but that did not deter it from making its ultimate findings.  I see no cause to interfere.  In my opinion the contents of the Tribunal's reasons amounted to a sufficient compliance with the provisions of sub-ss (2) and (2B) of s 43 of the Administrative Appeals Tribunal Act 1975 (Cth).

The appeal is dismissed with costs.