It’s gotta be little Lisa Simpson, Springfield’s answer to a question nobody asked: the Federal Court on issue estoppel in the Administrative Appeals Tribunal

On 11 April 2019, a Full Court of the Federal Court handed down judgment in The Commonwealth v Snell. The judgment is perhaps most notable for the fact that it devotes 12 very interesting paragraphs to the question whether the common law doctrine of issue estoppel applies to proceedings in the Commonwealth Administrative Appeals Tribunal, despite this being a question that neither of the parties raised and that was not the subject of any detailed submissions. The Court also considered how the text of a statutory provision under which an administrative decision falls to be made by a primary decision maker (and by the Tribunal standing in the primary decision maker’s shoes on review) may affect the capacity of the Tribunal to revisit questions of fact that it has previously determined in related proceedings.

The facts

In Snell, the respondent claimed compensation under the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (the Act) in respect of malignant melanoma, which he claimed had been materially contributed to by long-term exposure to ultraviolet light from the sun during the course of his employment aboard ships operated by the Australian National Line. He first claimed compensation in 2011, relying on evidence from two dermatologists, each of whom was of the view that long-term sun exposure had been a cause of his condition. At that time, the respondent’s claim was rejected by the Commonwealth (acting as the successor to his former employer). However, on review in the Tribunal, the parties proposed consent orders. Pursuant to these, the Tribunal decided that the respondent’s ‘solar induced skin disease’ had been ‘contributed to in a material degree by his employment’. In 2016, the respondent was diagnosed with terminal metastatic malignant melanoma and made a further claim for compensation. On this occasion, the Commonwealth obtained an opinion from another dermatologist, who referred to a recent clinical study the results of which were said to show that ‘[o]ccupational sun exposure was not positively associated with melanoma risk overall or at different body sites‘. Based on this opinion, the Commonwealth refused to accept liability for the respondent’s claim. The respondent sought review of this decision in the Tribunal.

On review, the Tribunal decided that the respondent’s current episode of malignant melanoma was part of the natural progression of his earlier episodes and that it would not revisit the question whether those episodes had been materially contributed to by his employment as a seafarer. In this regard, the Tribunal considered that the power conferred upon it by s 33 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) to control its own procedures authorised it to refuse to reconsider a factual issue that it had previously determined. The Commonwealth appealed to the Federal Court under s 44 of the AAT Act.

The legislative scheme

The Act follows a similar structure to the Safety, Rehabilitation and Compensation Act 1988 (Cth), the Commonwealth’s primary workers’ compensation statute. Both Acts follow an administrative law-based scheme that departs significantly from the judicial power-based workers’ compensation schemes that have historically been employed in the United Kingdom and the Australian States. Under a judicial power-based scheme, a compensation statute imposes liability on an employer to pay compensation in respect of an injury that bears some defined connection with a worker’s employment – the connection is usually expressed through some variation on the words ‘arising out of or in the course of’ the worker’s employment. If a worker makes a claim for compensation, the employer can accept liability for that claim and pay compensation without the need for anyone to take legal proceedings. If the employer refuses to meet the claim, the worker can commence proceedings in a court, which can determine whether the requisite connection exists between the worker’s employment and the alleged injury; if it finds that the required connection exists, the court can grant an appropriate remedy (such as a declaration to the effect that the worker is entitled to compensation). Importantly, under such a scheme, the worker’s entitlement to compensation is conceived of as arising from the terms of the compensation statute itself, not from the court’s judgment (which is merely declarative of existing rights and obligations). Subject to any specific statutory provision to the contrary, if a court decides that a worker’s injury was or was not connected with his or her employment in the required way, that decision attracts the common law doctrines of issue and estoppel and res judicata and cannot be revisited in subsequent proceedings.

The scheme of the Act operates somewhat differently. Pursuant to s 26 of the Act, an employee is entitled to compensation if he or she sustains an ‘injury’ that results in death, incapacity for work or impairment. The term ‘injury’ is defined in s 3 to include any ‘injury (other than a disease) … arising out of, or in the course of, the employee’s employment’ and any disease ‘that was contributed to in a material degree by the employee’s employment.’ Pursuant to Part 2, an employee may make a claim for compensation; if this occurs, ss 71, 72 and 73A provide that the employee’s employer must accept or deny the claim within a prescribed period. If the claim is denied, the employee may request under s 78 that the employer reconsider its decision. Crucially, s 78(1) provides that an employer may also, on its own initiative, reconsider a determination made by it with respect to the acceptance or denial of a claim. Section 88 provides that if an employer’s reconsideration of a decision does not result in a decision that is favourable to the employee, the employee may apply to the Tribunal (not a court) for review of that decision. It is the decision of the employer (or the Tribunal on review) to accept the employee’s claim that gives rise to the right to receive compensation – it is not a pre-existing statutory right the existence of which is declared following a curial determination. The role of the judicial branch of government in the scheme established by the Act is limited to hearing appeals from the Tribunal on questions of law under s 44 of the AAT Act (as well as judicial review proceedings brought pursuant to s 75(v) of the Commonwealth Constitution and s 39B of the Judiciary Act 1903 (Cth)). In this sense, the Act differs substantially from a judicial power-based scheme of workers’ compensation.

Issue estoppel: the question nobody asked

Early in its reasons, the Full Court acknowledged that neither the respondent nor the Commonwealth had made submissions on the question whether an issue estoppel can arise in respect of a factual question determined by the Tribunal in the exercise of its jurisdiction to review an administrative decision. Nevertheless, it considered that it was necessary to address this question, on the grounds that the questions of statutory interpretation agitated by the parties would not arise if the doctrine of issue estoppel applied. Further, it noted that a consideration of the doctrine of issue estoppel ‘assists in ascertaining whether any principles akin to issue estoppel might alternatively apply.’ After undertaking an extensive review of the authorities, the Court concluded that ‘the doctrine of issue estoppel is not apposite to the constitutional and statutory context of the Tribunal, and ought not to be extended to it.’ In this regard, the Court noted that the Tribunal is a forum for the review of administrative decision making, in which the Tribunal stands in the shoes of the original decision maker and makes a new decision with respect to the creation or destruction of statutory rights. While its proceedings often resemble those of a court, it is not a body that hears disputes between parties and determines the content of existing rights and obligations; indeed, as a matter of constitutional law, it cannot be invested with any such power. The extent to which it can revisit questions it has previously determined as part of the process of making a new decision is thus a matter of construing the statute under which the decision falls to be made and deciding whether it contemplates the reopening of old questions, not a matter of applying common law principles adapted to the judicial resolution of disputes.

While it is unusual for a court to give extensive consideration to a question of law that was not the subject of argument before it, it seems to me that it was warranted in this case. The Court’s extensive consideration of the nature of the Tribunal’s function and of the difference between that function and the judicial function of quelling disputes about existing rights and obligations demonstrates why the question whether the Tribunal can revisit a question of fact it has previously determined must be one of statutory construction, not of common law principle. Importantly, the Court’s view accords with what appears to be the prevailing view in Victoria – that a valid exercise by the Victorian Civil and Administrative Tribunal of its essentially judicial ‘original jurisdiction’ can give rise to an issue estoppel, but that an exercise of its essentially administrative ‘review jurisdiction’ cannot.

Construction of the Act

Having determined that the question before it was one of statutory construction, the Court concluded that s 78(1) of the Act – which empowers an employer to reconsider its decision to accept or a deny a claim – was the key to answering that question and held that:

[T]he effect of the Tribunal exercising the power of a decision-maker which can reconsider its own decision is that the Tribunal is likewise entitled to reconsider those earlier decisions.  In that respect, it is entitled to make subsequent decisions which are inconsistent with earlier ones.

The logical consequence of the Tribunal having the power to reconsider earlier decisions of the primary decision-maker is that it must also be able to reconsider its own earlier decisions which, likewise, are deemed to be of the primary decision-maker.

It followed that by treating its earlier decision as to the aetiology of the respondent’s malignant melanoma as effectively binding, and thus refusing to consider the new evidence obtained by the Commonwealth with respect to the effect of long-term occupational sun exposure on the incidence of that condition, the Tribunal had failed to discharge its obligation to ‘consider the material relevant to the decision which it was obliged to make.’

It is worth noting that because of the presence in the Act of s 78(1), the Court was not required to consider how s 33(1) of the Acts Interpretation Act 1901 (Cth) may affect the power of the Tribunal to revisit an issue it has previously determined in the context of a statute that does not explicitly provide for the reconsideration of earlier decisions. The precise scope of that provision (and its State and Territory equivalents) remains the subject of some disagreement. Further, because of the fundamental difference between the scheme established by the Act and that employed in most State workers’ compensation legislation, nothing in Snell should be taken as affecting the operation of the principles of issue estoppel and res judicata in the context of workers’ compensation schemes generally. It may, however, be of relevance to the scheme established by the Transport Accident Act 1986 (Vic), which has some features in common with the Act.

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