A Canberra public servant has had a win in her legal battle to have the Commonwealth government pay her $20,000 bill for breast reduction surgery.

The Federal Court has found "fundamental" error in the decision of a lower tribunal to deny Roseanne Howes workers' compensation for the operation she had to relieve the pain of her work-related injuries.

But the court made no finding on the serious accusation that the Australian Tax Office public servant was treated with sarcasm, aggression and bias by the Administrative Appeals Tribunal when she first took her case there.

The AAT member who first heard the case told Ms Howes that it would have been cheaper to exercise or go to Weight Watchers or Jenny Craig.

The ATO worker said long hours hunched over computers at work left her with serious neck and shoulder pain, which she had already been compensated for, and which made her weight balloon and prompted the need for the breast surgery.

Giving evidence to the tribunal, Ms Howes said that prior to her neck and shoulder condition, her weight would fluctuate between 65 and 78 kilograms and her bust size – other than when breast-feeding – was a DD.

But after she hurt herself at work, injuries which were accepted by federal workplace insurer Comcare Ms Howes said her weight ballooned to 104 kg and her bust size was EE to F. The ATO worker argued the surgery – plus a tummy tuck procedure she had done at the same time – had reduced her need for pain medication.

But Comcare refused to pay for the procedure and when Ms Howes appealed the decision to the tribunal, AAT member Dr Marella Denovan was not impressed by the case, accusing the public servant of being an "unreliable historian" and offering "selective" evidence.

Dr Denovan said Ms Howes' breast surgery was not part of her treatment plan set out by Comcare for her neck and shoulder pain and that the primary purpose of the operation was cosmetic.

But on appeal to the Federal Court, Dr Denovan's decision was found wanting, because she ignored large slabs of the case presented by Ms Howes' legal team.

"In my respectful view, there is little or no doubt that, inexplicably, the AAT failed to address the case as put by the applicant," Judge John Griffiths found.

Justice Griffiths said he did not have to rule on the accusation of bias and aggression by Dr Denovan after finding the more fundamental error of law.

But the Federal Court judge suggested that the AAT should consider the serious allegation when selecting a member to hear the case when it returns to the tribunal for reconsideration.

Cost were awarded to Ms Howes.