FEDERAL COURT OF AUSTRALIA

Malady v Repatriation Commission [2011] FCAFC 45

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondent’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

EMMETT J

REASONS FOR JUDGMENT

1    This appeal concerns the question of whether a judge of the Court, having found error on the part of the Administrative Appeals Tribunal (the Tribunal), erred in declining to remit the matter to the Tribunal for further determination.

2    The appellant, Mr Michael Malady (the Veteran) enlisted in the Australian Army in the late 1990s. He was posted to East Timor on 20 September 1999. However, on 28 September 1999 he was evacuated to Darwin suffering from dysentery. He did not return to East Timor and on 10 September 2000 he was discharged from the army on medical grounds. In the period between his return to Australia in September 1999 and his discharge a year later, the Veteran was under medical care in Townsville. He was treated successfully for dysentery. However, he was also treated for emotional disorders, which were diagnosed as post-traumatic stress disorder and major depression. After returning to Victoria, following his discharge from the army, the Veteran received ongoing treatment from a psychiatrist and a psychologist for “post-traumatic stress”, a “major depressive disorder” and “anxiety disorder”.

3    On 19 May 1999, the Veteran had completed a medical examination where his emotional stability and mental capacity were recorded as normal. The medical officer who conducted the medical examination concluded that the Veteran drank a considerable quantity of alcohol and either “[used] or [had] experimented with marijuana or with drugs”.

4    On 9 August 2000, the Veteran applied for disability benefits under the Veterans’ Entitlements Act 1986 (Cth) (the Veterans Act). His application identified “major depression” as the condition that rendered him eligible for benefits under the Veterans Act. A delegate of the respondent, the Repatriation Commission (the Commission) treated the Veteran’s claim as one for “major depression, alcohol abuse and drug abuse”. The delegate refused the claim on 2 February 2001, on the basis that the evidence did not raise a reasonable hypothesis connecting the Veteran’s major depression, alcohol abuse or drug abuse with his operational service in East Timor.

5    The Veteran applied for review of the decision by the Veterans’ Review Board (the Board). On 7 October 2002, the Board affirmed the decision of the Commission’s delegate. In November 2002, the Veteran applied to the Tribunal for review of the Board’s decision.

6    The Tribunal set aside the decision on 28 July 2005 and substituted its own decision, holding that the Veteran’s major depressive order, alcohol dependence or abuse and drug dependence or abuse were war-caused. On 21 July 2006, the Federal Magistrates Court set aside the Tribunal’s decision of 28 July 2005 and ordered that the proceeding be remitted to the Tribunal, differently constituted, for further hearing and determination.

7    On 23 June 2009, the Tribunal, differently constituted, made a decision that it was satisfied that the Veteran suffered from war-caused conditions of major depressive order and alcohol abuse and drug abuse. Accordingly, the Tribunal set aside the decision under review and ordered that the case be remitted to the Commission to calculate the pension payable. The Tribunal considered that there were reasonable hypotheses connecting the conditions of major depressive disorder, alcohol abuse and drug abuse with the Veteran’s war service.

8    On 30 June 2009, the Commission appealed to the Federal Court of Australia pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the Tribunal Act). Under s 44, an appeal lies as of right from a decision of the Tribunal to the Federal Court, but only on a question of law.

9    In its notice of appeal, the Commission pointed to various errors of law that it said had been made by the Tribunal. The principal error was that the Tribunal had relied on a particular medical condition suffered by the Veteran, which was not war-caused, to link his alcohol and drug abuse with operational service. The Veteran accepted that the Tribunal erred in the way contended for by the Commission. He said, however, that the Tribunal had not identified relevant questions of law. He further submitted that, if a question or questions of law had properly been raised, the Court should set aside the Tribunal’s decision and remit the matter to be further heard according to law.

10    The primary judge found that, in dealing with the Veteran’s claim to have suffered from a war-caused depressive disorder, the Tribunal fell into error when it reached the final stage of its reasoning process. The primary judge concluded that the appeal must be allowed and that the decision of the Tribunal be set aside. His Honour also considered that the decisions of the Board and the Commission’s delegate should be affirmed. The Veteran quarrels with that conclusion, saying that there should, rather, have been an order remitting the matter to the Tribunal to be reheard and determined according to law.

11    The primary judge accepted that such an order would be appropriate in cases in which the Tribunal’s error of law distracted it from making findings or dealing with issues that might be resolved favourably to an applicant. However, his Honour said that counsel for the Veteran was unable to suggest any process of reasoning, consistent with the factual findings made by the Tribunal, that would have enabled it to find that any of the three conditions suffered by the Veteran was service-related. In those circumstances, his Honour concluded that it was not appropriate to remit the matter to the Tribunal. By his supplementary notice of appeal of 10 September 2010, the Veteran complains that the primary judge erred in holding that the matter was not an appropriate one to be remitted to the Tribunal and that there was no alternative basis on which the Tribunal might have been persuaded to uphold the Veteran’s claim.

12    I have read in draft form the reasons of Rares J for concluding that the appeal should be dismissed with costs. I agree with his Honour’s conclusion and with his Honour’s reasons for that conclusion.

Associate:

Dated:    

REASONS FOR JUDGMENT

DOWSETT J:

13    I have read in draft the reasons prepared by Emmett J in this matter and those prepared by Rares J. I agree with the orders proposed by Rares J and with the reasons of both Emmett and Rares JJ.

Associate:

Dated:    31 March 2011

REASONS FOR JUDGMENT

RARES J:

14    The issue in this appeal is whether the primary judge was correct to have ordered that the decision of the Administrative Appeals Tribunal in favour of Michael Malady’s claim that he had war caused conditions of major depressive disorder, alcoholic use and drug abuse should be set aside and the decisions of a delegate of the respondent, the Repatriation Commission, and the Veterans Review Board, affirming the earlier decision to reject his claim, be reinstated without remitting the matter to the Tribunal for a further hearing. Mr Malady pressed only one ground of appeal, namely that his Honour erred in failing to order that the proceedings be remitted to the Tribunal for a further hearing.

15    The primary judge acted on a concession made by counsel for Mr Malady that there was an error of law in the Tribunal’s reasoning, namely that the Tribunal had relied on a medical condition suffered by Mr Malady that was not war caused to link his alcohol and drug abuse with operational service. Using his powers under s 44(7) of the Administrative Appeals Tribunal Act 1975 (Cth) his Honour found that, in addition, Mr Malady’s depressive illness could not be linked to his operational service, as the Tribunal had decided, and, consequently there was no basis to support of any of the three findings which the Tribunal had made in his favour.

16    His Honour noted that Mr Malady had made a submission, in the event that the appeal before his Honour were allowed, that the matter should be remitted to the Tribunal to be reheard and determined according to law. The primary judge observed that such an order would be appropriate in cases in which the Tribunal’s error of law had distracted it from making findings or dealing with issues that might be resolved favourably to an applicant. However, his Honour had invited counsel for Mr Malady to identify any alternative basis on which the Tribunal might have been persuaded to uphold Mr Malady’s claim. Counsel did not suggest to the primary judge any process of reasoning, consistent with the factual findings made by the Tribunal, that could have enabled it to find that any of the three conditions suffered by Mr Malady was service related.

Facts

17    The following account has been taken largely from the primary judge’s reasons. Mr Malady enlisted in the Australian Army Reserve in June 1998 and transferred to the Australian regular army in June 1999 when he was nearly 26 years old. He was posted to East Timor on 20 September 1999, but the posting was short lived. Mr Malady had been posted to East Timor with the Second Battalion of the Royal Australian Regiment, as part of the international peace keeping force, known as INTERFET. INTERFET was operating at that time to secure vital infrastructures in and around the capital of East Timor, Dili, in co-operation with Indonesian Armed Forces. On 25 September 1999 he became ill, and on the following day he was admitted to a field hospital. Three days later he was evacuated to Darwin suffering from dysentery. He never returned to East Timor. On 10 September 2000, Mr Malady was discharged from the army on medical grounds.

18    The primary judge lucidly distilled the essential elements of Mr Malady’s claims to be entitled to benefits under the Veterans Entitlement Act 1986 (Cth) (the Act). Mr Malady claimed that during his period of service in East Timor he experienced the following events:

    colleagues accidently discharging rounds from their firearms;

    while in a patrol vehicle, observing a person who appeared to be carrying a rifle, whom he (Mr Malady) contemplated having to shoot, but ultimately did not do so because the person disappeared from view (the patrol vehicle incident);

    coming across a substance that appeared to be, and smell like, blood and seeing what he described as a shallow grave (the shallow grave incident);

    seeing guns held by Indonesian soldiers, who were travelling in a truck, being pointed in his general direction.

19    In the period between his return to Australia in September 1999 and his discharge a year later, Mr Malady was under medical care in Townsville. He had been treated successfully for dysentery. He was also being treated for emotional disorders that at that time were diagnosed as post-traumatic stress disorder and major depression.

20    Prior to being posted to East Timor, Mr Malady completed a medical examination on 19 May 1999. There, his “emotional stability” and “mental capacity” were recorded as “normal”. The medical officer conducting that examination concluded that Mr Malady drank a considerable quantity and either used, or had experimented with, marijuana or with other drugs. The medical officer recorded that Mr Malady consumed about 20-25 alcoholic drinks per week and smoked approximately 20 cigarettes per day and had tried “marijuana several times” about 9 or 10 years earlier.

21    Subsequent medical reports indicated that Mr Malady had resumed using marijuana after he returned from East Timor for its “dulling” effect. He also was noted to have used amphetamines following his period of service and to have begun drinking heavily, not having been a “heavy drinker” previously. While he was recuperating in Townsville Mr Malady reported having snapped and starting to have angry outbursts. He also felt as if he had “let his mates down” by leaving East Timor in the circumstances. After returning to Victoria following his discharge from the army, Mr Malady received ongoing treatment from Dr Ridley (a psychiatrist) and Mr Kingsley (a psychologist) for post-traumatic stress disorder, a major depressive disorder and anxiety disorder.

Procedural Background

22    Mr Malady applied for disability benefits under the Act on 9 August 2000. His application identified major depression as the condition that rendered him eligible for a pension payment. That claim was treated by a delegate of the Commission as a claim for major depression, alcohol abuse and drug abuse, but was refused on 21 February 2001. The basis of the refusal was that the evidence did not raise a reasonable hypothesis connecting any of Mr Malady’s major depression, alcohol abuse or drug abuse with his operational service in East Timor. Mr Malady’s application for review of that decision by the Board was rejected on 7 October 2002.

23    In November 2002, Mr Malady applied to the Tribunal for a review of the Board’s decision. The Tribunal set aside the Commission’s decision on 28 July 2005 and substituted its own decision that each of Mr Malady’s major depressive disorder, alcohol dependence or abuse and drug dependence or abuse was war caused: Re Malady v Repatriation Commission [2005] AATA 713 at [1]-[2]. The Federal Magistrates Court allowed the Commission’s appeal on 21 July 2006, set aside the Tribunal’s decision and ordered that the proceeding be remitted to the Tribunal, reconstituted, for further hearing and determination: Repatriation Commission v Malady [2006] FMCA 1050. The Tribunal was reconstituted.

24    The second tribunal found that Mr Malady was a veteran and had rendered operational service. It decided on 23 June 2009 that Mr Malady suffered from major depressive disorder, alcohol abuse and drug abuse and that those conditions were war caused because there was a reasonable hypotheses connecting each of those conditions with his war service: Re Malady v Repatriation Commission [2009] AATA 454. The Tribunal remitted the case to the Commission to calculate the pension payable. The Commission brought an appeal on 11 questions of law which was heard by the primary judge.

The Legislative Scheme

25    A disease contracted by a veteran is taken to be a war-caused disease under s 9(1) of the Act, relevantly, if that disease resulted from an occurrence that happened while the veteran was rendering operational service, or arose out of or was attributable to any eligible war service rendered by the veteran (ss 9(1)(a) and (b)).

26    Where a claim for a pension is made under Pt II of the Act in respect of incapacity from disease of a veteran relating to operational service rendered by him or her, the Commission (and in the present circumstances, the Tribunal) must determine that the disease was a war-caused disease “unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination” (s 120(1)). The Tribunal must be satisfied beyond reasonable doubt, in applying s 120(1), that there is no sufficient ground for determining that the disease was a war caused disease if, after consideration of the whole of the material before it, the Tribunal is of the opinion that the material before it does not raise a reasonable hypothesis connecting the disease with the circumstances of a particular service rendered by the person (s 120(3)). Next, s 120A(3) provides that, for the purposes of s 120(3), a hypothesis connecting a disease contracted by a person with the circumstances of operational service rendered by him or her is reasonable only if there is in force, relevantly, a Statement of Principles (SoP) determined under s 196B(2) or (11) that upholds such an hypothesis.

27    When the Tribunal is required to determine whether a veteran is suffering from a claimed injury or disease it must decide that issue to its reasonable satisfaction, except when the matter to be determined is governed by s 120(1) (i.e. except where the claim is that the injury or disease relates to operational service rendered, in which case that cause must be excluded only if the Tribunal is satisfied beyond reasonable doubt that there is no sufficient ground for making that determination): s 120(4); Repatriation Commission v Budworth (2001) 116 FCR 200 at 204-205 [15] per Ryan, Marshall and Conti JJ; Benjamin v Repatriation Commission (2001) 70 ALD 622 at 634-635 [54]-[55] per Moore, Emmett and Allsop JJ.

28    When the Commission, or the Tribunal on review, is required to determine whether a veteran is suffering from a particular injury or disease, that issue must be decided to the reasonable satisfaction of the decision-maker in accordance with s 120(4) of the Act (Benjamin ALD at 634 [54]; Budworth 116 FCR at 204-205 [15]. If it decides that, relevantly, the veteran is suffering from the disease, the Tribunal must determine that the disease was war caused unless it is satisfied beyond reasonable doubt that there is no sufficient ground for such a determination because the material before it does not raise a reasonable hypothesis, upheld in a Statement of Principles, that connects the disease with the particular circumstances of the veteran’s service. In other words, s 120(1) creates a presumption that a claim in respect of a relevant injury or disease that relates to operational service rendered by a veteran can only be displaced by proof beyond reasonable doubt that the injury or disease was not war-caused because it has not been upheld by an hypothesis in a Statement of Principles.

29    The Repatriation Medical Authority is given authority to determine a Statement of Principles where it is of the view that there is sound medical-scientific evidence that indicates that a particular kind of injury, disease or death can be related to, relevantly, operational service rendered by veterans pursuant to s 196B(1) and (2)(a). In such a case the Authority must determine a Statement of Principles in respect of that kind of injury, disease or death setting out the factors that must, as a minimum, exist and which of those factors must be related to service rendered by a person, before it can be said that a reasonable hypothesis has been raised connecting an injury, disease or death of that kind with the circumstances of that service (s 196B(2)(d) and (e)). Section 196B(14) provides that a factor causing, or contributing to, a disease is related to service rendered by a person if it resulted from an occurrence that happened while the person was rendering that service, or arose out of, or was attributable to, that service or was contributed to in a material degree, or was aggravated by that service (s 196B(14)(a), (b) and (d)) or, in the case of a factor causing, or contributing to, a disease, it (i.e. that factor) would not have occurred but for the rendering of that service by the person (s 196B(14)(f)(i)). The relevant statutory language of s 196B(14) is in the following terms:

“(14)    A factor causing, or contributing to, an injury, disease or death is related to service rendered by a person if:

(a)    it resulted from an occurrence that happened while the person was rendering that service; or

(b)    it arose out of, or was attributable to, that service; or

…

(d)    it was contributed to in a material degree by, or was aggravated by, that service; or

…

(f)    in the case of a factor causing, or contributing to, a disease—it would not have occurred:

(i)    but for the rendering of that service by the person; or

(ii)    but for changes in the person’s environment consequent upon his or her having rendered that service; or

…”

30    The Tribunal (or the Commission or Board) must apply the above provisions of the Act in a claim such as the present, in respect of the incapacity of a person from injury or disease, or in respect of the death of a person related to service rendered by that person using the four stage process explained by Beaumont, Hill and O’Connor JJ in Repatriation Commission v Deledio (1998) 83 FCR 82 at 97E-98B. The four stage process in Deledio 83 FCR at 97-98 requires the Tribunal:

(1)    to consider all material before it and determine whether that points to an hypothesis connecting, relevantly the disease with the circumstances of the particular service rendered by the veteran. This does not involve any question of fact. If no such hypothesis is ascertained, the application fails;

(2)    if such an hypothesis is raised, the Tribunal then ascertains whether a Statement of Principles is in force under s 196B(2) or (11); if not, the hypothesis will be taken not to be reasonable and, in consequence, the application fails;

(3)    if a Statement of Principles is in force, the Tribunal then must then form an opinion whether the hypothesis raised is a reasonable one based on whether it fits or is consistent with the “template” in the Statement of Principles. To do this, the hypothesis must contain one or more of the factors that the Statement of Principles requires exist as a minimum and, at least, one such factor must be related to service rendered by the veteran (ss 196B(2)(d) and (e)). If the hypothesis does not satisfy this requirement, it fails;

(4)    if the hypothesis contains the factors above, the Tribunal considers it in accordance with s 120(1), to determine whether it is satisfied beyond reasonable doubt that the incapacity claimed by the veteran from the disease was not a war caused disease. If the Tribunal is not satisfied beyond reasonable doubt of this, the claim succeeds; if it is so satisfied, the claim fails.

31    The Tribunal is only required to find facts from the material before it in the process of arriving at its determination at the fourth stage. No party carries an onus of proof in that fact finding exercise (s 120(6)).

32    The disjunctive range of circumstances that s 9 deems to be war-caused, for the purposes of the Act, manifests a legislative intention to give the expression “war-caused” a broad meaning. A causal link alone, or a causal connection, is capable of satisfying the test of attributability, without the need to superimpose any qualifications conveyed by such terms as sole, dominant, direct or proximate: cf Roncevich v Repatriation Commission (2005) 222 CLR 115 at 126 [27] per McHugh, Gummow, Callinan and Heydon JJ. Nonetheless, s 196B(14) specifies how a factor in a Statement of Principles that causes or contributes to, relevantly, a disease, must be related to service rendered by the veteran: Repatriation Commission v Money (2009) 173 FCR 410 at 412-413 [5] per Finn and Edmonds JJ. Thus, s 196B(14) plays a vital role in ascertaining whether a reasonable hypothesis exists that connects, relevantly, the disease, with the circumstances of the particular service rendered by the person for the purposes of s 120(3).

The Tribunal’s Reasons

33    The Tribunal found that none of the adverse experiences Mr Malady had encountered in East Timor constituted an extreme traumatic stressor for the purposes of the Statement of Principles applicable to post-traumatic stress disorder. However, it did accept that he suffered from four conditions. These were borderline personality disorder, alcohol abuse, drug abuse and depressive disorder. The Tribunal found that the depressive disorder had not been present prior to his service in East Timor and that it was a separate condition from his borderline personality disorder.

Post-traumatic Stress Disorder

34    Before dealing with the other conditions, the Tribunal considered whether there was a reasonable hypothesis connecting post-traumatic stress disorder to Mr Malady’s service in East Timor.

35    Mr Malady wrote in his diary that the shallow grave incidents were “pretty scarey” (sic). Mr Malady gave evidence to the Tribunal that the patrol vehicle incident had shaken him and that “I could have – could have shot him … his life was in my hands and it made me – made me feel quite ill”. The Tribunal accepted those descriptions of his experiences in East Timor. But, it determined that Mr Malady found his experiences in East Timor to be only frightening or to a certain extent frightening.

36    The Tribunal concluded that the patrol vehicle incident was not an extreme traumatic stressor of the type contemplated in DSM-IV-TR for post-traumatic stress disorder (which was reflected in the definition of “experiencing a severe stressor” in SoP No 5 of 2008). It found that when Mr Malady saw the person whom he contemplated having to shoot, that he could not discern whether the person was holding a stick or a gun. It found that Mr Malady had told Dr Green that he decided not to fire because the figure was too far away. The Tribunal observed that if the person were so far away that no purpose would be achieved by shooting at him, it followed that he was not in danger of being shot by Mr Malady and that “[i]t follows that the basis of the applicant’s assertion that he held the life of the [person] in [h]is hands cannot be sustained”. The Tribunal found that on this occasion Mr Malady was not directly involved in an event in which another person “was threatened with death or serious injury”.

37    The Tribunal also rejected Mr Malady’s claim about the shallow grave incident. This was because Mr Malady speculated about the source of what he saw and smelt as blood. It found that there was no basis to link that substance, assuming it to be blood, with an event of the kind prescribed in the definition as one “… that involved actual or threat of death or serious injury”. It said:

“Even if there was a smell of blood and the sticky substance on the floor was blood, then it is speculative, in the absence of some confirmatory material, to associate it with the occurrence of an atrocity. The Tribunal is satisfied that the applicant’s evidence is equivocal as to whether what he smelt and experienced was blood and even, if so, there is nothing to suggest it was human blood. Even accepting that the applicant smelt and saw blood and that it was human blood, that by itself does not objectively qualify as exposure to an extreme traumatic stressor of the type contemplated in DSM-IV-TR criteria. The same is true concerning the applicant seeing a shallow grave – that, without more, cannot objectively sustain a traumatic stressor of the type identified in DSM-IV-TR.” (emphasis added)

38    The Tribunal also found that Mr Malady did not see any dead bodies while in East Timor. Thus, the Tribunal did not find that the two events on which Mr Malady relied involved either actual death, the threat of death or serious injury, or a threat to the other person’s physical integrity.

39    Next, the Tribunal found that there was a reasonable hypothesis connecting each of those medical conditions to Mr Malady’s service in East Timor. It did this because it considered that there was no doubt that he had found his experiences there to be frightening. It reasoned that a person in Mr Malady’s position who, when serving overseas, had an existing borderline personality disorder, was predisposed to other mental conditions developing or being aggravated. In making those observations, the Tribunal did not consider itself to be making a finding of fact but to be considering whether there existed a reasonable hypothesis. Next, the Tribunal turned to identifying whether any of the four medical conditions matched the terms of the relevant Statement of Principles for that condition.

Borderline Personality Disorder

40    The Tribunal found that Mr Malady’s borderline personality disorder did not satisfy either Statement of Principles that had been in force in respect of that condition in the period between 1999 and the time of its decision, namely SoP No 143 of 1995 (as amended by No 13 of 1997) and its replacement, No 70 of 2008. The Tribunal found that the features of Mr Malady’s borderline personality disorder became more apparent at the same time as his depression developed and his alcohol and drug abuse worsened.

Substance (Alcohol and Drug) Abuse

41    The Tribunal considered Mr Malady’s alcohol abuse under a number of Statements of Principles that had been in force at various relevant times. The most favourable one to him was SoP No 76 of 1998. The Tribunal found that Mr Malady suffered from alcohol abuse prior to commencing operational service but that this abuse had clinically worsened. The Tribunal accepted the evidence of the Commission’s expert, Dr Strauss, that Mr Malady’s borderline personality disorder had been present from early adulthood. It found that that factor satisfied cl 5(c) of SoP No 76 of 1998, which required that the veteran suffered from a psychiatric disorder at the time of the clinical worsening of, relevantly, alcohol abuse.

42    The Tribunal also was satisfied that Mr Malady’s drug intake had escalated in 2000 and that, once again, his borderline personality disorder had been present at that time. That factor satisfied cl 5(d) of SoP No 78 of 1998, which was the most favourable Statement of Principles concerning drug abuse applicable to Mr Malady during the relevant period. The factors specified in that Statement of Principles were relevantly the same as those in SoP No 76 of 1998 in respect of alcohol. Thus, the Tribunal was able to conclude that a connection had been established between Mr Malady’s service and his aggravated drug abuse because he had the existing borderline personality disorder in 2000 when his cannabis intake escalated.

43    The Tribunal observed that it could not be known whether the borderline personality disorder warranted “ongoing management” in 2000 when each of the drug and alcohol abuse conditions worsened.

Depressive Disorder

44    The Tribunal was satisfied that Mr Malady met the factor for a current major depressive disorder in SoP No 27 of 2008 in respect of depression. It found that Mr Malady’s depressive disorder satisfied the factor specified in cl 6(a)(vii) of SoP No 27 of 2008, namely that he had a clinically significant psychiatric condition within the two years before the clinical onset of his depressive disorder. It found that the term “clinically significant psychiatric condition” was defined in cl 9 of SoP No 27 of 2008 as including both alcohol and drug abuse which were conditions that met the definitional requirement of being “… sufficient to warrant ongoing management which may involve regular visits …”.

45    The Tribunal observed that Mr Malady had received treatment for his substance abuse on more of an intermittent, rather than a regular, basis but said that “… his condition is such that it is sufficient to warrant ‘ongoing management’ and has not resolved to the extent that the applicant has been able, for instance, to return to work” (emphasis added). The Tribunal found that it was likely that Mr Malady had commenced suffering from substance abuse prior to the commencement of his service and thus met the requirements of cl 6(a)(vii) of SoP No 27 of 2008.

46    The Tribunal found that the Statement of Principles for depression (SoP No 27 of 2008) contained no objective requirement that needed to be present before a veteran could be found to suffer depression. It rejected the Commission’s argument that Mr Malady’s depression did not arise out of his operational service but arose following completion of the service and related to his feelings of letting down his fellow servicemen as a result of his early return to Australia. It found that the events in East Timor were a cause of Mr Malady’s having developed depression sufficient for him to satisfy the requirements of the Statement of Principles. The Tribunal accepted Dr Strauss’ opinions that Mr Malady’s experiences in East Timor had had a direct aetiological role in precipitating his current psychological difficulties and that two experiences had played a significant part in the development of his depression. Those two experiences were first, that at the time Mr Malady left East Timor, he had a significant sense of guilt and remorse that affected him when he got back and threw him into a significant depression and, secondly, that he found his time in East Timor stressful and to a certain extent frightening.

The Tribunal’s Conclusion

47    The Tribunal concluded that it was satisfied that Mr Malady had the war-caused conditions of major depressive disorder, alcohol abuse and drug abuse. It remitted the claim to the Commission to calculate the pension payable.

The Primary Judge’s Reasoning

48    As noted above, the primary judge accepted Mr Malady’s concession that the Tribunal had made an error of law in relying upon the existence of his borderline personality disorder to find that a factor for the worsening of his alcohol abuse and drug abuse had been established. The concession did not extend to the Tribunal’s use of the borderline personality disorder in relation to its finding that his depression also satisfied the Statement of Principles for that condition.

49    His Honour reasoned that the alcohol and drug abuse had to be linked to Mr Malady’s operational service. In order for such a link to be established the psychiatric condition of borderline personality disorder, in turn, had to be caused by operational service. His Honour noted that the Tribunal had found that there was no causal nexus between Mr Malady’s operational service and his borderline personality disorder. The primary judge then determined that it followed that, for the purposes of s 120A(3) of the Act, no Statement of Principles upheld an hypothesis connecting each disease (the worsening of each of the alcohol and drug abuse and the development of the depression) with the circumstances of his operational service.

50    His Honour held that the Tribunal had erred in using the existence of Mr Malady’s pre-existing conditions of substance abuse (for both alcohol and drugs) and his borderline personality disorder as factors linking the development of his depressive disorder to his operational service in East Timor. He identified the Tribunal’s error as finding that the events in East Timor were a cause of Mr Malady developing depression, when those events were not specified in SoP No 27 of 2008 as factors that could link the depressive disorder to his operational service. This was because, he held, the Tribunal had not found that Mr Malady had experienced any severe traumatic stressor in East Timor.

51    His Honour observed that had the Tribunal proceeded consistently with the requirements of SoP No 27 of 2008 it may have held that it was satisfied beyond reasonable doubt that Mr Malady had not suffered from substance abuse in the two years before the clinical onset of his depressive disorder. The primary judge said that it would have been necessary for the Tribunal to make such a finding if its reason for determining that Mr Malady’s alcohol and drug abuse was sufficient to warrant ongoing management, were understood as containing an express or implied finding that his substance abuse only warranted ongoing management after he had left East Timor and returned to Australia. His Honour said that such an understanding of the Tribunal’s reasons was suggested by its use of the present tense (“is such” and “is sufficient”) when making that finding, being the words emphasised in [45] above. His Honour held that there was no express finding that Mr Malady’s substance abuse required ongoing management in the two year period prior to the clinical onset of his depressive disorder, following his return from East Timor.

52    Finally, his Honour determined that in any event the Tribunal was bound to find that Mr Malady’s psychiatric condition was not related to his operational service in East Timor in any of the ways identified in s 196B(14) of the Act. He held that this conclusion followed from the fact that the drug and alcohol abuse, constituting relevant psychiatric conditions in the factors in SoP No 27 of 2008, was not service related in the necessary sense. Accordingly, his Honour allowed the appeal and set aside the Tribunal’s decision, so as to restore the rejections of Mr Malady’s claim by the Commission and the Board.

53    His Honour also rejected Mr Malady’s submission that there should be an order remitting the matter to the Tribunal to be reheard and determined according to law. He had invited counsel for Mr Malady to identify any alternative basis upon which, on a remitter, the Tribunal might have been persuaded to uphold Mr Malady’s claim. His counsel was unable to suggest any process of reasoning, consistent with the factual findings, made by the Tribunal that would have enabled it to find that any of the three conditions suffered by Mr Malady were service related.

Arguments on Appeal

54    Counsel for Mr Malady, despite arguing in the grounds of appeal that his Honour ought to have remitted the matter, was unable to articulate in written submissions filed before, or in oral argument during, the hearing of the appeal any basis on which, had it not made the error of law he conceded, the Tribunal could have found favourably for Mr Malady, consistent with the findings which it had made. At the conclusion of argument, the Full Court granted leave to Mr Malady to file written submissions stating the findings the Tribunal could and should have made, had it not made the conceded error of law, indicating the evidence in the appeal papers on which those findings would be based and whether, and on what basis, he invited the Full Court to make findings of fact under s 44(7) of the Administrative Appeals Tribunal Act. The Commission was ordered to file submissions in reply. The parties did so.

55    In his submissions filed after the hearing, Mr Malady argued that, because of its error of law, the Tribunal had failed to make findings favourable to him that it should have made in respect of each of his conditions of alcohol abuse, drug abuse and depressive disorder. He contended that the Tribunal should have found that he had experienced various stressors that aggravated his alcohol abuse condition for the purposes of cl 5(d) of SoP No 76 of 1998 and his drug abuse condition for the purposes of cl 5(e) of SoP No 78 of 1998. He contended that the Tribunal should have considered whether each of his pre-existing alcohol abuse and drug abuse had clinically worsened by his service in East Timor. Mr Malady relied on each of the patrol vehicle and the shallow grave incidents as satisfying the factor of “experiencing a severe stressor” in cl 5(d) of SoP No 76 of 1998 and its analogue. He propounded that an available hypothesis was that each of those two stressors was a sufficient factor to satisfy one or both of the Statements of Principle applicable to his substance abuse. Mr Malady also argued that the Tribunal should have found that his depressive disorder was causally linked to his service in East Timor because one or both of his alcohol and drug abuse had been aggravated by that service.

56    The Commission’s submissions in reply argued that the definitions of “experiencing a severe stressor” in SoPs No 76 and 78 of 1998, on which Mr Malady relied, were almost identical to the definition of that term in cl 8 of SoP No 3 of 1999, being the Statement of Principles concerning post-traumatic stress disorder. The Commission argued that the Tribunal had found that Mr Malady did not experience, witness or confront an event involving actual death or physical injury. It also contended that neither the patrol vehicle incident nor the shallow grave incident, or a combination of them, was sufficient to satisfy the definitions of “experiencing a severe stressor” in the substance abuse SoPs. It noted that the Tribunal had found that neither event satisfied the requirement of his experiencing a severe stressor, for the purposes of SoP No 5 of 2008 in respect of post-traumatic stress disorder. (The latter SoP had a materially different definition of the stressors.) It contended that neither experience could be found to have evoked horror in Mr Malady. The Commission also argued that there was no evidence that either of the two events as recounted by Mr Malady had the character of an event that “might evoke intense fear, helplessness or horror”.

The Additional Provisions in SoPs

57    SoP No 27 of 2008 identified the requirements for an hypothesis for a valid claim based on a depressive disorder. This required at least one of the factors set out in cl 6 to be related to the relevant service rendered by the veteran (cl 5). Those factors included:

“6    The factors that must as a minimum exist before it can be said that a reasonable hypothesis has been raised connecting depressive disorder … with the circumstances of a person’s relevant service is:

(a)    for a major depressive episode, recurrent major depressive disorder, dysthymic disorder and depressive disorder not otherwise specified only …

(vii)    having a clinically significant psychiatric condition within the two years before the clinical onset of depressive disorder …” (emphasis added)

58    A “clinically significant psychiatric condition” was defined as meaning any “Axis I disorder of mental health that attracts a diagnosis under DSM-IV-TR which is sufficient to warrant ongoing management which may involve regular visits (for example, at least monthly), to a psychiatrist, clinical psychologist or general practitioner” (cl 9).

59    Mr Malady argued that he satisfied the requirement of having a clinically significant psychiatric condition within the two years before the clinical onset of his depression because he had each of the three other conditions, namely, borderline personality disorder, alcohol abuse and drug abuse. The Commission argued that his Honour was correct when he concluded that none of those three pre-existing conditions was a factor that related to service within the meaning of s 196B(14) and cl 5 of SoP No 27 of 2008.

60    Relevantly, cl 5 of SoP No 76 of 1998 identified as a factor that, as a minimum, had to exist before it could be said that a reasonable hypothesis had been raised connecting alcohol abuse with the circumstances of a person’s relevant service:

“(d)    experiencing a severe stressor within the two years immediately before the clinical worsening of … alcohol abuse.”

61    That factor also applied to a material contribution to or aggravation of alcohol abuse where the person’s alcohol abuse was suffered before or during (but not arising out of) the person’s relevant service for purposes of s 9(1)(e) of the Act (cl 6). The expression “experiencing a severe stressor” was defined, in cl 8, as meaning that the person experienced, witnessed or was confronted with, an event or events that involved actual or threatened death or serious injury, or a threat to the physical integrity of the person or others being an event or events that “might evoke intense fear, helplessness or horror”. (emphasis added) Materially similar provisions applied in relation to drug abuse in cll 5(e), 6 and 8 of SoP No 78 of 1998.

62    The definition of “experiencing a severe stressor” in cl 8 of SoP No 3 of 1999, for the purposes of post-traumatic stress did not include the just emphasised qualification that was contained in the two substance abuse SoPs. No similar definition was in SoP No 5 of 2008 that replaced SoP No 3 of 1999. Instead, SoP No 5 of 2008 prescribed a number of factors in cl 6 that must as a minimum, exist for an hypothesis for the purposes of s 120(1), including experiencing a category 1A or a category 1B stressor before the clinical onset of post-traumatic stress disorder (cl 6(a) and (b)). Clause 9 of SoP No 5 of 2008 defined those stressors as relevantly:

““a category 1A stressor” means one or more of the following severe traumatic events:

(a)    experiencing a life-threatening event;

(b)    being subject to a serious physical attack or assault including rape and sexual molestation; or

(c)    being threatened with a weapon, being held captive, being kidnapped, or being tortured;

“a category 1B stressor” means one of the following severe traumatic events:

(a)    being an eyewitness to a person being killed or critically injured;

(b)    viewing corpses or critically injured casualties as an eyewitness;

(c)    being an eyewitness to atrocities inflicted on another person or persons;

(d)    killing or maiming a person; or

(e)    being an eyewitness to or participating in, the clearance of critically injured casualties;”

Consideration

63    The factors specified in cl 6 of SoP No 27 of 2008 concerning a depressive disorder were specified for the purposes of s 196B(2). In particular, s 196B(2)(e) required a Statement of Principles to identify which factors must be related to service rendered by a person in the sense specified in s 196B(14). Thus, each of Mr Malady’s pre-existing conditions (alcohol abuse, drug abuse and borderline personality disorder) could only be found by the Tribunal to be a clinically significant psychiatric condition for the purposes of cl 6(a)(vii) if it related to service within the meaning of s 196B(14). Yet, none of those three pre-existing conditions could satisfy the definition of a factor causing or contributing to a disease that was related to service rendered by Mr Malady within the meaning of s 196B(14).

64    First, for the purposes of s 196B(14)(a), none of those conditions resulted from an occurrence that happened while Mr Malady was rendering the service because each existed beforehand. Secondly, none of them could be said for the purposes of s 196B(14)(b) to have arisen out of or be attributable to the service, for the same reason. Thirdly, s 196B(14)(f) prescribed that a disease could be related to service if a factor that caused or contributed to it would not have occurred:

“(i)    but for the rendering of that service by the person;

(ii)    but for changes in the person’s environment consequent upon his or her having rendered that service.”

65    The Tribunal’s findings that Mr Malady’s operational service was not the sole cause of the worsening of Mr Malady’s alcohol and drug dependence or the development of his depressive disorder would make remission to the Tribunal on this issue futile.

66    The primary judge referred to the Tribunal’s finding that Mr Malady had not experienced any severe traumatic stressor while in East Timor. He made that finding in the context of the Tribunal’s evaluation of the evidence in respect of the criteria relevant for post-traumatic stress disorder under SoP No 5 of 2008, not in respect of the different and more expansive definitions of “experiencing a severe stressor” in the SoPs applicable to substance abuse. As noted in [38] above, the Tribunal had found that none of the events on which Mr Malady relied involved actual death, the threat of death or serious injury, or a threat to the other person’s physical integrity.

67    Under s 196B(14)(d) a factor causing or contributing to a disease could be related to service rendered by Mr Malady if:

“…

(d)    it was contributed to in a material degree by, or was aggravated by that service.” (emphasis added)

68    The Tribunal found that “the applicant’s alcohol abuse was aggravated by his [operational] service” and made a similar finding as to his drug abuse. Each of alcohol and drug abuse were Axis I disorders for the purposes of SoP No 27 of 2008.

69    The Tribunal found that there was a connection between the substance abuse and his operational service. However, there is no basis for a finding that Mr Malady experienced an event that fell within the definition of “experiencing a severe stressor” in any substance abuse SoP.

70    It follows that there was no factual issue in relation to the alcohol and drug abuse SoPs that the Tribunal left open as capable of being found in favour of Mr Malady. His claims under those SoPs were not affected by the error of law and were necessarily doomed to fail.

71    It follows that the appeal must be dismissed.

Associate:

Dated:    31 March 2011