FEDERAL COURT OF AUSTRALIA
Smith v Repatriation Commission [2014] FCAFC 53
IN THE FEDERAL COURT OF AUSTRALIA | |
| Appellant | |
AND: | Respondent |
DATE OF ORDER: | |
WHERE MADE: |
THE COURT ORDERS THAT:
2. The orders made by the primary judge on 19 September 2012 be set aside and in lieu thereof it be ordered that:
(1) the decision of the Administrative Appeals Tribunal made on 16 February 2012 be set aside and the matter be remitted to the Administrative Appeals Tribunal to hear and consider the matter according to law;
(2) the respondent pay the applicant’s costs.
3. By consent, the respondent pay the appellant’s costs.
Note: Entry of orders is dealt with in Rule 32 of the Federal Court Rules 2011 (Cth).
VICTORIA DISTRICT REGISTRY | |
GENERAL DIVISION | VID 782 of 2012 |
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA |
BETWEEN: | KENNETH ALLAN SMITH Appellant
|
AND: | REPATRIATION COMMISSION Respondent
|
JUDGES: | RARES, BUCHANAN, FOSTER JJ |
DATE: | 1 MAY 2014 |
PLACE: | SYDNEY (VIA VIDEOLINK TO MELBOURNE) |
REASONS FOR JUDGMENT
RARES J:
1 I have had the considerable advantage of reading Buchanan J’s reasons. His Honour sets out most of the statutory and factual material necessary to resolve the appeal. I agree with the orders his Honour proposes and generally with his reasons but prefer to explain in my own words how I consider the relevant provisions in the Veterans’ Entitlements Act 1986 (Cth) should be construed.
The Statutory Scheme
2 Relevantly, under s 5D(2) a reference to the incapacity of a veteran from a war-caused injury refers to the effects of that injury, as opposed to the injury itself. Part II of the Act deals with pensions for veterans, among other matters. Where a veteran is incapacitated from a war-caused injury or war-caused disease (which I will refer to in these reasons as a war-caused injury for the sake of brevity), the Commonwealth is, subject to the Act, liable to pay pension by way of compensation to the veteran in accordance with the Act (s 13(1)(b), (d)). A veteran may make a claim for a pension under s 14.
3 Importantly, a veteran who is in receipt of a pension under Pt II in respect of his or her incapacity may apply in accordance with s 15 for an increase in the rate of pension on the ground that the veteran’s incapacity has increased since the rate of pension was assessed or was last assessed (s 15(1)). Such an application must be:
in writing;
in accordance with an approved form;
accompanied by evidence the veteran has available to him or her that he or she considers to be relevant; and
lodged at an office of the Department in Australia in accordance with s 5T, so that it is taken, by force of s 5T(2)(b) to have been lodged on the day it is received there (s 15(3)).
The veteran has no onus of proof in an application for an increased pension and can provide further evidence to support it at any time before a determination of the application (s 15(4)). However, s 15(5) prevents the veteran making any further application for an increased pension under s 15 until the current one has been finally determined.
4 The Secretary must cause an investigation into the matters to which a claim under s 14 or an application under s 15 relates (s 17(1)). After completing that investigation, the Secretary must cause the claim or application to be submitted to the Commission (s 17(2)). The Commission has a duty of satisfying itself with respect to, or to determine, all matters relevant to the determination of the claim or application in accordance with s 19 (ss 18(1), 19).
5 Next, s 19(4A) prescribes, in a byzantine fashion, matters for an application under s 15(1) that the Commission must determine, relevantly, in accordance with ss 19(5A)-(5D) (s 19(4A)). Importantly, the Commission must assess each of the matters in s 19(5C) in accordance with whichever of six possible sections is applicable, relevantly here, ss 23 and 24 (s 19(5B)). Those matters are the rate or rates at which the pension would have been payable during the assessment period (being the period starting on the date on which the application was lodged within the meaning of s 5T(2), and ending on the date of its determination (s 19(9))), and, subject to s 19(6), the rate at which the pension is payable (s 19(5C)). If the Commission determines that the pension was payable at the rate provided by ss 23 or 24 at some time during the assessment period, s 19(6) provides that, relevantly:
“the rate at which the pension is payable shall not be lower than the rate provided by whichever of those sections applied, or applied most recently, during the assessment period.”
After the Commission makes its assessment under s 19(5C), it “must determine that pension is payable at the rate assessed” (s 19(5D)).
6 Each of ss 23(1)(aa), (aab) and (a) and 24(1)(aa), (aab) and (a) require that a veteran, who has made an application for an increase in the rate of a pension under s 15, not have turned 65 when he or she made the claim or application and, relevantly, have a determination in force that his or her degree of incapacity is at least 70%. If he or she satisfies those conditions, and the remaining applicable provisions of s 24(1) or s 23(1), the veteran will qualify for a special rate or an intermediate rate of pension to compensate for a complete or partial loss of his pre-incapacity earnings. Buchanan J has set out the relevant text of ss 23 and 24.
7 Section 25, which is referred to in both ss 23(1)(d) and 24(1)(d), deals with situations of temporary incapacity. Remunerative work is defined in s 5Q as including any remunerative activity. When determining whether a veteran is incapable of undertaking remunerative work for the purposes of ss 23(1)(b) and 24(1)(b), the Commission must have regard only to the three matters prescribed by s 28, relevantly:
the veteran’s vocational, trade and professional skills, qualifications and experience (s 28(a));
the kinds of remunerative work which a person with those skills, qualifications and experience “might reasonably undertake” (s 28(b));
the degree to which the veteran’s impairment as a result of the injury has reduced his or her capacity to undertake those kinds of work (s 28(c)).
Consideration – statutory interpretation
8 It is necessary to consider s 24(1) before turning to s 23(1). That is because s 23(1)(d) provides that s 23(1) applies to the veteran only if s 24 does not. The evident intention of s 24(1)(b) is to define when a veteran is totally and permanently incapacitated for the purposes of determining whether he or she can qualify for an increase in the rate of pension. The effect of the veteran’s war-caused incapacity must have rendered the veteran – i.e. caused him or her to be or become (Macquarie Dictionary online) – to be incapable or unable of undertaking remunerative work for more than a total of 8 hours per week. Accordingly, the veteran need not be completely unable to perform such work. He or she may be able to perform such work but is limited to doing so for no more than 8 hours per week. Once the effect of the war-caused injury on the veteran suffices to satisfy s 24(1)(b), the effect of his or her incapacity must then be assessed under s 24(1)(c). The latter section has these elements:
the veteran is prevented by reason only of the effect of his or her injury found under s 24(1)(b) from continuing to undertake remunerative work;
that preventative effect alone causes him or her to suffer a loss of income; and
the veteran would not be suffering from that loss if he or she was not affected by the war-caused injury.
9 As explained above, ss 24(1)(b) and (c) address similar, but distinct, scenarios produced by the effect of the war-caused injury on the veteran’s ability to undertake remunerative work. First, the effect of the injury will have brought about the inability of the veteran to engage in remunerative work for more than 8 hours per week (s 24(1)(b)). Secondly, he or she is prevented by reason of that effect alone from undertaking remunerative work that he or she had previously undertaken. Thirdly, that sole cause of the veteran being prevented from undertaking that work has resulted in a loss of income that the veteran would not have sustained if he or she were not affected by the injury. So, if the effect of the war-caused injury has actually caused that loss (i.e. a loss) of income, the veteran will qualify for a special rate of pension.
10 Nonetheless, s 24(2) creates two further scenarios that affect how s 24(1)(c) can apply. First, the veteran cannot rely on a loss of income if the effect of the war-caused injury did not cause him or her to cease engaging in the formerly remunerative work (s 24(2)(a)(i)) or some other cause incapacitated or prevented him or her from engaging in that remunerative work (s 24(2)(a)(ii)). That is, s 24(2)(a) identifies the circumstances in which the claimed loss of income cannot be linked to the effect of the war-caused injury. For example, the veteran simply may have decided that he or she did not want to work for a reason unrelated to the effect of the war-caused injury. But, as the Commission submitted, correctly, the expression “has ceased to engage in remunerative work”, entails that the veteran has left the workforce, and not that he or she is merely unemployed.
11 Secondly, s 24(2)(b) creates a beneficial easing of the impact of the word “alone” in s 24(1)(c). That provision applies where the veteran has not been engaged in remunerative work and, if he or she satisfies the Commission of three matters, the veteran is deemed to have met the second criterion in s 24(1)(c), namely he or she is prevented solely by the effect of the war-caused injury from engaging in the previous remunerative work. The three matters that s 24(2)(b) allows the veteran to rely on to ameliorate the strictness of the sole reason test in s 24(1)(c) are that:
he or she has been genuinely seeking to engage in remunerative work;
but for the effect of the war-caused injury, he or she would be continuing to seek to engage in remunerative work; and
the effect of the war-caused injury is the “substantial cause” – and not the sole cause – of the veteran’s inability to obtain such work.
It will also be necessary to consider later in these reasons the times at which the various elements of ss 24(1)(c) and (2)(b) must exist.
12 If a veteran who has applied for an increase in the rate of pension under s 15 cannot satisfy the requirements of s 24(1), he or she may still be eligible for a lesser increase under s 23. That section operates in respect of a veteran who is not totally and permanently incapacitated within the meaning of s 24(1)(b), but whose incapacity has resulted in him or her being only able to undertake part time or intermittent remunerative work. The relevant provisions in s 23 are s 23(1)(b), (c), (d), (2) and (3).
13 The general scheme of s 23(1) and (2) follows that of s 24(1) but with adaptations to take account of the differing impacts of the effects of war-caused injuries that leave the veteran with, on the one hand, some substantial capacity to engage in remunerative work (s 23) and, on the other, no, or a very minimal, capacity to do so (s 24). Thus, s 23(2) excludes a veteran who is capable of, or is actually, undertaking remunerative work for more than 50% of the ordinary time for that type of work or 20 hours per week from satisfying s 23(1)(b).
14 It is clear that when s 23(1)(c) repeats verbatim the terms of s 24(1)(c), the two are, nonetheless, referring to differing degrees of incapacity or effects of a war-caused injury on the veteran. The incapacity that s 23(1)(c) deals with must be of such a nature as satisfies s 23(1)(b) read with s 23(2). The expression “continuing to undertake remunerative work that the veteran was undertaking” in s 23(1)(c) must operate in respect of the pre-incapacity work, including the hours and nature of the work, that the veteran was engaged in and the consequent loss of income attributable to his or her reduced ability to perform at that level after, and by reason of, the effects of the injury. Section 23(3) follows, with adaptations, a similar scheme to that in s 24(2).
Consideration
15 The primary judge held that because Mr Smith had a work history, he needed to satisfy s 24(1)(c) and that s 24(2)(b) could never apply to him. Her Honour reasoned that the expression “who has not been engaged in remunerative work” in s 24(2)(b) supported that construction. In my opinion her Honour’s reasoning was not correct. A veteran who had engaged in remunerative work before the effects of a war-caused injury totally and permanently incapacitated him or her from working more than 8 hours per week, can be seen, objectively, to have lost income in a simple before and after comparison. However, the veteran’s entitlement to pension under s 24(1)(c) will also require the decision-maker to be satisfied that a loss of income has occurred solely because of the effect of the war-caused injury. The subsection does not require that all income lost by the veteran be related to the effect of the injury in all situations, although that will usually be the case because of the causative requirement introduced by the word “alone”. Thus, if a severe economic recession reduced employment opportunities at the time of an application under s 15, a veteran may face difficulties satisfying the “alone” criterion at that time. That would not prevent a later application succeeding if economic conditions subsequently improved but the veteran still could not find work.
16 Similarly, the veteran might suffer from a relatively minor or inconsequential disabling injury or condition that, when combined with his or her war-caused injury, made him or her unable to engage in work. It will be a question of fact, informed by commonsense, whether the war-caused injury alone brought about his or her situation of being unable to engage in work. For example, a veteran may return from service and suffer a traffic accident that results in a permanent physical disability (e.g. an impaired or amputated limb) that reduces but does not eliminate his or her earning capacity in undertaking work of the kind he or she previously performed. He or she may still remain in employment but at a reduced rate. However, if subsequently the veteran develops a war-caused injury or disease, such as a cancer or psychological condition, that prevents him or her continuing to engage in any remunerative work, the earlier impairment would or may play no role in the loss of income consequent on the later occurrence.
17 It is important that a beneficial provision like s 24(1)(c) be construed in a practical way. This is particularly so in today’s world, where forms of work and occupations are subject to constant change as technology eliminates or reduces some occupations and creates new ones. The expression “continuing to undertake remunerative work that the veteran was undertaking” in s 24(1)(c) must be construed in a realistic and practical way so as to avoid underlying technical constraints on its application to a veteran whose income earning capacity has been completely or significantly impaired.
18 The times may vary at which incapacity from war-caused injury operates to prevent a veteran from continuing to undertake remunerative work within the meaning of s 24(1)(c). For example, the immediate effect of an injury that blinded the veteran, would prevent him or her returning, after war service, to work in a career that required the use of his or her sight. On the other hand, the manifestation of a psychological war-caused injury or disease, may occur years after the veteran has re-entered the work force, so as to prevent him or her at that later time from continuing to pursue his or her work.
19 The scenarios in s 24(2)(a) can operate to disentitle a veteran to a pension under s 24. That disentitlement may arise in the example, just discussed, of the blind jeweller, who independently of war service, had suffered a disability that prevented him or her returning to that career. Equally, if a veteran, who played professional sport reached the age when he or she could no longer play that sport professionally, the development of a subsequent psychological injury or disease would not be the cause of the loss of his or her sporting income.
20 The importance of the words “remunerative work that the veteran was undertaking” in s 24(1)(c) is to connect the incapacity to the relevant loss of income by creating a before and after test or frame of reference. The veteran can satisfy that test, regardless of whether he or she genuinely seeks remunerative work after suffering the incapacity. Such attempts may be relevant, but they are not necessary, however, to demonstrate that the incapacity prevented the veteran from continuing to undertake that remunerative work.
21 Section 24(2)(b) is facultative. It can apply both to a veteran who has never been engaged in remunerative work and to one who had, but for any reason, subsequently ceased work, and later sought to obtain remunerative work. Section 24(2)(b) does not connect the loss of income to the veteran’s inability to continue remunerative work under s 24(1)(c). Yet, one way that a veteran could demonstrate that he or she was unable to engage in remunerative work, after a period in which the veteran had not been engaged in such work, would be to show that he or she had been seeking to do so and could not obtain such work (see s 28). A sympathetic or loyal employer who ceased, for any reason, to employ a veteran suffering a war-caused injury, may have been the only person willing to employ someone with such an injury to perform that kind of remunerative work. For example, the employer may no longer be able to afford the cost of employing the veteran or may have ceased business. Once that source of employment has ceased to be available, the veteran may be able to satisfy s 24(1)(c) merely because no other person would engage him or her in remunerative work by reason only of the incapacity from the war-caused injury. It may not be necessary to show that the veteran has sought to obtain such work because the particular circumstances of the now former employer make it clear that that person had treated the veteran in an exceptional or unique way. But, the veteran could also seek to bring himself or herself within s 24(2)(b) by demonstrating attempts to seek remunerative work.
22 The veteran can make an application under s 15 if he or she has already tried to seek and failed to obtain remunerative work within the meaning of s 24(2). If that were his or her position on the day the application was received, the Commission could make an assessment that the pension under ss 23 or 24 was payable. The first day of a period is a time “during the assessment period”, just as is any other day after that one, for the purposes of s 19(6) and (9). The ground for the application under s 15(1) for an increase in pension is that since the rate of the veteran’s pension was last assessed “the incapacity of the veteran has increased”. As Whitlam, Emmett and Stone JJ said in Repatriation Commission v Hendy (2002) 76 ALD 47 at 54-55 [37]:
“The consideration of what a veteran would probably have done, absent the service disabilities, is a hypothetical exercise. The language of s 24(1)(c) of the Act directs attention to the question of whether incapacity from the relevant condition alone prevents a veteran from continuing to undertake remunerative work. The provision does not contemplate that other factors are only to be taken into account if they, of themselves, prevent the veteran from working. The decision-maker is required to take into account any factor that plays a part or contributes to a veteran's being prevented from continuing to engage in remunerative work. If a period of time elapses after a veteran ceases remunerative work and before the commencement of the assessment period, lack of recent work experience, time out of the workforce and increasing age will be relevant for consideration under s 24(1)(c) of the Act. The decision-maker is required to consider the effect, contribution to, and relative weight to be attached to any or all of those factors during the assessment period. So long as the tribunal performs this exercise, the conclusions drawn from the assignment of the relative impact the various factors on the ability of the veteran to continue in remunerative work is not reviewable, except in exceptional circumstances. Moreover, having considered any or all of the factors which may have contributed to a veteran's incapacity, the tribunal is then required to determine whether it is the veteran's war-caused injury or war-caused disease, or both, alone which prevent the veteran from continuing to undertake remunerative work. Error on the part of the tribunal in determining whether the veteran's war-caused injury or war-caused disease is the sole determinant in the prevention of continued remunerative work is, similarly, not open to review.” (italic emphasis in original, bold emphasis added)
23 The veteran must sincerely or honestly do something to attempt or try to engage in remunerative work: Leane v Repatriation Commission (2004) 81 ALD 625 at 632 [28] per Emmett, Conti and Selway JJ. Their Honours held that the word “genuinely” in s 24(2)(b) referred to the subjective intention of the veteran. They said that the way in which a veteran might establish his or her case to satisfy the requirement in s 24(2)(b), that “he or she has been genuinely seeking to engage in remunerative work”, was a practical issue. Their Honours held that it was not essential that there be objective signs of active pursuit of remunerative work, although, in the ordinary course, it may be difficult for the veteran to establish the requirement in the absence of such objective material. They gave an example of a veteran who honestly wished to engage in remunerative work, had made a reasonable assessment of his or her disabilities, had reasonably concluded that he or she could only be employed in a particular type of work, was checking employment advertisements on the look-out for such work, but had not yet identified any such employment prospects (81 ALD at 632-633 [29]).
24 The above construction of s 24 is reinforced by considering how s 23 operates on the incapacity of a veteran from a war-caused injury that renders him or her incapable of undertaking remunerative work otherwise than on a part-time basis or intermittently (s 23(1)(b)). The scenarios in which s 23 applies, envisage that the veteran will be capable of engaging in remunerative work to a limited extent. Thus, the loss of salary, wages or earnings referred to in s 23(1)(c), which is the imperfect analogue of s 24(1)(c), ordinarily will be in the nature of a reduction, as opposed to a total or substantial loss, of 80% or so (as required by the test in s 24(1)(b)), in what the veteran would otherwise have been able to be paid or earn. Because s 23(1)(c) operates where the veteran is likely to have part-time or intermittent work, the circumstances in which he or she came to have less than a full-time workload often will expose why he or she has suffered a loss of salary, wages or earnings. That position would exist at the time that the Commission received the application for increased pension, i.e. on the first day of the assessment period. The fact that the incapacity had been the sole cause of a loss of earning capacity may emerge from the nature of the incapacity and or the objective scope it allows the veteran to engage in remunerative work as assessed under s 23(2), which requires consideration of what work the veteran does or is capable of doing.
25 Thus, s 23(3)(b) (which is the imperfect analogue of s 24(2)(b)) could be relied on by a veteran who genuinely has been seeking to engage in more, or a greater amount of, remunerative work. Indeed, ordinarily that subsection will apply to a veteran who has not been engaged in full-time remunerative work. The genuine seeking referred to in s 23(3)(b) will usually be in relation to obtaining increased hours of work over and above what the veteran has been able to achieve. The reason that the veteran would wish to apply for pension under s 23 is because, despite his or her attempts to get more work, it is not available when the application under s 15 is received. Once again, subsequent attempts to obtain more work may be relevant, but they cannot be essential for the decision-maker’s assessment. That is because the existing facts, at the commencing date of the assessment period (when the Commission received the application) often will reflect that the veteran at that date “has been genuinely seeking to engage in remunerative work”: i.e. ss 23(3)(b) and 24(2)(b) refer to historical seeking, and do not require, although they allow, subsequent genuine seeking for remunerative work.
Conclusion
26 The conditions specified in each of ss 23 and 24 are bedevilled with bewildering complexity. Regrettably the fog of the drafting style of this, like many Commonwealth Acts, has created a nearly impenetrable shroud over the meaning that the Court is expected to attribute to the intention of the Parliament. The cost to the community of this obscurity must be enormous. Two days of hearing by this Court were largely devoted to an attempt to make sense of key entitlements provided in the Act to persons who have been injured in war conditions in service of this nation. Perhaps it suffices to say that s 23 commences on page 187 of the first volume of the latest reprint of the Act. The Commission properly offered to submit to an order that it pay Mr Smith’s costs whatever the outcome of the appeal. However, in the event, he is entitled to such an order because his appeal succeeds.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. |
Associate:
IN THE FEDERAL COURT OF AUSTRALIA | |
VICTORIA DISTRICT REGISTRY | |
GENERAL DIVISION | VID 782 of 2012 |
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA |
BETWEEN: | KENNETH ALLAN SMITH Appellant
|
AND: | REPATRIATION COMMISSION Respondent
|
JUDGES: | RARES, BUCHANAN AND FOSTER JJ |
DATE: | 1 MAY 2014 |
PLACE: | Sydney (via video link to Melbourne) |
REASONS FOR JUDGMENT
BUCHANAN J:
Introduction
27 This appeal raises important questions about the entitlement of veterans, who have given “war service” on behalf of Australia, to the various rates of pensions provided by the Veterans’ Entitlements Act 1986 (Cth) (“the Act”).
28 The appellant is a veteran who undertook national service with the Australian Army from 22 April 1970 to 9 December 1971. During that period he served in Vietnam from 9 November 1970 to 4 November 1971. He has been diagnosed as suffering post-traumatic stress disorder (“PTSD”) and other maladies as a result of his war service and has been granted a general rate of pension pursuant to s 22 of the Act. The rate at which he has been granted his pension is 100 percent. I shall explain the way in which an assessment of that rate of pension is made shortly.
29 Apart from the general rate of pension, the Act also provides for the payment of an “intermediate rate” of pension under s 23 and a “special rate” of pension under s 24. Each of the intermediate rate of pension and the special rate of pension are higher than 100 percent of the general rate of pension. The special rate of pension approaches three times the amount of 100 percent of the general rate of pension while the intermediate rate is a little under twice 100 percent of the general rate. It may be seen, therefore, that each of the intermediate and the special rate of pension is substantially more beneficial to a veteran than the general rate, even at 100 percent of that rate.
30 The appellant’s general rate of pension was granted to him with effect from 8 March 2006. On 31 March 2009, he applied for an increase in his pension beyond the general rate. At that time he was 60 years old, having been born on 9 January 1949. On 28 May 2009, a delegate of the respondent ruled that the appellant was not entitled to a pension at the special rate or at the intermediate rate. The result was that his pension continued at 100 percent of the general rate.
31 On 13 July 2010, the Veterans’ Review Board, to whom the appellant was entitled to apply for review of the delegate’s decision, also decided that the appellant was not entitled to either the special rate of pension or the intermediate rate of pension.
32 The appellant was then entitled to apply to the Administrative Appeals Tribunal (“the AAT”) for review of the Board’s decision and did so. His application for that review was lodged on 6 August 2010. By a decision given on 16 February 2012, a senior member of the AAT ruled that the appellant was not entitled to disability pension at the special rate. No consideration appeared to be given, and no ruling was made, as to whether the appellant was entitled to pension at the intermediate rate.
33 The Administrative Appeals Tribunal Act 1975 (Cth) gave the appellant a right to appeal from the decision of the AAT to this Court on a question of law and the appellant exercised that right. On 19 September 2012, the appeal to this Court was dismissed (Smith v Repatriation Commission [2012] FCA 1043).
34 The Federal Court of Australia Act 1976 (Cth) then gave the appellant a right of appeal to a Full Court of this Court and again the appellant exercised that right, filing his notice of appeal on 9 October 2012. So it is that the present appeal comes before the Court. It must be focussed upon the question which was before the primary judge, namely whether an error of law was made by the AAT. Before that question is further addressed, I need to outline the statutory scheme in more detail.
The legislative scheme
35 Part II of the Act, which is entitled “Pensions, other than service pensions, for veterans and their dependants”, governs the questions which arise on the present appeal. Division 2 of Part II deals with eligibility for pension. There is no issue that the appellant is a veteran who is entitled to a pension. Division 3 (ss 13A to 21) deals with “Claims for pensions and applications for increases in pensions” and Division 4 (ss 21A to 29) deals with “Rates of pensions payable to veterans”. These are the two divisions of Part II which are most relevant.
36 Section 14 of the Act permits a claim for a pension. Section 15 permits an application for increase in pension. Section 19 states the way in which claims and applications shall be determined. In the case of a veteran, like the appellant, who is already in receipt of a pension and who applies for an increase in the rate of pension, s 19(4A) directs that the application be dealt with in accordance with s 19(5A), (5B) and (5C) and be determined under s 19(5D). The scheme which proceeds thereafter is complicated, with a variety of intersecting provisions and requirements to be taken into account. Section 19(5B) provides:
19(5B) The Commission must assess the matters set out in subsection (5C) in accordance with whichever of sections 22, 23, 24, 25, 26 and 30 are applicable in the particular case.
(Sections 25, 26 and 30 are not relevant in the present case.)
37 For present purposes, therefore, s 19(5B) directs that an assessment must be made in accordance with whichever of s 22 (general rate of pension), s 23 (intermediate rate of pension) or s 24 (special rate of pension) applies to the case in question. The matters which must be assessed are stated by s 19(5C) in the following terms:
19(5C) The matters that the Commission must assess are:
(a) the rate or rates at which the pension would have been payable from time to time during the assessment period; and
(b) subject to subsection (6), the rate at which the pension is payable.
38 Section 19(6) provides:
19(6) Where the Commission has, pursuant to subsection (5C), assessed that the pension was payable at some time during the assessment period at the rate provided by section 23 or 24 then, subject to section 24A, the rate at which the pension is payable shall not be lower than the rate provided by whichever of those sections applied, or applied most recently, during the assessment period.
(Section 24A was not here relevant.)
39 Section 19(5D) provides:
19(5D) After making an assessment under subsection (5C), the Commission must determine that pension is payable at the rate assessed.
40 The effect of these statutory directions in the present case was that an assessment was required as to whether at any time during the “assessment period” a pension was payable in accordance with s 23 (intermediate rate) or s 24 (special rate). If so, the most recent such entitlement was to be determined as the rate of pension payable. The assessment period commences on the date an application is made and concludes when the decision is made. This means that the entitlement of the veteran is not to be judged only at the time that the application is made. The position must be assessed by reference to any relevant circumstance which occurs up to the time of decision. The entitlement may increase or decrease during that period, but provided that a pension was payable at some time during the assessment period a veteran will receive either the intermediate rate or the special rate, whichever is applicable, or in the case that both are applicable, whichever is the most recently applicable. Because this arrangement applies to applications for increase in pension, it commences from the premise that some level of pension at the general rate is already being paid.
41 The general rate of pension is assessed under s 22 of the Act. First, an assessment must be made under s 21A of the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, according to the provisions of the approved Guide to the Assessment of Rates of Veterans’ Pensions, which is prepared pursuant to the provisions of s 29 of the Act. Assessment of the degree of incapacity is to be determined in increments of 10 percent and is not to exceed 100 percent. Section 22 then provides an entitlement to the general rate of pension at the same percentage of the general rate as the percentage determination of incapacity. The appellant was entitled to the general rate of pension at 100 percent.
42 Sections 23 and 24 of the Act (so far as relevant to the present case) provide as follows:
23 Intermediate rate of pension
(1) This section applies to a veteran if:
(aa) the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(aab) the veteran had not yet turned 65 when the claim or application was made; and
(a) either:
(i) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
… and
(b) the veteran's incapacity from war-caused injury or war-caused disease, or both, is, of itself alone, of such a nature as to render the veteran incapable of undertaking remunerative work otherwise than on a part-time basis or intermittently; and
(c) the veteran is, by reason of incapacity from war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free from that incapacity; and
(d) section 24 or 25 does not apply to the veteran.
(2) Paragraph (1)(b) shall not be taken to be fulfilled in respect of a veteran who is undertaking, or is capable of undertaking, work of a particular kind:
(a) if the veteran undertakes, or is capable of undertaking, that work for 50 per centum or more of the time (excluding overtime) ordinarily worked by persons engaged in work of that kind on a full-time basis; or
(b) in a case where paragraph (a) is inapplicable to the work which the veteran is undertaking or capable of undertaking – if the veteran is undertaking, or is capable of undertaking, that work for 20 or more hours per week.
(3) For the purpose of paragraph (1)(c):
(a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, to the extent set out in paragraph (1)(b) shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity:
(i) if the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both;
(ii) if the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; or
(iii) if the veteran has been engaged in remunerative work on a part-time basis or intermittently for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; and
(b) where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented, by reason of that incapacity, from continuing to undertake remunerative work that the veteran was undertaking.
24 Special rate of pension
(1) This section applies to a veteran if:
(aa) the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(aab) the veteran had not yet turned 65 when the claim or application was made; and
(a) either:
(i) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
… and
(b) the veteran is totally and permanently incapacitated, that is to say, the veteran's incapacity from war-caused injury or war-caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and
(c) the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity;
…
24(2) For the purpose of paragraph (1)(c):
(a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if:
(i) the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or
(ii) the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; and
(b) where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.
…
43 The appellant satisfied the requirements of s 23(1)(aa), (aab), (a)(i) and s 24(1)(aa), (aab) and (a)(i). He made an application under s 15 for an increase in the rate of his pension; he was under 65 years of age and was determined to be at least 70 percent incapacitated in accordance with s 21A.
44 The appellant was also found, by the AAT, to satisfy the condition in s 24(1)(b). He was rendered incapable by his war-caused injury or disease alone of undertaking remunerative work for aggregate periods of more than eight hours a week. In my view, that circumstance also satisfied the terms in s 23(1)(b), in that the appellant was only capable of working, if at all, part-time or intermittently.
45 The central issue before the AAT, and the initial issue which requires consideration on this appeal, concerns the operation of s 24(1)(c) as that provision is affected by s 24(2). In Flentjar v Repatriation Commission (1997) 26 AAR 93; 48 ALD 1 (“Flentjar”), Branson J (with whom Beaumont and Merkel JJ agreed) distilled some issues which were specific to that case concerning the operation of s 24(1)(c) of the Act. The issues thereby identified appear to have become regarded by the AAT as a guide to the way in which s 24(1)(c) should be applied. Recently, in Richmond v Repatriation Commission [2014] FCA 272 (“Richmond”), Dodds-Streeton J referred to cases in the Court where that approach has also been followed. There is no reason to think that the distillation of the issues in Flentjar was not accurate and perfectly appropriate for that case. However, there are dangers in adapting a distillation of issues based upon particular facts in one case to another case or to cases generally (see also Byrne v Repatriation Commission [2001] FCA 1134 at [11]; Repatriation Commission v Connell (2011) 197 FCR 228 at [31]). I prefer, in the present case, to approach the construction of s 24(1)(c) and its interaction with s 24(2) by reference to provisions of the Act itself.
46 A number of other authorities were referred to in the course of the appeal, but none seem to me to touch directly on the matters which require decision on this appeal, or to provide a reason to depart from the views I have formed about the operation of ss 23 and 24, so far as they relate to the present case. Not surprisingly, the earlier cases were focussed, as the present one must be, on the issues presented for actual determination in those cases.
Section 24 – Special rate of pension
47 Section 24(1)(b) and (c), when read together, state a composite test containing a series of conditions. First, s 24(1)(b) requires that a veteran be rendered, by the war-related incapacity alone, incapable of working more than eight hours per week. Secondly, s 24(1)(c) requires that the veteran be prevented, by that incapacity alone (i.e. not for other reasons) from continuing earlier remunerative work. Thirdly, s 24(1)(c) requires that prevention for that reason from continuing that work be the cause of a loss of earnings. Fourthly, s 24(1)(c) requires that the loss of earnings would not be suffered but for the incapacity.
48 The operation of s 24(1)(c) is capable of being informed by the provisions of s 24(2). The overall effect of s 24(1)(c) may be summarised as one which requires a demonstrated loss of earnings as the direct result of the war-related incapacity, and only for that reason. Section 24(2)(a) supplements the requirements of s24(1)(c) by identifying specific circumstances which will cause it not to be satisfied. Those circumstances, in effect, state the opposite to the conditions in s 24(1)(c) itself. Thus, there is no established loss of earnings by reason of the incapacity if remunerative work was ceased for other reasons (s 24(2)(a)(i)), or if the veteran is also incapacitated or prevented from doing remunerative work for some other reason (s 24(2)(a)(ii)). In this assessment, of course, it continues to be accepted that the veteran is actually incapacitated in any event (“a veteran who is incapacitated …”). The purpose of the enquiry is to see whether, nevertheless, there are other explanations for economic loss so that the incapacity is not the only reason for it.
49 Section 24(2)(b) provides some relief from the potentially harsh consequences of this arrangement. It applies where remunerative work is not being done. In my view, it accommodates a cessation of earlier remunerative work, as well as a circumstance where a veteran has not worked since injury, or since the development of the incapacity. In all those circumstances, in my view, a veteran may demonstrate genuine efforts to obtain work which are made fruitless by the incapacity. That is, the efforts would continue but for the incapacity and the incapacity is the substantial cause of inability to obtain work. Those circumstances are taken to satisfy the basic test in s 24(1)(c) of being actually prevented by the incapacity from continuing remunerative work. Economic loss (i.e. loss of the opportunity for economic gain by way of income) follows naturally enough from this scenario. The search is for remunerative work. The economic consequence of failure to obtain it is the result of the incapacity.
50 The primary judge in the present case took the view (with which I respectfully disagree) that s 24(2)(b) only operated where a veteran had not been engaged in remunerative work at all since becoming incapacitated. That approach appears to have been accepted by Dodds-Streeton J in Richmond. Her Honour appears to have relied (at [74]) on the judgment under appeal in the present case.
51 On the view which I take, the test in s 24(2)(b) is one to be applied at the time when the assessment is required to be made under s 19(5C). A veteran who has not been engaged in remunerative work at a particular point in time (i.e. before or during the assessment period) may nevertheless satisfy s 24(1)(c) by demonstrating that there has been a genuine effort to engage in remunerative work, which effort would continue but for the incapacity, and that the incapacity is the substantial cause of an inability to obtain remunerative work. In that circumstance, the veteran is treated as having been prevented from continuing to undertake remunerative work earlier undertaken. Where the requirements of s 24(1)(c) are capable of being addressed directly, because a veteran is able to show a non-continuation of earlier remunerative work, it will not be necessary to have regard to s 24(2)(b). However, there may be circumstances, and the present case was one in my view, where a veteran will be entitled, notwithstanding earlier cessation of remunerative work (whatever the reason), to point to genuine efforts to re-engage in remunerative work. Such an approach does not subvert the operation of s 24(1)(c). It merely provides an alternative, and intended, method of satisfying s 24(1)(c).
52 It will be necessary to come in due course to the facts of the present case. On the view taken by the AAT, the appellant was disentitled to the benefit of s 24 by reason of the fact that s 24(2)(a)(i) applied to the remunerative work that he had earlier been undertaking, namely that he ceased that work for reasons other than his accepted incapacity. The AAT then took the view that efforts to find work earlier than the assessment period should not be taken into account so that s 24(2)(b) was not engaged. The latter finding, in my respectful view, was an error of law which was not corrected by the primary judge.
Section 23 – Intermediate rate of pension
53 Further discussion of the operation of s 24 will not be useful until the facts and the reasons for judgment of the AAT have been more fully explored. However, before that is done, it is convenient to make some general points about the operation of s 23. Although the scheme of s 23 broadly corresponds with the scheme of s 24, there are some important differences which arise from the fact that s 23 deals with incapacities which are not totally disabling. The principal differences are reflected in the inclusion of s 23(1)(d) (which renders s 23 inapplicable if s 24 applies), s 23(2) (which governs the operation of s 23(1)(b)) and s 23(3)(a)(iii) (which accommodates the possibility that a veteran is working less than full time for reasons other than the relevant incapacity).
54 Like s 24, s 23 assumes the existence of a disabling incapacity. Section 23(1)(b) and (c), when read together, also state a composite test containing a series of conditions. In the case of s 23, s 23(2) states the degree of incapacity which must be established for the purpose of s 23(1)(b). Accordingly, in the case of s 23 the first condition is that the veteran is rendered incapable of working more than 50% of a full-time work load (or more than 20 hours per week) by the war-related incapacity alone. The second, third and fourth conditions, which are supplied by s 23(1)(c), are in identical terms to s 24(1)(c), but there are indications elsewhere that those conditions must be applied in the circumstances of lesser incapacity to which s 23(1)(b) is addressed. The explicit reference in s 23(3)(a) to an incapacity to the extent set out in s 23(1)(b) should be noted in this connection. So also should the existence and operation of s 23(3)(a)(iii), which is specifically addressed to reasons for engagement in part-time or intermittent work.
55 One difficult question which arises in the present case is whether there was any scope for an examination of a possible entitlement for the appellant under s 23 when he was found not to be entitled to a special rate of pension under s 24. Section 23(1)(d) requires that s 24 not apply before any question of an entitlement under s 23 might arise, but s 19(5B) and (6) appear to contemplate that the assessment to be made will consider whether s 23 applies. As earlier indicated, both the delegate and the Veterans’ Review Board, at least formally, rejected an entitlement under s 23 as well as s 24.
56 In the present case, the AAT found that s 24(1)(b) (total incapacity) was satisfied. In my view, it must follow that s 23(1)(b) was also satisfied as it is a lesser test directed at a lower entitlement. Whatever level of disability applies to a particular veteran, s 24(1)(c) and s 23(1)(c) apply further conditions to be satisfied which are, on the face of it, expressed in the same terms, although s 23(3)(a)(iii) adds a further ingredient to consider. Do s 24(1)(c) and s 23(1)(c) apply the same test at different levels of incapacity, so that a decision about the operation of s 24(1)(c) dictates the result for any possible application of s 23(1)(c)? On this approach, after an initial assessment about whether s 24(1)(b) or s 23(1)(b) applies, a decision-maker need consider only s 23 or s 24 but not both.
57 An alternative approach would accept that a veteran may fail to satisfy the requirements for a special rate of pension under s 24 (even though totally incapacitated for the purpose of s 24(1)(b)), but may nevertheless satisfy the requirement for an intermediate rate of pension under s 23. It seems to me to be possible that a particular fact situation which defeated recognition in accordance with s 24(1)(c) might nevertheless justify recognition under s 23(1)(c). One possibility which comes to mind is where an incapacitated veteran who has managed to work more than half-time despite his or her incapacity, is retrenched (so that s 24(2)(a)(i) applies) and then manages to obtain part-time work but only at, say, 30% or 40% of a full-time load. I can see no immediate reason why the intermediate rate of pension would not be payable in such a case (see, for example, Repatriation Commission v Connell (2011) 197 FCR 228 at [26]-[30]).
58 On the facts of the present case I have come to the view that the respondent was correct to submit that it would have made no difference to the decision of the AAT (given its factual findings) if it had separately addressed the requirements of s 23. That might have provided a reason to withhold relief on the present appeal if failure to address s 23 was the only difficulty. However, an examination of that kind may still be necessary when attention is given, as in my view it should be, to the appellant’s efforts to obtain work, for the reasons given below.
The appellant’s circumstances
59 The AAT recorded:
1. Kenneth Smith is receiving disability pension at 100 per cent of the general rate in respect of his accepted war-caused conditions of bilateral sensorineural hearing loss, bilateral tinnitus, post traumatic stress disorder (PTSD), solar keratosis and tinea. …
60 The further summary of the appellant’s circumstances which follows is also distilled from the findings of the AAT. After his war service, the appellant had short periods of employment until about June 1974 when he worked as an electrical mechanic for about five years with an electrical contractor. He then moved to Queensland and worked in the coal mining industry as an electrical contractor, commencing in 1979. In 1982, he suffered a serious workplace injury which resulted in serious damage to his right leg and ankle and his left leg. His left leg was amputated above the knee. After about five years recovering from his injuries, the appellant and his wife purchased a 500 acre property in Victoria and operated a wool and beef farming business. He moved back to Queensland in 1998, finding work as an electrical fitter/mechanic servicing underground mining equipment. All but 167 acres of the property were sold and the balance left unoccupied. In 2000, he returned to Victoria. He worked in various jobs in the few years thereafter until leaving employment with Britax Aero Services in mid-2003. He then commenced a feed lot business with his wife and in partnership with their son on the Victorian property. The business was abandoned in 2006 because it was not making a profit.
61 The short history I have recounted does not take into account the difficulties which the appellant’s various war service related incapacities created for him in maintaining remunerative work. As mentioned earlier, he was assessed in 2006 as 100 per cent incapacitated in accordance with s 21A of the Act. Relevantly, for present purposes, the appellant did not work after 2006, but he gave some evidence that he had attempted to find work at about that time and that those efforts were discontinued only because it became apparent to him that his war service related incapacities would prevent remunerative work being obtained. On one view, those efforts might be said to be ones accommodated by s 24(2)(b) (and s 23(3)(b) if it applied).
62 When the appellant made his application for an increase in the rate of pension being paid to him, the application was refused by a delegate of the respondent, so far as it concerned both s 24 and s 23, for the reason that the appellant’s cessation of remunerative work was not the cause of a loss of salary or wages or of earnings on his own account. That was because the feed lot business was producing losses and it was held, therefore, that the appellant did not satisfy the basic requirement in s 24(1)(c) or s 23(1)(c) that he suffer loss of income as a result only of his incapacity. The Veterans’ Review Board looked to a point further in the past, presumably to see if the position improved for the appellant by so doing. However it concluded that his employment with Britax Aero Services ceased in mid-2003 for reasons related to the loss of the appellant’s left leg and because of ongoing conflict with his manager. Those circumstances defeated the claims under s 24 and s 23 by reason of the operation of s 24(2)(a)(i) and s 23(3)(a)(i). Neither the delegate of the respondent nor the Veterans’ Review Board gave attention to the possibility that the appellant could make good the requirements of s 24(1)(c) or s 23(1)(c) by relying on s 24(2)(b) or s 23(3)(b).
63 The AAT took a different approach. The appellant’s physical injuries arising from his workplace accident in 1982 were significant to the reasoning of the AAT even though the AAT was satisfied that the appellant was rendered incapable of working more than eight hours per week due to his war-caused condition of PTSD alone and he therefore satisfied s 24(1)(b) of the Act. (As I said earlier, I think it follows that he also satisfied s 23(1)(b)). The AAT was satisfied that the appellant’s physical condition did not prevent him from working more than eight hours a week. Accordingly, his physical condition could not provide a complete explanation for the lack of remunerative work. Nevertheless, because of his physical injuries an entitlement under s 24 was rejected. The operation of s 23 was not considered.
The errors of law
64 In my respectful view, the AAT made two errors of law. First, and I will return to this below, the AAT disregarded efforts made by the appellant to obtain work since closing the feedlot business in 2006. The AAT put such matters out of account because it took the view that such efforts were required to be made during the assessment period – i.e. commencing when an application was lodged.
65 Secondly, it will be apparent from the earlier discussion that I also hold the view that there was a requirement to address whether any entitlement arose under s 23. In the present case, the failure to deal with s 23 may not have provided a sufficient reason to uphold the appeal in the absence of the first error, because it is apparent from the findings of the AAT that it would also have rejected any entitlement under s 23. However, in my view, the possibility may not be excluded that such rejection would have been based on the same legal error about the operation of s 23(3)(b) as was made in connection with s 24(2)(b).
66 The primary judge approved the approach taken by the AAT to the first issue but, in my respectful view, her Honour erred in so deciding. The second question was not addressed in the proceedings below.
67 The AAT concluded that the appellant ceased to work in 2006 for reasons which included his physical injuries. The AAT said, after examining the appellant’s more recent work and medical history:
45. Taking all relevant matters into account the Tribunal is reasonably satisfied that Mr Smith’s physical injuries played an important part in his inability to continue to work, so the Tribunal finds that Mr Smith’s PTSD is not the only factor preventing him from continuing to undertake his previous work, so the answer to question (3) is no.
The question (3) which the AAT referred to was the third issue distilled in Flentjar, but in my respectful opinion approaching the matter that way distracted attention from the operation of the Act. The finding that physical injuries played “an important part” in the appellant’s inability to continue to work must be related to the circumstances in 2006. That is when the appellant ceased to continue to work. However the second part of the AAT’s conclusion in my view raises other questions. Accepting that it was open to the AAT to conclude that the appellant’s PTSD was not the only factor which in 2006 prevented him from continuing to undertake his previous work, there appears not to be any disclosed foundation for a finding that his physical disabilities were what was preventing him from working after that date. The question of what might be preventing a resumption of remunerative work was an important one in its own right.
68 Although the AAT said that the appellant’s physical injuries played an important part in his inability to continue working, the extent of that contribution was not otherwise quantified, except that the disabling effects of the physical injuries did not overlap completely with the war-related incapacity. As the physical injuries did not render the appellant incapable of working more than eight hours per week, and as he had in fact worked consistently more than eight hours per week in the past despite his physical injuries, in my view the possibility must remain that an entitlement might arise under s 23 if not s 24.
69 The AAT also concluded that it should not take into account at all the efforts made by the appellant to obtain work which predated the assessment period. That appears to me, as I have already said, to have been a clear error of law. It follows from the scheme of the Act set out earlier that it must be possible to assess the merits of a claim at the date that an application is lodged, on which date the assessment period commences. That is because there is a requirement to assess whether any entitlement arises at any time during the assessment period. That means that it must be open to a veteran to rely upon genuine efforts to find work before the application is made. That would not be possible if the question is to be tested only after the date of the application.
70 Two consequences flow from this. First, the AAT made an error of law in excluding from its consideration efforts made by the appellant to find work in the period after he ceased work in 2006 and before he made his application. Secondly, it draws attention to the inadequacy of the finding of the AAT that the physical injuries remained a factor preventing the appellant from working. I see no reason why a veteran would be disentitled to make an application for an increase in pension if he or she had ceased to work for particular reasons at one point in time, then commenced genuine efforts to find work and was then prevented only by a war-caused injury or disease from obtaining such work. Ceasing to work at a particular time for reasons other than war-caused injury or disease, including for reasons which might be entirely beyond the control of a veteran (such as redundancy for example), is not a permanently disentitling circumstance. Nor is it necessary to make efforts during an assessment period which might be futile and humiliating if there is adequate evidence before an application is made that genuine efforts have been made to obtain employment, those efforts have been without success, and the lack of success is due to the war-caused injury or incapacity. That is accommodated in terms by s 24(2)(b).
71 As I indicated earlier, in my view the AAT technically made a second error of law by not examining the question whether the appellant had an entitlement to an intermediate rate of pension at any time during the assessment period. Such an assessment is prima facie required by s 19(5C) and (6) of the Act.
72 In fact, when he made his application on 31 March 2009 the appellant simply sought a full review of his pension and applied for an increase in its rate. His application was not confined (and on the view I take could not be confined) to an application for the special rate only. Both the delegate and the Veterans’ Review Board gave consideration to whether the appellant was entitled to a pension at either the special rate or the intermediate rate. The AAT did not. Although that was not a matter which was the subject of any ground of appeal before the primary judge, nor of any ground of appeal to the Full Court, in my view it was necessary for the AAT to give consideration to whether the appellant was entitled to a pension at the intermediate rate after it rejected his claim for a pension at the special rate. The failure to address that question was an error of law.
73 At the hearing of the appeal, when this issue was raised, the respondent very properly took no issue with it being considered by the Full Court. However, the respondent argued that there would be no point remitting that question to the AAT for further consideration, because it was clear from the reasons for decision of the AAT (which were not disturbed on appeal before the primary judge) that consideration of the intermediate rate of pension would have resulted in rejection of any entitlement to that rate also. I would accept that proposition so far as it goes, if that was the only issue for attention. However, in my view this matter should now receive attention when the matter as a whole receives further attention, if the appellant is again found not to be entitled to a pension at the special rate.
74 In my view, in summary, the AAT made two errors of law. The first was in treating as irrelevant efforts to obtain work which pre-dated 31 March 2009. The second was in failing to address whether, notwithstanding its findings with respect to s 24, the appellant may have had an entitlement to an intermediate rate of pension under s 23. For the first of those reasons the matter should be remitted for further attention by the AAT, when the second issue also should receive attention.
The decision below
75 The views which I have expressed do not accord with the approach taken by the primary judge. No question arose before the primary judge concerning the possible application of s 23 of the Act. For the reasons earlier explained, I am satisfied that it is appropriate to deal with it on the appeal, even though ultimately it would not in my view lead on its own to any relief. No different position was suggested by the respondent.
76 The primary judge agreed with the AAT that the appellant was required to demonstrate genuine efforts to obtain employment during the assessment period. In Richmond, Dodds-Streeton J appeared (at [107]) to adopt that view. For the reasons I have given, in my respectful view that is not the correct construction to be applied.
77 The primary judge also took the view that s 24(2)(b) could not apply in the present case because it only applied to a veteran who had no work history following military service (see also Richmond at [74]). The appellant and respondent each agreed that s 24(2)(b) was not confined in its operation to veterans who did not or could not work following military service. I agree also.
Conclusion
78 I would uphold the appeal, set aside the decision of the AAT and remit the matter for further consideration by the AAT of the whole of the appellant’s application. The appellant should have his costs of the appeal and of the proceedings before the primary judge.
I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. |
Associate:
Dated: 1 May 2014
IN THE FEDERAL COURT OF AUSTRALIA | |
VICTORIA DISTRICT REGISTRY | |
GENERAL DIVISION | VID 782 of 2012 |
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA |
BETWEEN: | KENNETH ALLAN SMITH Appellant
|
AND: | REPATRIATION COMMISSION Respondent
|
JUDGES: | RARES, BUCHANAN AND FOSTER JJ |
DATE: | 1 may 2014 |
PLACE: | SYDNEY (VIA VIDEO LINK TO MELBOURNE) (HEARD IN MELBOURNE) |
REASONS FOR JUDGMENT
FOSTER J:
Introduction
79 The appellant, Mr Smith, served in the Australian Army as a National Service conscript from 22 April 1970 until 9 December 1971. He rendered eligible war service in Vietnam within the meaning of the Veterans’ Entitlements Act 1986 (Cth) (VE Act) from 9 November 1970 to 4 November 1971, a period of almost 12 months (see ss 5B, 6, 6C, 6F and 7 of the VE Act and Sch 2, Item 4 to that Act).
80 The appellant was an electrical mechanic by trade. After completing his army service, he worked in various jobs as an electrical contractor. In April 1982, the appellant sustained serious injuries in an industrial accident while working at Mt Isa, Qld. As a result, his left leg was amputated above the knee. His right leg and ankle were also seriously injured in the same accident. The appellant’s injuries were so severe that he was unable to work for five years. He resumed working in 1987. Between 1987 and 2006, the appellant worked in various jobs, including as a farmer and as an electrical fitter. On 29 May 2006, the appellant ceased work altogether. For almost 19 years the appellant worked regularly notwithstanding his leg-related injuries.
81 In 2004, the appellant was diagnosed with post-traumatic stress disorder (PTSD).
82 From early 1997, the appellant had complained of difficulty with his right leg. In February 2009, he received a total right knee replacement.
83 The appellant currently receives a pension under the VE Act at 100% of the general rate in respect of the following war-caused conditions, namely: Bilateral sensorineural hearing loss, bilateral tinnitus, PTSD, solar keratosis and tinea. These conditions were accepted by all relevant decision-makers (including the respondent) as being war-caused injuries or war-caused diseases (as to which, see s 9 and s 9A of the VE Act), or both, within the meaning of those expressions in the VE Act and for the purposes of that Act. Under s 13(1) of the VE Act, because he is suffering from war-caused ailments, the appellant is entitled to receive a pension by way of compensation for those ailments. This much is not in dispute.
84 On 31 March 2009, when he was 60 years of age, the appellant applied, pursuant to s 15(1) of the VE Act, for an increase in the rate of his pension. On 28 May 2009, the respondent rejected that application. On 13 July 2010, the Veterans’ Review Board (VRB) affirmed the respondent’s decision. The appellant then sought a review of the VRB’s decision in the Administrative Appeals Tribunal (Tribunal). On 16 February 2012, the Tribunal affirmed the VRB’s decision.
85 On 14 March 2012, the appellant appealed from the Tribunal’s decision pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). On 19 September 2012, a judge of this Court dismissed that appeal with costs.
86 The appellant appealed from the decision of the learned primary judge on 9 October 2012. He seeks orders setting aside the orders of the primary judge and the decision of the Tribunal. He says that his case should be remitted to the Tribunal to be decided again according to law. He seeks his costs of the appeal and of the proceeding below.
87 The ultimate issue in the case is whether the appellant’s pension should be paid at a higher rate than the general rate, or whether it should continue to be paid at the general rate. Section 23 of the VE Act contains the requirements which must be met by a veteran who is to be paid at the intermediate rate. Section 24 specifies the requirements for payment at the special rate. The intermediate rate is almost twice the general rate and the special rate is almost three times the general rate.
88 It was common ground before the Tribunal and before the primary judge that the appellant satisfied the requirements of s 24(1)(aa) to (a) of the VE Act because:
(a) He had made an application under s 15(1) of the VE Act for an increase in the rate of the pension which he was receiving (s 24(1)(aa)); and
(b) He had not yet turned 65 when that application was made (s 24(1)(aab)); and
(c) The appellant’s degree of incapacity from war-caused injury or war-caused disease, or both, had been determined under s 21A of the VE Act to be at least 70% or had been so determined by a determination that was in force (s 24(1)(a)(i)).
89 The Tribunal approached the matter upon the basis that there were two issues for it to determine. It formulated those two issues in the following terms:
(a) Whether, as at the date of his application for a pension increase (31 March 2009), Mr Smith was incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and
(b) If so, whether it was his war-caused incapacity alone which prevented him from continuing to undertake the remunerative work that he had been undertaking thereby causing a loss of salary, wages or earnings on his own account which he would not be suffering if he had been free of that incapacity.
90 As framed, those issues principally concerned the true construction of ss 24(1)(b), 24(1)(c) and 24(2)(b) of the VE Act.
91 The Tribunal was reasonably satisfied that the appellant’s PTSD was not the only factor preventing him from undertaking his previous work. For that reason, the Tribunal went on to hold that the appellant had not satisfied the requirements of s 24(1)(c) of the VE Act. The Tribunal also concluded that during the relevant assessment period, the appellant had not been genuinely seeking to engage in remunerative work and thus had not satisfied s 24(2)(b) of the VE Act with the consequence that he could not engage s 24(1)(c) of the VE Act via s 24(2)(b) of that Act.
92 The primary judge found no error of law in the Tribunal’s decision. She also held that the Tribunal had not taken irrelevant considerations into account when it came to assess the medical evidence in relation to the appellant’s ailments and therefore held that the appellant had not made out his attack on the Tribunal’s decision embodied in the fourth question of law raised by him before her.
The Appellant’s Grounds of Appeal
93 In his Notice of Appeal in the Full Court, the appellant specified seven grounds of appeal as follows:
1. Her Honour erred in holding [at 34] that section 24(2)(b) of the Veterans’ Entitlements Act 1986 (Cth) (“the Act”) deals only with veterans who have no work history following military service.
2. Her Honour erred in holding [at 41] that section 24(2)(b) of the Act requires a veteran to satisfy the decision maker that he or she had been genuinely seeking remunerative work during the assessment period.
3. Her Honour erred in declining [at 50] to hold each of the appellant’s complaints that:
(a) it was not clear from the AAT decision which physical injuries the AAT considered prevented the appellant from working; and
(b) the AAT failed to find what work had been lost to the appellant by reason of his physical injuries;
disclosed an error of law.
4. Her Honour [at 54] misunderstood the appellant’s reliance on Repatriation v Connell (2011) 197 FCR 228 which was invoked in support of the proposition that a failure to consider the nature and quality of the relevant remunerative work led the Tribunal to ask itself whether the appellant was prevented from undertaking all types of remunerative work.
5. Her Honour erred in holding that the Tribunal was not required to consider the nature and quality of the remunerative work that the veteran claimed to be unable to undertake by reason alone of PTSD.
6. Her Honour erred in applying Politis v Federal Commissioner of Taxation (1988) 16 ALD 707 [at 61] because the reasons of the Tribunal did not lend themselves to an alternative construction which could have led to the dismissal of the application.
7. Her Honour failed to find that the decision maker erred in taking into account medical evidence that was irrelevant to the remunerative work that the veteran would have been capable of undertaking but for the PTSD alone.
94 In his Written Submissions and in oral argument made to the Full Court, the appellant recast these grounds into three questions, namely:
(a) Does s 24(2)(b) of the VE Act apply only to veterans who have no work history following military service? (Question 1)
(b) Does s 24(2)(b) of the VE Act require a veteran to satisfy the relevant decision-maker that he or she had been genuinely seeking remunerative work during the assessment period? (Question 2)
(c) Does s 24(1)(c) of the VE Act require identification of the remunerative work that the veteran was undertaking before he or she became incapacitated and does that subsection require consideration of whether the veteran’s incapacity was attributable to the veteran’s war-caused injury or war-caused disease alone, and, if not, does that subsection require a determination whether the veteran’s incapacity was the substantial cause of the veteran’s inability to obtain remunerative work in which to engage? (Question 3).
95 Both parties addressed their submissions to these three questions. For this reason, I intend to consider and determine the appeal by reference to these three questions.
The Administrative Decisions
The Appellant’s Application for a Pension Increase
96 The appellant applied for an increase in his disability pension by completing and submitting a Departmental form headed “Claim for Disability Pension and/or Application for Increase in Disability Pension”. The appellant dated that form 30 March 2009. It was received by the Department of Veterans’ Affairs on 31 March 2009. For the purposes of the VE Act, the appellant’s application is taken to have been received by the Department on 31 March 2009 (see s 5T of the VE Act).
97 In his application:
(a) In answer to the question in Part C: “What type of application are you making?”, the appellant ticked Box B: “Application for Increase in Disability Pension for previously accepted disabilities”.
(b) By not providing answers to questions 20 to 24 in his application, by answering question 25 in that application and by ticking Box B in Part C, the appellant signified that he was not claiming an increase in his pension because he was suffering new disabilities caused by his war service but rather was claiming an increase in his pension because his accepted disabilities had become worse.
(c) In answer to question 25: “Which of your accepted disabilities have become worse since they were last assessed by the Department and in what way?”, the appellant said:
I request a full review of my reasons for stopping work.
As the alone cause is the only reason that is restricting my increase in pension rate, I would like to have current information now at hand from Dr Martin Van Der Linden.
I believe this will allow a different view of my case and support the need to accept my PTSD as the alone cause.
98 The appellant attached to his application a report dated 3 September 2008 from Dr Van der Linden to the appellant’s treating general practitioner, Dr Bateman. At the time when that report was written, Dr Van der Linden was a Consultant Psychiatrist. That report was in the following terms:
RE: Kenneth Allan SMITH
D.O.B. 09/01/1949
Thank you for referring Ken, who has a long history of post traumatic stress disorder with depressed and anxious mood.
I had seen him six years ago at which time I felt his post traumatic stress disorder was sub syndromal but since then his symptoms had escalated and he was granted a disability pension and Gold Card by the Department of Veterans’ Affairs for his post traumatic stress disorder.
Over the past several years, his symptoms appeared to have worsened to the degree that he was unable to work in any capacity and experienced severe symptoms almost constantly. This was despite having remained on venlafaxine 225 mg for the past three years.
I believe that he is going to apply for a TPI pension in the near future and I will support him in this.
On review on the 3rd September 2008 I suggested he try risperidone 0.5 mg twice a day to see if this will help with his agitation. I also advised him to continue on his current dose of venlafaxine.
I have arranged to review him on a 4–6 weekly basis and will keep you informed of any change in management.
Should you require any further information please do not hesitate to contact me.
99 That report demonstrates that, as at 3 September 2008, Dr Van der Linden was of the opinion that:
(a) Over the past several years (referring to a period of 2–3 years ending on 3 September 2008), the appellant’s symptoms of PTSD had worsened to the point where he was experiencing symptoms almost constantly; and
(b) The worsening of those symptoms was the reason that he was unable to work in any capacity. That is to say, by 3 September 2008, at the latest, the appellant was unable to work at all because he was suffering from PTSD. The PTSD was the only reason the appellant was unable to work.
100 The report of Dr Van der Linden dated 3 September 2008 was provided to all decision-makers. An earlier report dated 1 December 2003 from Dr Van der Linden was also made available to all decision-makers. In addition, a later report dated 27 April 2009 from Dr Van der Linden was provided to all decision-makers. In his 2009 report, Dr Van der Linden concluded that the appellant was unable to work at all solely because of war-caused PTSD symptoms of irritability, poor concentration and memory, inability to tolerate others, chronic anxiety and ongoing depression. Each of Dr Van der Linden’s reports was tendered in evidence before the Tribunal.
The Delegate’s Decision
101 On 28 May 2009, a delegate of the respondent rejected the appellant’s application. In his Reasons for Decision, the delegate noted that, when the degree of incapacity of the veteran is 100% (as was the case with the appellant), the respondent was required to consider whether payment can be made at special or at intermediate rates or by application of the Extreme Disablement Adjustment. This observation correctly encapsulated the duty which the delegate was required to discharge. The references to “Special” and “Intermediate” rates made by the delegate in his Reasons were references to the rates allowed for by s 24 and s 23 of the VE Act respectively and the reference to the “Extreme Disablement Adjustment” was a reference to an adjustment provided for by s 22 of that Act.
102 After referring to the various decision options available to him, the delegate went on to say:
I have decided that Mr Smith is not eligible for pension at either the Special or Intermediate Rate.
My reasons are as follows:
From the evidence on file I find that the veteran ceased employment originally in 1982 when he suffered a severe injury which resulted in the amputation of his left leg. This accident was not service related.
After recuperating from this accident the veteran started work at the Avalon Branch of Britax Aviation, but he ceased this employment in 2003. Then the veteran worked on his farm but ceased this job in about November 2003.
According to the Financial reports submitted by the veteran the farm was only generating losses and therefore the veteran did not suffer any loss of income.
I therefore find that the veteran is not eligible for the Special Rate of Pension.
The Extreme Disablement Adjustment is equal to 150% of the General Rate. It is payable to veterans who are severely incapacitated by service related incapacity but who are not eligible for pension at either the Special or Intermediate Rate.
To receive the Extreme Disablement Adjustment a veteran must:
– be at least 65 years of age;
– have a degree of incapacity of 100%; and
– have a medical impairment rating for accepted disabilities of at least 70 points, and a lifestyle rating of at least 6.
I am satisfied that Mr Smith is not eligible for the Extreme Disablement Adjustment as he is under 65 years of age.
Mr Smith’s disability pension is therefore to be continued at 100% of the General Rate.
103 The reasoning of the delegate appears to have been as follows:
(a) The appellant’s last work was as a farmer.
(b) The appellant ceased work altogether in about November 2003.
(c) The farm on which the appellant worked was not making any profit when the appellant ceased work in November 2003.
(d) By reason of the above matters, the appellant did not suffer any loss of income when he ceased work.
The Decision of the VRB
104 The appellant sought review of the delegate’s decision by the VRB. On 13 July 2010, the VRB affirmed the delegate’s decision.
105 At [19] of its Reasons for Decision, the VRB said that it was satisfied that the impairment ratings determined by the Department in respect of the appellant were appropriate in all the circumstances. At [18], the VRB noted that the appellant had been assessed by the Department at 100% of the general rate since 8 March 2006 on the basis of an impairment rating of 60 and a lifestyle rating of 4. For these reasons, the VRB said that it was satisfied that the appellant’s degree of incapacity was at least 70% so that “… it was [then] necessary to consider whether an earnings-related rate of pension was payable”. The VRB then said that the criteria for payment of those rates were set out in s 23 and s 24 of the VE Act.
106 The VRB was satisfied that the appellant met the requirements of s 23(1)(aa), (aab) and (a)(i) of the VE Act and also met the requirements of s 24(1)(aa), (aab) and (a)(i) of that Act.
107 The VRB then went on to consider whether the appellant also satisfied the requirements of s 24(1)(b) of the VE Act. It did not specifically address the question of whether the appellant satisfied the requirements of s 23(1)(b) of the VE Act.
108 The VRB noted that both Dr Newlands and Dr Van der Linden had expressed the opinion that the appellant was unable to work at all solely because of his service-related PTSD. The VRB accepted these opinions. The VRB therefore concluded that the appellant was unable to work for more than 8 hours per week because of his service-related PTSD and that he therefore met the requirements of s 24(1)(b) of the VE Act. That conclusion was itself based upon the proposition that, since the appellant was unable to work at all because of his PTSD, it followed, as a matter of logic, that he was unable to work more than 8 hours per week for that reason.
109 The VRB made no express finding as to whether the appellant also satisfied the requirements of s 23(1)(b) of the VE Act.
110 At [35] of its Reasons, the VRB said that it was reasonably satisfied that the appellant ceased work at Britax Aviation on 30 June 2003 for reasons relating to the loss of his leg and because of ongoing conflict with his manager and that therefore it was reasonably satisfied that the appellant ceased work on 30 June 2003 for reasons other than his service-related disabilities. The VRB concluded that the appellant did not qualify for payment of his pension at the special rate. For the same reasons, the VRB found that the appellant did not satisfy s 23(3)(a)(i) of the VE Act and therefore did not qualify for payment of his pension at the intermediate rate.
111 At [26] and [27] of its Reasons, the VRB said that s 24(2)(b) of the VE Act was not relevant and had no application in circumstances where incapacity from war-caused disability alone prevents the veteran from engaging in remunerative work. The VRB took the view that the ameliorating effect of this deeming provision was not applicable at all where, on the facts as proven, it is the veteran’s war-caused incapacity which is the sole reason that the veteran is unable to undertake remunerative work at all. If, on the facts, that is so, then there is no need to resort to s 24(2)(b). For these reasons, the VRB considered s 24(2)(b) to be irrelevant to the appellant’s case.
The Decision of the Tribunal
112 The appellant sought review of the VRB’s decision in the Tribunal.
113 As I mentioned at [89] above, the Tribunal took the view that there were two issues (and only two issues) which it had to determine. At [4] of its Reasons for Decision (Smith v Repatriation Commission [2012] AATA 94), it expressed those issues in the following terms:
There is no dispute that Mr Smith satisfies s 24(1)(a) of the Act. The issues before the Tribunal are whether Mr Smith is incapable of undertaking remunerative work for more than 8 hours per week, and, if so, whether this is due to war-caused conditions alone (s 24 (1)(b)); and subsequently, whether his war-caused incapacity alone prevents him from continuing to undertake the remunerative work that he was undertaking (s 24(1)(c)).
114 The Tribunal accepted that the appellant satisfied s 24(1)(aa), (aab) and (a)(i) of the VE Act.
115 At [5]–[16] of its Reasons for Decision, the Tribunal reviewed the evidence given by the appellant, his wife and his son and the evidence of various medical practitioners.
116 At [8], the Tribunal described the appellant’s work after leaving Britax Aviation in the following terms:
Mr Smith explained that after leaving Britax he and his wife decided to commence a feedlot business on their property, with the assistance of their son, involving the fattening of cattle with a specially-designed feed mixture. The partnership agreement provided for their son to receive 50 per cent of the profits and the other 50 per cent to be shared between himself and his wife. He said that the intention was that he would purchase stock and arrange sales, but because he could not deal successfully with agents and customers this task was assumed by his son, who was away much of the time, and he was left to perform menial jobs such as cleaning and minor repairs. This meant that there was no-one to carry out the essential tasks of supervising the feedlot process, and the business could not afford to employ additional staff. Mr Smith stated that the business did not make a profit because he was not contributing in a meaningful way and because of the high start-up costs. Consequently the business was abandoned in 2006 and the equipment was sold, together with all of the remaining property except 7 acres (3 hectares) on which the house was situated. He said that he ceased working at that time, and tried unsuccessfully to obtain maintenance or unskilled jobs in 2006.
117 At [15], the Tribunal noted the evidence of the appellant’s son to the effect that he believed that the appellant’s inability to cope with the demands of the farming business was due to PTSD rather than the appellant’s leg-related disabilities.
118 At [16], the Tribunal concluded that the appellant satisfied the requirements of s 24(1)(b) of the VE Act. The Tribunal said:
The Tribunal accepts the evidence from Dr Horsley and Dr Thomas that the accepted physical conditions do not prevent Mr Smith from working more than eight hours per week. In respect of the evidence from the psychiatrists, the Tribunal prefers the opinions of Dr van der Linden and Dr Newlands that the correct diagnosis is PTSD rather than a combination of PTSD and depressive disorder as suggested by Dr White. The Tribunal is reasonably satisfied that Mr Smith is unable to work for more than eight hours per week and the inability is due to his war-caused condition of PTSD alone, and therefore he satisfies s 24(1)(b) of the Act.
119 The Tribunal commenced its consideration of the second question which it posed at [4] of its Reasons at [17] of those Reasons. At [17], the Tribunal referred to the Full Court decision in Flentjar v Repatriation Commission (1997) 48 ALD 1. In that paragraph, the Tribunal set out four questions which had become known as “the Flentjar questions”.
120 The Tribunal then referred to Repatriation Commission v Van Heteren [2003] FCA 888; (2003) 37 AAR 533 (a decision of Finn J) and Repatriation Commission v Graham [2004] FCA 1287; (2004) 39 AAR 426 (a decision of Selway J). Those authorities establish that:
(a) The “remunerative work” referred to in s 24(1)(c) is remunerative work undertaken by the veteran before he or she was prevented from continuing to undertake that work; and
(b) The expression “remunerative work” signifies the type of work which the veteran previously undertook but which, because of war-caused incapacity alone, he or she can no longer undertake. It means any substantive remunerative work that the veteran has ever undertaken.
121 The Tribunal then proceeded to answer the four Flentjar questions.
122 At [21], the Tribunal said:
Although Mr Smith worked in a farming capacity in the feedlot business in partnership with his wife and son from 2003 to 2006, and as a farmer from 1987 to 1998, his major employment from 1972 to 1982 (when he suffered his serious physical injuries) was as an electrician/electrical contractor or manager of electricians, and from 1998 to 2003 he worked mainly as an electrical fitter before commencing the feedlot business. Consequently the Tribunal finds that the answer to question (1) is: farmer; or electrician; or electrical fitter.
123 At [22], the Tribunal answered the second Flentjar question: “Yes”.
124 At [23]–[44], the Tribunal reviewed the evidence relevant to Flentjar question (3).
125 At [45], the Tribunal answered that question: “No”. It said:
Taking all relevant matters into account the Tribunal is reasonably satisfied that Mr Smith’s physical injuries played an important part in his inability to continue to work, so the Tribunal finds that Mr Smith’s PTSD is not the only factor preventing him from continuing to undertake his previous work, so the answer to question (3) is no.
126 The Tribunal did not go on to answer Flentjar question (4) because it considered that there was no need to do so in light of its negative answer to Flentjar question (3).
127 The Tribunal then considered s 24(2)(b) of the VE Act.
128 After reviewing the evidence concerning several job applications made by the appellant in 2006, the Tribunal concluded (at [54]) that there was no material before it which demonstrated that the appellant had made a real effort to obtain any work at any time during the assessment period (being the period from and including 31 March 2009 to and including 28 May 2009). That finding was based partly upon a negative assessment of the credit of both the appellant and his wife as witnesses before the Tribunal. It was also based upon an admission made by the appellant in his letter to the Department dated 26 May 2009 where he stated that he had given up looking for work by the end of 2006.
129 At [54], the Tribunal said:
… For these reasons the Tribunal finds that during the assessment period Mr Smith has not been genuinely seeking to engage in remunerative work, so he cannot satisfy s 24(2)(b) of the Act, and there is no necessity for the Tribunal to consider other matters such as whether Mr Smith’s PTSD was the substantial cause of his inability to obtain remunerative work or whether he suffered a loss of salary or wages, or of earnings on his own account. Consequently he cannot satisfy s 24(1)(c) of the Act and is not eligible for disability pension at the special rate.
130 The Tribunal then affirmed the decision of the VRB.
131 The Tribunal gave no consideration to the question of whether the appellant satisfied s 23 of the VE Act. It did not mention s 23 at all. Apparently, it took the view that s 23 was not relevant. However, it did not explain why it took that view.
132 In his application for an increase in his pension, the appellant did not confine himself to a claim for payment at the special rate (ie the s 24 rate). He wanted an increase in his pension. He wanted a full review of his reasons for stopping work. His application required all decision-makers to address both s 23 and s 24. Both the delegate and the VRB did so. The Tribunal did not.
133 Under s 23(1)(b) of the VE Act, the requirement which the veteran must satisfy is that his or her war-caused incapacity must be of such a nature as to render the veteran incapable of undertaking remunerative work otherwise than on a part-time basis or intermittently. The Tribunal accepted that the appellant could not work at all and that this incapacity was solely due to PTSD, one of the war-caused conditions with which he is afflicted. It may well have thought that this finding meant that s 23 was irrelevant because the appellant did not satisfy the requirements specified in s 23(1)(b). That is, if the appellant cannot work at all, it makes no sense to consider reasons why he is able to work only on a part-time basis or intermittently. But the Tribunal did not explain why it gave no consideration to s 23. It said nothing at all about s 23.
134 I will consider the consequences of the Tribunal’s failure to address s 23 of the VE Act later in these Reasons.
The Judgment of the Primary Judge
135 At [34] of her Reasons for Judgment, the primary judge held that s 24(2)(b) of the VE Act applied only to veterans who had no work history following military service. She said that the subsection “… is directed to veterans who have not been engaged in remunerative work”. At [39], her Honour noted the respondent’s submission to the effect that, if a veteran satisfied the section on its terms, s 24(2)(b) applied to a veteran whether or not the veteran had worked since returning from service. It was, therefore, common ground before the primary judge that s 24(2)(b) was not confined to veterans who had not worked at all since completing their military service.
136 At [41] and [42], her Honour held that, even if s 24(2)(b) was intended to extend to a veteran with a work history, there was nonetheless no identified error of law. This was so because, in her Honour’s view, the scheme of the VE Act requires a veteran to satisfy the decision-maker that he or she had, at some time during the assessment period, complied with the requirements of s 24(2)(b). The Tribunal found that the appellant had not satisfied that requirement. Her Honour held that that finding was a finding of fact and could not and, in any event, ought not, be disturbed by this Court when determining an appeal from the Tribunal under s 44(1) of the AAT Act.
137 At [44], her Honour set out questions of law 2, 3 and 4 raised by the appellant as follows:
Questions 2, 3 and 4 relate to s 24(1)(c) of the VE Act: see [13] above. The grounds were stated to be:
2. The Tribunal failed to undertake any analysis or identification of the remunerative work which the applicant was actually prevented from undertaking.
3. The Tribunal failed to consider the nature and quality of the remunerative work that the veteran claimed to be unable to undertake by reason alone of the PTSD which was the war caused disease or injury on which he relied.
4. As a result of the error identified in 2 above the Tribunal was led into the further error of taking into account medical evidence that was irrelevant to the remunerative work that the veteran would have been capable of undertaking but for the PTSD alone.
138 At [48]–[54], her Honour said:
48 Before turning to consider the AAT’s approach and consideration of the questions [referring to questions of law 2 and 3], some principles are worth restating:
1. In applying s 24(1)(c), the task is “to make a practical decision whether the veteran’s loss of remunerative work is attributable to his service-related incapacities, and not to something else as well”: Cavell v Repatriation Commission (1988) 9 AAR 534 at 539; Repatriation Commission v Hendy (2002) 76 ALD 47 at [37] and Forbes v Repatriation Commission (2000) 101 FCR 50 at [32].
2. In Flentjar v Repatriation Commission (1997) 48 ALD 1 at 4-5 Branson J propounded four questions designed to address the s 24(1)(c) issue:
1. What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the [VE] Act?
2. Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
3. If the answer to question 2 is yes, is the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?
4. If the answers to questions 2 and 3 are, in each case, yes, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?
3. Consideration of the “remunerative work” is not limited to the last job undertaken by the veteran; regard should be had to the types of work performed by the veteran: Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225 and Repatriation Commission v Hendy (2002) 76 ALD 47 at [36].
4. The phrase “remunerative work” is not focused upon the particular tasks and duties involved in specific jobs. In identifying the relevant “remunerative work”, the decision-maker must look “to the type of substantive work undertaken by the veteran at a higher level of generality”: Repatriation Commission v Butcher (2007) 94 ALD 364 at [7]; Banovich v Repatriation Commission (1986) 69 ALR 395 at 402 and Starvcevich at 225.
49 Mr Smith gave evidence to the AAT that his last remunerative work had been working in the family’s feedlot business and that he ceased that work in 2006. His complaint was that the AAT failed to undertake any analysis or identification of the remunerative work that he was prevented from undertaking. Mr Smith accepted that the AAT identified the occupations previously undertaken by him but submitted that the AAT failed to identify the nature of that work. In support of that contention, Mr Smith referred the Court to [45] of the AAT Decision:
Taking all relevant matters into account the Tribunal is reasonably satisfied that Mr Smith’s physical injuries played an important part in his inability to work, so the Tribunal finds that Mr Smith’s PTSD is not the only factor preventing him from continuing to undertake his previous work …
50 Mr Smith’s complaints were that:
1. it is not clear from the AAT Decision which physical injuries the AAT considered prevented him from working; and
2. the AAT failed to find what work had been lost to Mr Smith by reason of his physical injuries.
In my view, these complaints should be dismissed.
51 The AAT had before it evidence that the last job performed by Mr Smith was associated with the feedlot business he established with his wife and son in 2003. The AAT also had before it evidence of the other jobs performed and positions occupied by Mr Smith prior to 2003; including a position at the Ford Motor Company, working in a dairy, labouring for the State Rivers and Waters Commission, tree lopping with the Forests Commission, working at a timber mill, work as an electrical contractor (for number of different employers, including a period of self-employment), operating a wool and beef farming business, being an electrical fitter mechanic. These findings cannot be and are not disputed.
52 The AAT identified the types of remunerative work undertaken by Mr Smith as “farmer; or electrician; or electrical fitter”: see [21] above and [21] of the AAT Decision. The AAT addressed the correct question – what are the types of remunerative work undertaken by Mr Smith: see [48] above. The AAT correctly considered the “types of employment” undertaken rather than the particular duties in which Mr Smith had been engaged.
53 The correctness of that construction of s 24(1)(c) and, in particular, the phrase “remunerative work that the veteran was undertaking” may be tested by posing the question Mr Smith would have had the AAT ask – what were the particular duties in which Mr Smith had been engaged? If that question had been asked, the AAT would have repeated the error identified by the Full Court in Butcher at [7]. That is not the question posed by s 24(1)(c).
54 Mr Smith placed considerable reliance on the decision in Repatriation Commission v Connell (2011) 197 FCR 228. Connell concerned s 23(1)(c) of the VE Act. Section 23(1)(c) (and, by implication, s 24(1)(c)), required consideration of the “nature and quality” of the work. The Full Court did not say that an analysis of the tasks and duties performed as part of the “remunerative work” was required. Rather, the Full Court directed attention to the capacity in which the work was performed at [28]:
A person who works as a painter on a full-time basis but who, due to incapacity, can now only do that work on an intermittent or part-time basis is not continuing to perform the same remunerative work. The restricted nature of the work gives it an entirely different character. Being able to perform work without restriction because of illness or injury is a situation far removed from being able to perform the same work, but with restrictions due to illness or injury. Each is remunerative work of the same type, in this case, painting. But it is not the same remunerative work considering the nature and quality of the work.
Mr Smith’s evidence was that he had ceased to perform remunerative work in 2006. The issue considered by the Full Court in Connell does not arise in this matter.
139 At [57]–[70], the primary judge dealt with question of law 4. At [57]–[63], she addressed the hypothetical exercise required to be undertaken by s 24(1)(c) viz What would the veteran have done but for the war-caused incapacity? The appellant had argued that, in undertaking that hypothetical exercise, the Tribunal had taken into account irrelevant considerations. Her Honour rejected that argument.
140 The primary judge also rejected the appellant’s contention that the Tribunal had taken into account irrelevant considerations, namely, medical treatment undergone by the appellant and complaints of symptoms to doctors during a period when he was, in fact, engaged in remunerative work (at [64]–[70]).
Consideration
The Relevant Statutory Provisions
141 Section 15(1) of the VE Act provides that a veteran who is in receipt of a pension under Pt II of the VE Act in respect of the incapacity of the veteran may apply, in accordance with s 15(3), for an increase in the rate of the pension on the ground that the incapacity of the veteran has increased since the rate of pension was assessed or last assessed. There is no doubt that the appellant’s March 2009 application for an increase in his pension was made pursuant to s 15(1).
142 Subsections (3) and (4) of s 15 provide:
(3) An application under subsection (1) or (2):
(a) shall be in writing and in accordance with a form approved by the Commission;
(b) shall be accompanied by such evidence available to the applicant as the applicant considers may be relevant to the application; and
(c) is to be lodged at an office of the Department in Australia in accordance with section 5T and is taken to have been made on a day determined under that section.
(4) Subsection (3) shall not be taken to impose any onus of proof on an applicant or to prevent an applicant from submitting evidence in support of the application subsequently to the making, but before the determination, of the application.
143 Where a claim for an increased pension is made under s 15(1) of the VE Act, the Secretary of the Department of Veterans’ Affairs is obliged to cause an investigation to be made into the matters to which the claim or application relates (s 17(1)). When the investigation is complete, the Secretary must cause the application to be submitted to the respondent for its consideration and determination (s 17(2)). The application must be accompanied by the evidence and documents relied upon by the veteran in support of his or her application.
144 Section 18 provides:
18 Duties of Commission in relation to pensions
(1) It is the duty of the Commission in considering a claim or application submitted to it, to satisfy itself with respect to, or to determine, as the case requires, all matters relevant to the determination of the claim or application.
(2) Where the Board, the Administrative Appeals Tribunal or a court makes a decision remitting to the Commission a matter, being:
(a) the assessment of the rate, or increased rate, at which a pension is to be payable under this Part; or
(b) the fixing of the date as from which a decision of the Board, the Administrative Appeals Tribunal or the court is to operate;
it is the duty of the Commission to determine that matter having regard to the provisions of this Act and the reasons of the Board, the Administrative Appeals Tribunal or the court, as the case may be, for that decision.
145 Section 19 provides:
19 Determination of claims and applications
(1) Where a claim or application is submitted to the Commission in accordance with subsection 17(2), the Commission shall:
(a) consider all matters that, in the Commission’s opinion, are relevant to the claim or application; and
(b) subject to this section, determine the claim as provided by subsection (3); and
(c) subject to this section, determine an application under subsection 15(1) under subsection (5D); and
(d) subject to this section, determine an application under subsection 15(2) as provided by subsection (5).
(2) Without limiting the generality of paragraph (1)(a), the matters that the Commission may consider include:
(a) the evidence and documents that were submitted with the claim or application in accordance with subsection 17(3);
(b) any evidence subsequently submitted to the Commission in relation to the claim or application; and
(c) any evidence, documents or other material furnished to the Commission under section 32.
(3) The Commission shall determine a claim for a pension as follows:
(a) first, the Commission shall determine whether the claimant is entitled to be granted a pension in respect of:
(i) the incapacity of a veteran from war-caused injury or war-caused disease, or both; or
(ii) the death of a veteran that was war-caused;
(b) then, if the Commission determines that the claimant is so entitled, the Commission shall proceed as set out in subsections (5A), (5B), (5C) and (5D).
146 In the present case, the respondent was obliged to deal with the appellant’s application in accordance with subs (5A), (5B) and (5C) of s 19 (see s 19(3)(b) and s 19(4A)) and to determine that application under subs (5D) of s 19 (see s 19(1)(c) and s 19(3)(b)).
147 Subsections (5A), (5B), (5C) and (5D) of s 19 are in the following terms:
(5A) If:
(a) paragraph (3)(b) applies in respect of a claim; or
(b) subsection (4A) applies in respect of an application under subsection 15(1); or
(c) paragraph (5)(b) applies in respect of an application under subsection 15(2);
the Commission must assess the matters set out in subsection (5C).
(5B) The Commission must assess the matters set out in subsection (5C) in accordance with whichever of sections 22, 23, 24, 25, 27 and 30 are applicable in the particular case.
(5C) The matters that the Commission must assess are:
(a) the rate or rates at which the pension would have been payable from time to time during the assessment period; and
(b) subject to subsection (6), the rate at which the pension is payable.
(5D) After making an assessment under subsection (5C), the Commission must determine that pension is payable at the rate assessed.
148 In the case of an application made under s 15(1), a pension is payable from the date of effect of the determination made by the respondent under s 19(5D) (see s 19(5E)(iii)). Such a determination takes effect from the date upon which the determination is made or on such later or earlier date as is specified in the determination (see s 19(5F)(c)).
149 Section 19(6) provides that, where the respondent has, pursuant to s 19(5C), assessed that a pension at the intermediate or special rate is payable at some time during the assessment period, then the rate at which the pension is payable shall not be lower than the applicable rate provided by s 23 or s 24 (whichever is the applicable section).
150 Subsection (9) of s 19 is in the following terms:
(9) In this section:
application means an application made in accordance with section 15.
application day, in relation to a person who has made a claim or application or on whose behalf a claim or application has been made, means:
(a) the day on which the claim or application was received at an office of the Department in Australia; or
(b) if subsection 20(2), 20(2B) or 21(2) applies to the person—the day on which the claim or application referred to in paragraph 20(2)(a), 20(2B)(a) or 21(2)(a) was so received.
assessment period, in relation to a claim or application relating to a pension, means the period starting on the application day and ending when the claim or application is determined.
claim means a claim made in accordance with section 14.
relevant documentary medical evidence, in relation to a claim or application referred to in subsection (8), means certificates, reports or other documents from a medical practitioner, or from a hospital or similar institution in which the veteran or deceased veteran in respect of whom the claim is made had received medical treatment, in support of the claim or application, being certificates, reports or documents reasonably used:
(a) in support of the claim or application; or
(b) if a part only of the claim or application was granted—in support of that part of the claim or application.
151 Section 21(1) provides that the respondent may specify as the date that a determination of s 15(2) application takes effect, the date when that application was received by the Department.
152 Section 21A(1) and (2) provide that the respondent is to determine the veteran’s degree of incapacity from war-caused injury or war-caused disease, or both, and determine that degree of incapacity as 10% or a multiple of 10% up to 100%.
153 Section 22 deals with the general rate at which a pension is payable to a veteran and the extreme disablement adjustment. Section 23 provides for the intermediate rate of pension. Its structure is similar to that of s 24.
154 Section 24 provides for the special rate of pension. Section 24(1) and (2) are in the following terms:
24 Special rate of pension
(1) This section applies to a veteran if:
(aa) the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(aab) the veteran had not yet turned 65 when the claim or application was made; and
(a) either:
(i) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
(ii) the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and
(b) the veteran is totally and permanently incapacitated, that is to say, the veteran’s incapacity from war-caused injury or war-caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and
(c) the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and
(d) section 25 does not apply to the veteran.
(2) For the purpose of paragraph (1)(c):
(a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if:
(i) the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or
(ii) the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; and
(b) where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.
155 Subsections (2A) and (2B) of s 24 govern a claim and an application by a veteran who has turned 65 before the claim or application was made. Because the appellant had not turned 65 by the time that he made his application, subs (2A) and subs (2B) are not relevant in the present case. Nor is subs (3) which provides that s 24 applies to a veteran who has been blinded in both eyes as a result of war-caused injury or war-caused disease or both.
156 Subsections (4), (5) and (6) of s 24 deal with the rate at which pension is payable to a veteran under s 24.
157 Section 24A provides for the continuation of payment of pension at the intermediate or special rate (as the case may be) once the Commonwealth becomes liable to pay a veteran at one or other of those rates unless the decision to pay at the higher rate was induced by a false statement or misrepresentation or unless the veteran’s degree of incapacity changes to the extent relevantly specified in s 24A.
158 Section 25 provides for the payment of the special rate on a temporary basis.
159 Section 28 provides:
28 Capacity to undertake remunerative work
In determining, for the purposes of paragraph 23(1)(b) or 24(1)(b), whether a veteran who is incapacitated from war caused injury or war caused disease, or both, is incapable of undertaking remunerative work, and in determining for the purposes of section 24A whether a veteran who is so incapacitated is capable of undertaking remunerative work, the Commission shall have regard to the following matters only:
(a) the vocational, trade and professional skills, qualifications and experience of the veteran;
(b) the kinds of remunerative work which a person with the skills, qualifications and experience referred to in paragraph (a) might reasonably undertake; and
(c) the degree to which the physical or mental impairment of the veteran as a result of the injury or disease, or both, has reduced his or her capacity to undertake the kinds of remunerative work referred to in paragraph (b).
160 Section 29 authorises the preparation and use of an approved Assessment Guide. Decision-makers are required to act in accordance with any such guide once it is approved by the relevant Minister.
161 The respondent and the other decision-makers in the present case were required to determine the appellant’s application for an increase in his pension to their reasonable satisfaction (see s 120(5) of the VE Act). Neither the appellant nor the respondent bore any onus of proving any matter relevant to the determination of that application (see s 120(6) of the VE Act).
162 In order to qualify for a pension payable at the special rate (ie the s 24 rate), a veteran who has not turned 65 when his claim or application for such a pension is made, must satisfy each of the requirements set out in subs (1)(aa) to (d) of s 24 of the VE Act.
163 The requirement in subs (1)(b) is that the veteran must be “… totally and permanently incapacitated …”. That expression is defined in the subsection itself as meaning that the war-caused incapacity identified pursuant to subs (1)(a)(i) of s 24 is of such a nature, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week. In s 24(1)(b), “remunerative work” must mean paid work of any kind. The focus of this subsection is upon the impact of the war-caused condition upon the health and wellbeing of the veteran and thus upon his or her capacity to perform paid work.
164 Section 24(1)(c) addresses other matters.
165 First, for that subsection to be engaged, it must be established that the veteran is prevented from continuing to undertake particular remunerative work by reason of the incapacity contemplated by and described in s 24(1)(b) alone.
166 Second, the remunerative work referred to in the subsection must be remunerative work that the veteran was undertaking. I agree with the Tribunal’s opinion expressed at [19]–[20] of its Reasons that the remunerative work referred to in s 24(1)(c) is remunerative work undertaken by the veteran before he or she was prevented from continuing to undertake that work and is the type of work which the veteran previously undertook but which, because of war-caused incapacity alone, he or she can no longer undertake. It means any substantive work that the veteran has ever undertaken.
167 Third, it must be demonstrated that, by reason of the fact that the veteran is prevented from continuing to undertake relevant remunerative work because of his or her war-caused incapacity alone, he or she is suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity. This requirement would generally be readily demonstrated once the requirements set out earlier in s 24(1)(c) have been shown to be satisfied.
168 These notions or ideas embodied in s 24(1)(c) have been encapsulated in the Flentjar questions. Those questions are:
(1) What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c)?
(2) Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
(3) If the answer to question 2 is “yes”, is the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?
(4) If the answer to questions 2 and 3 are, in each case, “yes”, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?
169 The focus of s 24(1)(c) is on the financial impact of the war-caused incapacity.
170 Section 24(2) must always be addressed when the Court is called upon to determine whether, in a particular case, the requirements of s 24(1)(c) have been satisfied.
171 The subject matter of s 24(2)(a) is separate and distinct from the subject matter of s 24(2)(b).
172 Section 24(2)(a) provides that a veteran who has ceased to engage in remunerative work for reasons other than his or her war-caused incapacity or who is incapacitated, or prevented from engaging in remunerative work for some other reason, shall be deemed to be not suffering the relevant financial loss by reason of that incapacity. A veteran who is caught by s 24(2)(a) would probably not have satisfied the requirements of s 24(1)(c), properly understood, in any event. Section 24(2)(a) should be regarded as an attempt to make crystal clear that s 24(1)(c) requires that the veteran be prevented from engaging in relevant remunerative work by reason of his or her war-caused incapacity. The cessation of work and the financial loss caused by that circumstance must be the consequence of the war-caused incapacity not the result of an independent decision to stop work or the consequence of incapacity brought about by some incident or other matter which is not war-caused.
173 Section 24(2)(b) is an ameliorating provision designed to assist a veteran to comply with the particular requirement set out in s 24(1)(c) to the effect that he or she must establish that he or she has been prevented by reason of the relevant war-caused incapacity from continuing to undertake remunerative work that the veteran was undertaking, even though, absent subs (2)(b) of s 24, he or she would not be able to meet that requirement because he or she has not been engaged in any remunerative work since suffering the relevant incapacity or perhaps has not been prevented from undertaking remunerative work by that incapacity.
174 A veteran who meets the threshold requirement of not having been engaged in remunerative work and who satisfies the respondent that:
he or she has been genuinely seeking to engage in remunerative work; and
he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work; and
that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage
is entitled to the benefit of s 24(2)(b).
175 The present case raises for consideration the question of whether s 24(2)(b) has any application to a veteran who has, at some stage, engaged in remunerative work. That is, is the correct interpretation of the threshold requirement (viz “… [a veteran] who has not been engaged in remunerative work …”) that the subsection only applies to a veteran who has not worked at all since suffering the war-caused injury or war-caused disease, or both, which has rendered him or her totally incapacitated within the meaning of s 24(1)(b)? I will deal with this issue in the next section of these Reasons when addressing the first of the three questions formulated by the appellant as the questions which he contends are raised by his appeal.
176 I should add that, where the requirements of s 24(1)(c) are met by a veteran according to their terms, there will be no role for s 24(2)(b) to play and no need to resort to that subsection in order to ameliorate the strict application of s 24(1)(c) in an otherwise worthy case.
The Present Appeal
Questions 1 and 2
177 Question 1: Does s 24(2)(b) of the VE Act apply only to veterans who have no work history following military service?
178 Question 2: Does s 24(2)(b) of the VE Act require a veteran to satisfy the relevant decision-maker that he or she had been genuinely seeking remunerative work during the assessment period?
179 The primary judge held that s 24(2)(b) applies only to veterans who have not been engaged in any remunerative work since ceasing military service. In coming to that conclusion, her Honour followed observations made by Madgwick J in Hendy v Repatriation Commission (2002) 72 ALD 112 at 125 [55] to the effect that s 24(2)(b) of the VE Act was not intended to apply to a veteran with a work history and remarks to a similar effect made by Gray J in Giesen v Repatriation Commission (2005) 216 FCR 435 at 441–443 [19]–[27]. Her Honour also relied to some extent upon extrinsic materials in reaching this conclusion. In light of this conclusion, her Honour held that the Tribunal did not commit an error of law when it held that s 24(2)(b) did not apply to the appellant. She came to that view because the appellant had been engaged in remunerative work since completing military service and thus fell outside the scope of s 24(2)(b) as interpreted by her Honour.
180 Her Honour also held that, in any event, the Tribunal was correct in denying to the appellant the benefit of s 24(2)(b) because the evidence before the Tribunal did not establish that the appellant had been genuinely seeking work during the assessment period—a necessary requirement according to her Honour.
181 I respectfully disagree with the conclusion reached by the learned primary judge that s 24(2)(b) applies only to a veteran who has no work history since leaving military service.
182 The starting point for considering whether s 24 is engaged at all in any given case is a finding that the veteran is totally and permanently incapacitated (within the meaning of s 24(1)(b)) from a war-caused condition. Such incapacity may be complete at the point in time when the veteran ceased military service or it may only become complete at some later time. It is the veteran’s incapacity which triggers the potential engagement of s 24, not the cessation of his or her military service.
183 The clause “… who has not been engaged in remunerative work …” in s 24(2)(b) is tantamount to a statement as to a state of present affairs viz “… who is not engaged in remunerative work …”. The gateway erected by s 24(2)(b) is the circumstance that remunerative work is not being undertaken by the veteran at the time when the relevant assessment is being carried out. That circumstance may exist because the veteran has not engaged in any remunerative work since becoming totally and permanently disabled or because he or she has ceased being engaged in remunerative work previously undertaken after becoming incapacitated. In either case, the veteran may secure the benefit of s 24(2)(b) if he or she can satisfy the criteria laid down in the subsection (as to which, see [173] and [174] above).
184 A veteran who has not worked at all since becoming incapacitated or who has ceased engaging in remunerative work for reasons which include incapacity brought about by war-caused injury or disease, or both, will be (and should be) entitled to a pension at a higher rate if he or she has been genuinely seeking to engage in remunerative work and would, but for the war-caused incapacity, be continuing to seek to engage in remunerative work, provided that the war-caused incapacity is the substantial cause of the veteran’s inability to obtain remunerative work. The second class of veteran to which I have just referred would include veterans who suffer from slow-onset diseases such as PTSD.
185 As to question 2, in my respectful opinion, there is no requirement in the VE Act that, for the purposes of s 24(2)(b), the veteran must be genuinely seeking work during the assessment period. The correct position is that the criteria for securing an increase to a higher rate of pension laid down in s 23 and in s 24 must be satisfied at some time during the assessment period. This is the effect of the language of the statute (ss 19(5C), 19(6), 23 and 24) and of the Full Court decision in Leane v Repatriation Commission (2004) 81 ALD 625 at 626–628 [7]–[9] and 632–633 [27]–[33]. In considering whether those criteria have been met at any time in the assessment period, the Court is entitled to have regard to circumstances which obtained prior to the commencement of that period. There is no reason to exclude such circumstances. The language of the statute does not require that such circumstances be excluded. Therefore, the alternative reason expressed by the primary judge for not disturbing the Tribunal’s conclusion in respect of s 24(2)(b) falls to the ground.
186 For the above reasons, both questions 1 and 2 must be answered in the negative. The primary judge answered both questions: “Yes”. With great respect to her Honour, I think that she erred in doing so.
187 The Tribunal also erred in law when it held that it must be reasonably satisfied that the appellant made a real effort to obtain work at some time during the assessment period and that, in considering that matter, efforts made prior to the commencement of that period were irrelevant.
Question 3
188 Question 3: Does s 24(1)(c) of the VE Act require identification of the remunerative work that the veteran was undertaking before he or she became incapacitated and does that subsection require consideration of whether the veteran’s incapacity was attributable to the veteran’s war-caused injury or war-caused disease alone, and, if not, does that subsection require a determination whether the veteran’s incapacity was the substantial cause of the veteran’s inability to obtain remunerative work in which to engage?
189 For reasons which I have already explained, s 24(1)(c) of the VE Act does require the identification of the remunerative work that the veteran was undertaking before he or she became incapacitated in the sense which I have described that work at [120] above and the subsection also does require consideration of whether the veteran’s incapacity was attributable to the veteran’s war-caused injury or war-caused disease alone and, if not, whether s 24(2)(b) is engaged.
190 In the present case, at [45] of its Reasons for Decision, the Tribunal held that the appellant’s physical injuries played an important part in his inability to continue work and that therefore the appellant’s PTSD was not the only factor preventing him from continuing to undertake his previous work.
191 In my view, that finding was contrary to the unchallenged evidence of Dr Van der Linden and possibly also contrary to the unchallenged evidence of Dr Newlands. It was also contrary to the Tribunal’s acceptance of the evidence of Dr Van der Linden which underpinned the finding of the Tribunal made at [16] of its Reasons to the effect that the Tribunal was reasonably satisfied that the appellant was unable to work for more than 8 hours per week and that that inability was due to his war-caused condition of PTSD alone. Dr Van der Linden had said in his 2008 report and again in his 2009 report that, from about 2006, the appellant was unable to work at all and that that inability was due to his PTSD alone. It was because the appellant could not work at all that he was unable to work for more than 8 hours per week. The doctor’s opinion was that this inability to work was caused by his PTSD alone.
192 In any event, for reasons which I have already given, the Tribunal erred in its approach to s 24(2)(b) by excluding from consideration circumstances anterior to the commencement of the assessment period. The primary judge committed the same error.
Section 23
193 I have had the benefit of reading the Reasons for Judgment of Buchanan J in draft. In that draft, his Honour has dealt in detail with the circumstances that led the Full Court to consider the relevance of s 23 of the VE Act to the present appeal and to consider the significance of the failure of the Tribunal to address that section in its Reasons for Decision.
194 While I think that it is very likely that, when the matter is properly considered by the Tribunal, s 23 will be found to be irrelevant to the circumstances of the appellant, I nonetheless agree with Buchanan J that the Tribunal erred in law when it failed to address s 23. I therefore agree with Buchanan J that the Tribunal’s failure to address s 23 provides an additional ground for setting aside its decision. I do so essentially for the reasons explained by Buchanan J.
Relief
195 The appeal must be allowed with costs and the decision of the Tribunal must be set aside. The matter should be remitted to the Tribunal for further consideration by it according to law and in light of the Full Court’s judgment. That further consideration should relate to the whole of the appellant’s application for a pension increase. The appellant should also have his costs of the proceeding before the primary judge.
I certify that the preceding one hundred and seventeen (117) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. |
Associate:
Dated: 1 May 2014
