FEDERAL COURT OF AUSTRALIA

Repatriation Commission v Richmond [2014] FCAFC 124

THE COURT ORDERS THAT:

1.    The Appellant have leave to amend its Notice of Appeal in the terms filed in court on 7 August 2014.

2.    Order 2 of the orders made by Dodds-Streeton J on 25 March 2014 be set aside and in lieu thereof the matter is remitted to the Tribunal, differently constituted, for determination according to law including the law as explained in the reasons for judgment herein.

3.    The appeal is otherwise dismissed.

4.    The Appellant pay the Respondent’s costs of and incidental to the appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

introduction

1    This appeal is from the judgment of a single judge of this Court (Richmond v Repatriation Commission [2014] FCA 272). It involves a short but important point as to the construction of s 24(1)(c) of the Veterans’ Entitlements Act 1986 (Cth) (“the Act”), which provides that in order to qualify for the “special rate” of pension a veteran’s “war-caused” incapacity must have “alone prevented” the veteran from continuing to undertake the remunerative work that he or she had previously undertaken (“the alone prevented test”) and by reason thereof suffered a loss of earnings.

2    The respondent, Geoffrey Richmond, served in the Australian Army from February 1966 to February 1968, and gave operational service in Vietnam between April and December 1967. He suffers from multiple medical conditions which the Commission accepts are war-caused under the Act, namely hyperkeratoses, basal cell carcinoma, bilateral sensorineural hearing loss, bilateral tinnitus, non melanotic malignant neoplasm of the skin, alcohol dependence and, most relevantly, a generalised anxiety disorder. He has at all material times been in receipt of a pension at 70% of the “general rate”.

3    In March 2007 Mr Richmond applied under s 15 of the Act for an increase in his pension to the special rate payable under s 24 of the Act. The appellant, the Repatriation Commission (“the Commission”), determined on 14 February 2011 that he was not eligible for the special rate. He was then unsuccessful in an application to the Veterans Review Board in respect of that decision.

4    On 1 December 2011 he applied to the Administrative Appeals Tribunal (“the Tribunal”) to review the decision. On 20 June 2013 the Tribunal affirmed the decision (Richmond v Repatriation Commission [2013] AATA 421).

5    Mr Richmond then appealed the Tribunal decision to a single judge of this Court under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) raising several questions of law. On 25 March 2014 the primary judge allowed the appeal. Her Honour ordered that:

(a)    the decision of the Tribunal be set aside; and

(b)    the matter be remitted to a differently constituted Tribunal to be determined according to law.

The Commission now appeals to the Full Court.

6    In its Notice of Appeal the Commission alleged that the learned primary judge erred in the construction and application of s 24(1)(c) of the Act, but it made no challenge to the orders setting aside the Tribunal decision and remitting the matter for rehearing. The Commission took this approach because it accepted the primary judge’s findings that the Tribunal fell into error in respect of other issues, not challenged in the appeal, which justified the orders made.

7    While we substantially agree with the construction of s 24(1)(c) reached by the learned primary judge and we dismiss the appeal, in our respectful view her Honour placed a gloss on the provision which does not assist in its proper understanding. We respectfully disagree with her Honour’s approach in that small regard.

8    We have set aside paragraph 2 of the orders made by the primary judge and remitted the matter to the Tribunal, differently constituted, for determination according to law, including the law as explained in these reasons. The appeal is otherwise dismissed. On remittal, the Tribunal is to rehear the matter having regard to:

(a)    the learned primary judge’s reasons in respect of the issues decided by the primary judge in relation to which no appeal is made; and

(b)    the reasons herein in respect of the issue before us.

Jurisdiction

9    Paragraph 5 of the Notice of Appeal filed by the Commission sought the following orders:

The orders of the primary judge made on 25 March 2014 be set aside and in lieu thereof it be ordered:

(a)    that part of the decision which found that the Tribunal misapplied, and/or erred in its application of, s 24(1)(c) of the Act be set aside;

(b)    that part of the decision which found that the Tribunal failed to accord procedural fairness to the Respondent (Ground 3 in the judgment) be affirmed;

(c)    that part of the decision which found that the Tribunal failed to provide adequate reasons (Ground 4 in the judgment) be affirmed: and

(d)    the matter be remitted to the Tribunal.

10    On the face of the Notice of Appeal paragraphs 5(b), (c) and (d) of the orders sought may be argued to be inappropriate. If made, they would affirm rather than correct the orders of the primary judge when correction of orders is the point of appellate litigation. A right of appeal under 24 (1) of the Federal Court of Australia Act 1976 (Cth) ordinarily lies only in respect of the Court’s judgments or orders and not its reasons: see Harmer v Oracle Corporation Australia Pty Ltd and Others (2013) 299 ALR 236 at [21]-[22] per Allsop CJ, Kenny and Perram JJ.

11    However, the authorities show that even where no change to the overall result is ordered the Court has power to make orders and declarations so that, upon remittal, the Court may set out the law for the decision-maker below: see Commonwealth Superannuation Scheme Board of Trustees v Kitching (2004) 139 FCR 272 (“Kitching”) per Nicholson, Jacobson and Bennett JJ.

12    Kitching is on all fours with the present case. In this case the appellant made no challenge to the primary judge’s orders setting aside the Tribunal decision, and instead contended that the primary judge erroneously stated the law according to which the Tribunal was ordered to determine the matter on remittal. Their Honours explained at [3]:

As a Full Court said in Secretary, Department of Social Security v Lowe (1999) 92 FCR 26 at [16], an order read in light of the reasons justifying it may leave open to be implemented a conclusion which a Full Court holds to be erroneous. In such a case the Court has power on appeal to vary the order made below by the addition of an appropriate declaration; see Baxter Healthcare Pty Ltd v Comptroller-General of Customs (1997) 72 FCR 467 at 483.

13    To similar effect, in Australian Competition and Consumer Commission v Telstra Corporation Ltd & Anor (2009) 176 FCR 203 (“ACCC v Telstra”) at [66] per Ryan, Jacobson and Foster JJ, their Honours said:

As indicated by Burchett J in Baxter Healthcare 72 FCR 467, it should not be left open to the ACCC, when it is on the remitter, to adopt an interpretation of the subsection which we regard as erroneous. We propose therefore to follow the course taken by another Full Court in Kitching 139 FCR 272 at [3] and to vary the order made by the primary judge so as to reflect our view of the proper construction of [the relevant provision].

See also Secretary, Department of Social Security v Lowe (1999) 92 FCR 26 at [16] per Burchett, Kiefel and Hely JJ.

14    To put beyond doubt any issue as to the Court’s jurisdiction the Commission sought and was granted leave to amend paragraph 5 of the Notice of Appeal. The Commission now seeks the following orders:

(1)    The appeal be allowed.

(2)    Paragraph 2 of the orders of the primary judge made on 25 March 2014 is set aside and in lieu thereof it is ordered that:

The decision of the Tribunal dated 20 June 2013 is set aside and the matter is remitted to the Tribunal, differently constituted, for determination according to law including the law as explained in the reasons of the Full Court published on [insert date of judgement].

A similar form of order was used in ACCC v Telstra.

15    We are satisfied that the Court has jurisdiction to hear the appeal.

The notice of appeal

16    The Grounds of Appeal allege that the learned primary judge erred in law:

(a)    in concluding that the expression “alone, prevented from…work” in s 24(1)(c) of the Act excluded from consideration a factor acting as an incentive or influencing a decision voluntarily to cease work, and that the said test could only be satisfied by factors which “prohibit, disable or restrain” rather than induce or provide an incentive, and that the test requires an “involuntary barrier”; and

(b)    by misapplying Peacock v Repatriation Commission [2004] FCA 1449 (“Peacock”).

The legislative framework

17    In Repatriation Commission v Alexander (2003) 75 ALD 329 (“Alexander”) Spender J (at [9]-[10]) conveniently set out a summary of the legislative scheme for veterans’ pensions as follows:

[9]    The regime for the payment of pensions to veterans provided for by the Act is as follows:

•    the Commonwealth is liable to pay a pension where a veteran has become incapacitated from war-caused injury or war-caused disease (s 13);

•    a veteran may make a claim for a pension (s 14);

•    a veteran who is in receipt of a pension may make an application for an increase in the rate of pension (s 15);

•    the Repatriation Commission is required to consider and determine the claim or application of a veteran (s 18).

•    the Repatriation Commission is required to consider the rate or rates at which a pension would have been payable during the assessment period, and also the rate at which the pension is payable: s 19(5C). The assessment period commences on the day on which a claim or application is received, and ends on the day when the claim or application is determined: s 19(9).

[10]    A pension under the Act may be paid at the general rate (s 22), the intermediate rate (s 23), or the special rate (s 24).

18    His having applied for an increase in the rate of the pension, s 19(4A) directed that Mr Richmond’s application be dealt with in accordance with ss 19(5A)-(5D). The effect of these provisions is that the Commission was required to assess whether at any time during the assessment period Mr Richmond was entitled to an increase to the special rate of pension pursuant to s 24.

19    It is common ground that the assessment period commenced in March 2007 and that it continues to run because Mr Richmond’s application has not yet been finally determined.

20    Section 24 relevantly provides:

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;

…

(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.

…

21    Section 24(1)(c) has two main limbs, which may be informed by ss 24(2)(a) and (b). The first limb of the section is:

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 ...

The operation of this limb may be ameliorated to an extent by the operation of s 24(2)(b).

22    The second limb is:

the veteran ... 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;

The operation of this limb is amplified by s 24(2)(a).

23    Some of the difficulties in the proper interaction of ss 24(2)(a) and (b) with the first and second limbs of s 24(1)(c) were recently considered in Smith v Repatriation Commission [2014] FCAFC 53 (“Smith”), per Rares, Buchanan and Foster JJ. We respectfully agree with their Honours’ approach but those difficulties are not central in the present case.

24    We adopt Buchanan J’s explanation of s 24(1)(c) in Smith at [47]-[48] where his Honour said:

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.

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… (Emphasis added.)

The Tribunal DECISION

25    In recounting the Tribunal decision it is unnecessary to set out those parts which are not relevant to the appeal before us.

26    It was not contentious before the Tribunal that Mr Richmond:

(a)    applied for an increase in his pension before he turned 65 and therefore met the requirements of ss 24(1)(aa) and (aab);

(b)    suffered from a degree of incapacity of at least 70% and therefore met s 24(1)(a); and

(c)    was totally and permanently incapacitated, in that his war-caused incapacity was of such a nature as, of itself alone, to render him incapable of undertaking any remunerative work for periods aggregating more than eight hours per week, and therefore met s 24(1)(b).

27    The question for the Tribunal was whether, on the proper application of s 24(1)(c), Mr Richmond qualified for the special rate. The Tribunal (at [5]) broadly described the issues before it as:

…

When and why did Mr Richmond stop working?

Do Mr Richmond’s accepted war-caused conditions alone prevent him from working?

28    The Tribunal found the following facts in relation to Mr Richmond’s employment history (as summarised by the primary judge at [15]):

(1)    After leaving school, the applicant completed a five-year apprenticeship, qualifying as a boilermaker/structural steel tradesperson.

(2)    After two years of national service, the applicant worked in his trade for approximately 11 years, including nine years at Alcoa.

(3)    In the late 1970s, the applicant became a trade teacher, obtaining a Certificate of Technical Teaching followed by a Diploma in Technical Teaching four years later.

(4)    From approximately 1979 until 1989, the applicant taught at technical schools in the Geelong region.

(5)    From 1989 to 1994, the applicant was Curriculum Development Officer at the Gordon Institute.

(6)    From 1995 to 1996, the applicant was self-employed as an industry-training consultant.

(7)    From 1996 to 1997, the applicant moved to New South Wales where he ran his own business as a cruise boat operator. He returned to Victoria because he and his wife’s parents were unwell, his children were living in Victoria and he did not like the humidity during summer in New South Wales.

(8)    From April 1997 to 21 January 2005, the applicant worked as a teacher at Goulburn Ovens Institute of TAFE (“Goulburn Ovens TAFE”) teaching metal fabrication and welding to apprentices generally 16 to 20 years of age and, in the last year of his employment, undertaking online work.

(9)    On about 19 December 2004, the applicant tendered his resignation which was accepted on 24 December 2004. He informed the Tribunal that he changed the word “resignation” to “retirement” on advice from the human resources section of the Goulburn Ovens TAFE in order to secure pro-rata long service leave. He ceased work on 21 January 2005, his 60th birthday and obtained an age service pension with effect from 23 February 2005.

(10)    Between 26 June and 9 July 2005, the applicant worked for approximately three weeks as a casual teacher at the Gordon Institute.

(11)    In late 2005, the applicant visited the office of Melbourne River Cruises in relation to an advertisement for the position of coxswain, Marine Engineer driver, but apparently did not apply for, and was not offered, the position. The applicant informed the Tribunal that he continued to look in the newspapers for available positions but had not applied for any job.

(12)    The applicant had not worked since his casual work at the Gordon Institute in mid-2005.

29    The Tribunal approached the application of s 24(1)(c) by reference to the questions in Flentjar v Repatriation Commission (1997) 48 ALD 1 (“Flentjar”) at 4-5. In this case Branson J (with whom Beaumont and Merkel JJ agreed) distilled the following four questions from the provision:

1.    What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the 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?

The Flentjar questions have been followed in numerous single judge and appellate decisions.

30    In relation to the Flentjar questions the Tribunal found as follows:

(a)    on the first Flentjar question - that the remunerative work previously undertaken by Mr Richmond was as a trade teacher, boilermaker and boat operator; and

(b)    on the second Flentjar question - that by reason of Mr Richmond’s war-caused medical conditions he was prevented from continuing to undertake work as a trade teacher, boilermaker and boat operator for more than an aggregate of eight hours per week.

31    The Tribunal then moved to deal with the third Flentjar question and observed (at [51]) that there were “other factors to be taken into account in relation to Mr Richmond’s employability apart from his accepted war-caused conditions”.

32    It is the third Flentjar question which is central in the appeal.

33    The Tribunal noted (at [54]) the Commission’s contention that there were a number of other factors, not only Mr Richmond’s accepted war-caused conditions which contributed to his decision to cease the remunerative work he had been previously engaged in. These included that:

(a)    Mr Richmond had decided to resign from his position as a trade teacher at Goulburn Ovens TAFE on his sixtieth birthday;

(b)    he was dissatisfied with the conduct of students and management practices in the TAFE system;

(c)    he was tired of commuting weekly between his home in the Geelong area to his work at Goulburn Ovens TAFE in Shepparton;

(d)    he and his wife wished to be closer to their children and grandchildren; and

(e)    there were reported conversations between Mr Richmond and his doctors going as far back as 2000 which indicated that he was considering retirement due to various non-war caused conditions.

34    Then (at [56]) the Tribunal discussed the medical evidence regarding Mr Richmond’s incapacity for work. His two treating doctors, Dr Hales and Dr Hook, gave evidence that he was unfit for work mainly due to his anxiety condition. Dr Velakoulis, a consultant psychiatrist, testified that alcohol dependence and a post-traumatic stress disorder (“PTSD”) were the primary reasons why he could no longer work. In this regard it is necessary to understand that in earlier proceedings before the Tribunal Mr Richmond agreed that he did not suffer from PTSD. If indeed he suffered from PTSD it was not an accepted war-caused condition. The relevant accepted war-caused condition was a “generalised anxiety disorder”.

35    At [55] the Tribunal noted Mr Richmond’s submissions which emphasised the impact of his accepted war-caused conditions on his inability to work, particularly the worsening of his anxiety state during 2004.

36    The Tribunal made express and implicit factual findings (at [57] to [61]) that:

(a)    it was not satisfied that it was a coincidence that Mr Richmond chose to retire from Goulburn Ovens TAFE on his sixtieth birthday;

(b)    while Mr Richmond’s wish to no longer continue working at the Gordon Institute may have been partly due to his accepted generalised anxiety disorder, he became disillusioned and frustrated with the staff, students and learning environment at the Gordon Institute. The Tribunal found that he apparently discovered that things were not much different than at Goulburn Ovens TAFE;

(c)    when Mr Richmond declined to continue working at the Gordon Institute for the balance of 2005 he said that the position should be reserved for someone younger, which indicated that his age may have been another reason for his ceasing to work there;

(d)    it was not satisfied that Mr Richmond sought a casual teaching position at Gordon Institute after seeing a newspaper advertisement, and instead found that Mr Dixon sought him out for the position after becoming aware that he had returned to the Geelong area; and

(e)    when Mr Richmond visited the offices of Melbourne River Cruises in late 2005 he did not actually apply for the available job and he was not making a genuine attempt to seek work as required under s 24(2)(b) of the Act.

37    Earlier in the decision (at [51] to [57]) the Tribunal cited and relied on the decisions in Forbes v Repatriation Commission (2000) 101 FCR 50 (“Forbes”) at [39]-[40] per Nicholson J, Alexander at [22] per Spender J and Repatriation Commission v Hendy (2002) 76 ALD 47 (“Hendy”) at [36]-[37] per Whitlam, Emmett and Stone JJ. The Tribunal considered, correctly in our view, that these cases construed the first limb of s 24(1)(c) as providing that if there is a non war-caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing, the alone prevented test will not be satisfied.

38    The Tribunal set out its conclusion (at [62] to [66]) in the following terms:

[62]    In respect of question 3, Mr Richmond has emphasized the impact of his accepted war-caused conditions on his inability to work. He lodged the application which is the subject of this review in August 2007, more than two and a half years after he had resigned from Goulburn Ovens and more than two years after his short resumption of teaching at the Gordon Institute in mid-2005. He was 62 years old at the start of the assessment period and is now 68 years of age. It is now eight years since he stopped working and he has not undertaken remunerative work since lodging the claim that the Tribunal is reviewing.

[63]    The Tribunal is not satisfied that Mr Richmond’s accepted war-caused disabilities are the sole factors that have prevented him from working for more than eight hours per week during the assessment period. The Tribunal finds that Mr Richmond’s age and frustration at the teaching environment were two of the additional factors adding to his decision to stop working. His leave records show that he was a conscientious employee. He did not take time off because of his accepted war conditions except during 2002 when his chest pains were under investigation. The Tribunal finds that Mr Richmond ceased work as a trade teacher due to his accepted disabilities but also because of his age.

[64]    The answer to the third Flentjar question is no.

[65]    There is no evidence that Mr Richmond has sought any work since turning 65 years in January 2010 (during the assessment period). The Tribunal is not satisfied that he meets s 24(2)(b) of the Act.

[66]    Mr Richmond fails to meet the criteria in s 24(2)(a) of the Act and therefore fails to meet s 24(1)(c) of the Act…

The Tribunal concluded that Mr Richmond was not eligible for payment of a pension at the special rate.

The primary judgment

39    Mr Richmond’s Amended Notice of Appeal to the Court raises the following questions of law pursuant to s 44 of the AAT Act, namely:

(a)    Whether the Tribunal misapplied s 24(1)(c) of the Act and the Flentjar questions?

(b)    Whether the Tribunal failed to accord procedural fairness to Mr Richmond by failing to respond to a clearly articulated argument that his frustration with the teaching environment was an aspect or expression of his inability to cope with trade teaching because of his war-caused psychiatric injury; and

(c)    Whether the Tribunal complied with its duty under s 43(2) of the AAT Act by failing to provide adequate reasons.

The learned primary judge found for Mr Richmond on each of the questions of law. Only her Honour’s findings in respect of the construction and application of s 24(1)(c) are challenged in the appeal, and it is only necessary to recount the primary judgment insofar as it relates to that issue.

40    As the learned primary judge noted (at [63]-[66]) the Commission contended that the Tribunal correctly understood and applied s 24(1)(c). The Commission submitted that the alone prevented test in the first limb of s 24(1)(c) (being the third Flentjar question) could be defeated not merely by additional factors that disabled or precluded a veteran from continuing to work but also by reasons, inducements and incentives for Mr Richmond’s election or choice to cease work, even if they were not disabling. In that context, the Commission argued that Mr Richmond’s choice not to work, or to take a step ultimately incompatible with continuing to work, amounted to a factor preventing him from continuing to undertake the relevant work. The Commission’s contention in this regard is central in the appeal.

41    The primary judge noted Dowsett J’s recognition of the ambiguity in the first limb of s 24(1)(c) in Moorcroft v Repatriation Commission (1999) 58 ALD 143. His Honour observed (at 148) that the “alone” element of the first limb may mean that the decision-maker must either:

(a)    …look to the extent of the war-caused condition to ascertain whether it is actually preventing the veteran from working in his previous employment; or

(b)    …exclude a claim, where, notwithstanding such a [war-caused] condition, other factors (including medical conditions) prevent such employment.

42    Dowsett J preferred the first interpretation but the learned primary judge concluded (at [81]) that the weight of authority endorsed the second interpretation. We respectfully agree: see Cavell v Repatriation Commission (1988) 9 AAR 534 (“Cavell”) at 538-539 per Burchett J; Jackman v Repatriation Commission (unreported, Federal Court of Australia, Tamberlin J, 30 June 1997) (BC9702806) (“Jackman”) per Tamberlin J, Turnbull v Repatriation Commission [1997] FCA 421 (“Turnbull”) per Merkel J; Forbes at [32]-[33] per Nicholson J; Hendy at [37] per Whitlam, Emmett and Stone JJ; Alexander at [22] per Spender J; Repatriation Commission v Van Heteren (2003) 75 ALD 703 (“Van Heteren”) at [24] per Finn J; Willis v Repatriation Commission (2012) 202 FCR 323 at [22] per Bromberg J.

43    At [97]-[105] the primary judge discussed and approved Dowsett J’s judgment in Peacock. In Peacock the Tribunal concluded that the veteran’s war-caused injuries alone did not prevent him from continuing to undertake the work. Dowsett J observed that the Tribunal’s conclusion was based on its finding that a relevant factor was that the veteran had decided to retire from his position so as to access his superannuation benefit and relocate to Queensland.

44    Dowsett J held (at [33]) that the Tribunal erred in concluding that the veteran’s decision to retire so as to access his superannuation benefits was a factor operating to prevent him from continuing to engage in remunerative work, explaining that:

… Such access may be an incentive to retire, but it cannot prevent work.

45    His Honour reiterated (at [34]-[35]):

…[The Tribunal] concluded…that one of the reasons for the applicant’s retirement in 2000 was the availability of his superannuation benefits. The Tribunal inferred from this that by the date of claim, he had retired, with no intention of resuming work. It was said to follow that ‘it was not his war-caused injuries or diseases, alone, which prevented him from continuing to undertake his previous remunerative work…’

As I have said, the availability of superannuation benefits may have induced the applicant to retire in 2000, but such availability did not prevent him from performing work in 2004…

46    The learned primary judge found Dowsett J’s analysis in Peacock persuasive (at [105]). In her Honour’s opinion (at [114]) in the present case the Tribunal made no express or implicit findings that there was any other factor which prevented or contributed to preventing Mr Richmond from undertaking remunerative work. Her Honour said:

Rather, the Tribunal considered factors which caused or contributed to the applicant’s “decision to cease remunerative work” including some of the matters, such as the applicant’s attaining 60 years of age and his dissatisfaction with the conduct of students and management practices in the TAFE system…

47    At [116]-[120] her Honour set out in her approach to the construction and application of the first limb of s 24(1)(c), doing so in the following terms:

[116]    The Tribunal did not expressly or implicitly recognise any material distinction between, on the one hand, factors which cause, or contribute to causing, an inability or incapacity to continue to undertake work and, on the other hand, incentives or reasons for the applicant deciding not to continue it. The Tribunal appeared to treat the two concepts interchangeably, or at least, proceeded on the basis that a factor of the latter kind was fatal to the satisfaction of the “alone” test in the third Flentjar question.

[117]    In my opinion, the Tribunal erred in treating, in the context of the third Flentjar question, a factor acting as an incentive or influencing a decision voluntarily to cease to work as equivalent to a factor which prevents, or contributes to preventing, a veteran from continuing to undertake the relevant remunerative work. As Dowsett J recognised in Peacock, the third Flentjar question concerns the latter, not the former.

[118]    The language, structure and context of s 24(1)(c), in my view, indicates that contrary to the respondent’s submission, the “alone” test in the first limb is defeasible only by factors additional to the veteran’s war-caused condition which prevent or contribute to preventing, the veteran’s continued undertaking of the relevant work. To prevent an activity, according to its ordinary meaning, is to prohibit, disable or restrain, rather than to induce or provide a reason or incentive for action which a person remains capable of taking. The third Flentjar question, although similar to the question in s 24(1)(b) is not identical. It does not follow that because the requirements of s 24(1)(b) are satisfied, those of the third Flentjar question are also satisfied. The first limb of s 24(1)(c) refers to, an incapacity (from war-caused conditions) which “prevents”. That language indicates a factor which imposes an involuntary barrier to the relevant activity. Whether such an incapacity alone prevents an activity, in my view, necessarily requires consideration of whether there are any other factors which impose an involuntary barrier.

[119]    The first limb of s 24(1)(c) and the third Flentjar question thus require consideration of whether there are any other factors preventing, in the sense of hindering or disabling, the veteran’s continued undertaking of the relevant work, and not whether there are any other reasons generally for stopping work.

[120]    The relevance of inducements and incentives voluntarily to decide not to continue to undertake work is, in my view, as Dowsett J held in Peacock confined to the fourth Flentjar question. (Emphasis added.)

48    Her Honour noted that in Flentjar and Hendy the question as to whether an incentive or inducement voluntarily to cease work, despite being capable of continuing to work, did not arise and was therefore not specifically addressed. However, her Honour considered (at [122]-[124] and [135]) that the tenor and reasoning in Flentjar, Hendy, and Forbes was consistent with the view that inducements and incentives and other elective factors cannot operate to prevent a veteran from continuing to undertake the relevant remunerative work under the first limb of s 24(1)(c).

Consideration

49    The appeal revolves around the learned primary judge’s construction and application of the first limb of s 24(1)(c) (as expressed at [116]-[120], [124] and [135]).

50    We do not approach the task of interpreting s 24(1)(c) by reference to the Flentjar questions. While the appeal requires close attention to what was said in Flentjar and other authorities the application of s 24(1)(c) is not to be ascertained by construing the words in the authorities as if they were the words of the statute: Brennan v Comcare (1994) 50 FCR 555 at 572 per Gummow J.

51    We respectfully agree with Buchanan J in Smith (at [45]) where his Honour said:

…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 the provisions of the Act itself.

52    As we have said, s 24(1)(c) has two limbs. The first limb, which is capable of being informed by s 24(2)(b), requires a causal connection between the veteran’s war-caused incapacity, alone, and the veteran’s inability to undertake the remunerative work he or she previously engaged in.

53    The second limb, which is amplified by s 24(2)(a), requires a causal connection between that inability to work and the veteran’s suffering of financial loss. The enquiry under this limb relates to whether the veteran’s financial loss is a result of his or her war-caused incapacity.

54    As Buchanan J said in Smith (at [48]), the overall effect of s 24(1)(c) is that an applicant for the special rate of pension “requires a demonstrated loss of earnings as the direct result of the war-related incapacity, and only for that reason.”

55    The Commission contends that the relevant enquiry in Mr Richmond’s case must be made under the first limb of s 24(1)(c). The causal link required by the first limb has three elements, namely:

(a)    “by reason of” the veteran’s war-caused incapacity – (the first element);

(b)    the veteran is “alone”(i.e not for other reasons) – (the second element);

(c)    “prevented from” - (the third element);

continuing to undertake the remunerative work that the veteran was undertaking.

56    The issue as to whether Mr Richmond’s voluntary decision to cease working at Goulbourn Ovens TAFE and Gordon Institute falls to be considered under the first or second limbs of the section is not just a theoretical question. On remittal it will be necessary for the Tribunal to decide whether Mr Richmond’s frustration with the students, staff and working environment at Goulbourn Ovens TAFE and Gordon Institute, and his decision to cease working at those institutions, was in fact a consequence of his accepted war-caused generalised anxiety disorder. It is common ground between the parties that the enquiry under the second limb is less stringent than under the first limb, which underlines the importance of determining what are the relevant factors, and what are impermissible factors, under the first limb.

The “alone” element of the test

57    The first limb of s 24(1)(c) requires the decision-maker to decide whether the veteran’s war-caused injury or disease (or both) alone prevented him or her from continuing to undertake the remunerative work the veteran was engaged in. The alone element of the test is concerned with whether or not there is more than one cause of the preventative effect that the veteran claims has resulted from his or her war-caused incapacity.

58    The first limb provides that to qualify for the special rate, the preventative effect must arise from the veteran’s war-caused incapacity alone, and not from other non war-caused preventative factors as well. If other non war-caused factors contribute to the preventative effect, even if they are only of secondary importance and not of themselves sufficient to prevent the veteran from engaging in remunerative work, their presence will deny the veteran eligibility for the special rate.

59    In our view the authorities on the alone element of the test in the first limb are clear. In Cavell (at 539-540) Burchett J expressly approved the Tribunal’s statement that the use of “alone” in s 24(1)(c) means that any non war-caused factor which plays a part in the applicant’s inability to work or to obtain and hold remunerative employment is sufficient to displace the applicant’s case for a pension at the special rate.

60    His Honour, correctly in our view, rejected the use of other descriptions in substitution for “alone” such as “sole, unique and absolute cause” and explained (at 539) that the Tribunal’s task was:

…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. It is a decision that should not be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide.

61    In Forbes at [39]-[40] Nicholson J took a similar approach and said:

…The question whether the veteran by reason of the war-caused condition “alone” has been prevented from continuing to undertake remunerative work can only be answered by reference to all the circumstances in which the war-caused condition exists. The fact that a non war-caused condition is not alone causative of such preventative effect does not prevent it having that effect in combination with the war-caused condition.

…it is possible that the war-caused condition will be by far and away the more dominant of the causes of the preventative effect where there is also present a non war-caused condition having such effect in combination. The result is that the presence of the latter will deny to a veteran qualification for the special rate of pension. (Emphasis added.)

62    In Alexander at [22] Spender J observed that:

The test under s 24(1)(c) is not, “would Mr Alexander’s war-caused conditions alone prevent him from undertaking the relevant remunerative work?”, as the Tribunal indicated in (47) and (48) was the test it applied.  As (48) in particular indicates, the Tribunal concluded that if Mr Alexander did not suffer from war-caused difficulties, “he still would have been working”.  This is not the test for which s 24(1)(c) calls.  It is whether war-caused conditions, alone, prevent the respondent from continuing to undertake remunerative work that he had been undertaking.  It seems to me the Tribunal has not addressed the question of causation that s 24(1)(c) calls for, but has, in effect, applied the requirements of s 24(1)(b).  The conclusion that “a combination of war service and non-war service related conditions preventing Mr Alexander from working is a non-issue” is simply wrong.  If the non-service related conditions were a factor in preventing Mr Alexander from continuing to undertake remunerative work, albeit those conditions were “of secondary importance”, the “alone” requirement of s 24(1)(c) would not be satisfied. (Emphasis added.)

63    The Full Court in Hendy at [37] per Whitlam, Emmett and Stone JJ explained:

…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 [of] 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 the 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. (Emphasis added).

64    In Repatriation Commission v Butcher (2007) 94 ALD 364 (“Butcher”) at [12] Tamberlin, Nicholson and Tracey JJ cited this passage in Hendy with apparent approval, and it was expressly approved by Finn J in Van Heteren at [22]-[24]. See also Jackman per Tamberlin J; Turnbull per Merkel J.

65    We respectfully agree with the learned primary judge’s view (at [108]) where her Honour said:

The authorities in my view establish that if there is a non war-caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing, the “alone” test will not be satisfied.

While this may be seen as a harsh result, it arises from the plain words of the section. The special rate of pension is almost three times higher than the general rate, and the extrinsic materials indicate that the legislature intends the special rate to be reserved for a limited category of veterans.

66    In passing we note that the harshness of the “alone” requirement is ameliorated to some extent by s 24(2)(b). This section provides that where a veteran, who is under 65 years old and who has not been engaged in remunerative work, satisfies the Commission that:

(a)    he or she has been genuinely seeking to engage in such work; and

(b)    would but for a war-caused incapacity be continuing to seek to engage in remunerative work; and

(c)    the war-caused incapacity is the substantial cause of his or her inability to obtain such work;

the veteran is deemed to have been prevented from continuing to undertake remunerative work by reason of the war caused incapacity.

67    Because both parties accepted her Honour’s approach to the “alone” element of the test in the first limb the issue was not argued before us. With that caution in mind, we respectfully disagree with the approach recently taken by Bromberg J in Watkins v Repatriation Commission [2014] FCA 787 at [24], [28] and [46]. Following a careful analysis of s 24 of the Act his Honour took the view that non war-caused factors will only disqualify the veteran from the special rate if they, of themselves and independently of the war-caused conditions, also act to prevent the veteran from continuing to engage in remunerative work. His Honour said (at [46]) that the correct approach to the “alone” test is to ask whether, putting aside the veteran’s war caused ailments and their consequences, the veteran’s non-war caused disabilities themselves prevent the veteran from continuing to undertake the remunerative work that the veteran was undertaking.

68    His Honour found support for this construction in Repatriation Commission v Smith (1987) 15 FCR 327 (“Smith 1987”) at 337 where Beaumont J, with whom Northrop and Spender JJ agreed, said:

As has been said, the question posed by s 24(1)(c) is one of hypothetical fact. The Tribunal must attempt an assessment of what the respondent probably would have done if he had none of his service disabilities. The starting point is an examination of the prospects of employment, including self-employment, in southern Tasmania in early 1985 for a healthy sixty-nine-year-old plumber… (Emphasis added.)

69    However the Full Court in Flentjar (at 5) treated Beaumont J’s statement as relating to the second limb of s 24(1)(c) and not to the first limb. We are inclined to see it as expressing a practical rolled-up approach to the operation of both limbs. In any event, later Full Court decisions in Hendy and Butcher provide that if non war-caused factors play a part in or contribute to preventing a veteran from engaging in remunerative work, even if those preventative factors are of secondary importance and not of themselves sufficient to prevent remunerative work, the “alone” requirement will not be satisfied. It is the case that the drafting of s 24(1)(c) has created a “nearly impenetrable shroud” over its meaning (Smith at [26]) but we respectfully take a different view to Bromberg J.

The ‘prevented’ element

70    The learned primary judge held that the expression “alone, prevented from…work” in the first limb of s 24(1)(c) excluded from consideration a factor acting as an incentive or influencing a decision by a veteran voluntarily to cease the relevant remunerative work. In her Honour’s view the prevented element of the alone prevented test could only be satisfied by factors which “prohibit, disable or restrain” the veteran from continuing to engage in the remunerative work and not by factors which induce or provide the veteran an incentive to cease that work.

71    The Commission’s core contention is that on the clear and ordinary words of s 24(1)(c) “prevented” does not warrant a demarcation between voluntary and involuntary factors. It contends that the learned primary judge’s distinction between factors which induce or provide an incentive for a veteran to cease to undertake remunerative work, and those which stop a veteran from continuing to undertake that work, creates an unjustifiable and artificial distinction.

72    The Commission argues that read as a whole s 24(1)(c) is directed at the question of causation, specifically whether the veteran’s war-caused incapacity alone has caused the veteran to suffer a loss of salary, wages or earnings that he or she would not otherwise be suffering. It contends that in order for the question of causation to be properly addressed, it is necessary that all factors that may contribute to a veteran being prevented from continuing to work be considered. On the Commission’s argument the relevant factors include matters such as, in the present case, Mr Richmond’s decision to stop working upon attaining the age of 60 and because of his dissatisfaction with the conduct of students and management.

73    We do not accept the Commission’s contentions. Having regard to the text of s 24(1)(c) including the ordinary meaning of the words “prevented from”, as well as the overall structure of s 24, we respectfully agree with the learned primary judge’s construction of s 24(1)(c). However, we respectfully eschew her Honour’s gloss on the word “prevented” which included statements that satisfaction of the test requires an “involuntary barrier” or requires factors which “prohibit, disable or restrain”. In our view the ordinary meaning of “prevented” in s 24(1)(c) is unambiguous and there is no requirement to use other words or expressions.

74    In understanding the section the focus must remain on the meaning of “prevented”, or more particularly “prevented from”, rather than on other words or expressions.

The text of s 24(1)(c) and the overall structure of s 24

75    Looking first to the text of s 24(1)(c), it is common ground that the provision has two distinct limbs. The first limb uses “prevented” in the context of a veteran being prevented from engaging in remunerative work.

76    The Concise Oxford English Dictionary relevantly defines “prevent” to mean “hinder”, “stop” or “preclude”. The Macquarie Dictionary includes the following definitions:

1.    to keep from occurring; hinder.

2.    to hinder (a person, etc) as from doing something: there is nothing to prevent us from going.

…

6.    to interpose a hindrance: he will come if nothing prevents it.

77    The enquiry under the first limb is therefore whether the veteran’s war-caused incapacity alone, prevented, the veteran from continuing to undertake the remunerative work he or she previously engaged in. It is factors that prevent the veteran from engaging in remunerative work that are relevant to the enquiry under the first limb of s 24(1)(c).

78    On a plain English approach to the provision we do not consider that a veteran is “prevented from” engaging in remunerative work by the veteran’s voluntary or elective decision to cease work for a reason other than incapacity. The ordinary meaning of “prevented from” does not include such voluntary or elective choices, and acceptance of the Commission’s argument would mean that “prevented from” includes “chooses not to”. In our view this would give the expression an unjustifiable extended meaning.

79    Nor does the Commission’s construction of s 24(1)(c) sit comfortably with the structure of s 24 overall.

80    The second limb of s 24(1)(c) provides that in order to qualify for the special rate the veteran must by reason of war-caused incapacity be:

…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.

81    It is informed by ss 24(2)(a)(i) and (ii) which provide that a veteran shall not be taken to be suffering a financial loss by reason of a war-caused incapacity where:

(a)    the veteran has ceased to engage in remunerative work for reasons other than his or her war-caused incapacity (under s 24(2)(a)(i)); or

(b)    if the veteran is incapacitated or prevented from doing remunerative work for some other reason (under s 24(2)(a)(ii)).

82    As Foster J said in Smith (at [172]) when explaining the operation of s 24(2)(a):

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.

83    The plain words of s 24(2)(a)(i), informing the second limb of s 24(1)(c) as they do, make specific provision for the situation where a veteran, for reasons unrelated to war-caused incapacity, has voluntarily decided to leave his or her remunerative employment. This indicates that the legislature intended that matters other than strictly preventative factors would be picked up under that limb. The second limb (and s 24(2)(a)(i)) provide for a broad enquiry as to fact and degree that is well capable of catering for factors such as a veteran’s voluntary or elective decision to cease work.

84    On the Commission’s construction non-preventative factors or reasons which might disqualify a veteran from entitlement to the special rate under the second limb are to be decided under the first limb. This leaves the second limb, and particularly s 24(2)(a)(i), with little scope for operation. Words, sentences and clauses of a statute should not be construed in a way that renders them superfluous, void or insignificant if by another construction they may be made useful and pertinent: Commonwealth v Baume (1905) 2 CLR 405 at 414; Project Blue Sky Inc v Australian Broadcasting Authority (1994) 194 CLR 355 (“Project Blue Sky”) at [71] per McHugh, Gummow, Kirby and Hayne JJ.

85    In support of its contention that all non war-caused factors must be considered under the first limb the Commission points to Banovich v Repatriation Commission (1986) 69 ALR 395 (“Banovich”) per Fisher, Beaumont and Wilcox JJ. In this case the court was dealing with a provision equivalent to s 24(1)(c) in the Repatriation Legislation Amendment Act 1985 (Cth), and their Honours said (at 402):

In the usual case a loss of salary, wages or earnings will follow any prevention from continuing to undertake the remunerative work which the member was undertaking, but there may be exceptional situations under which a person unable to continue that work continues to receive a salary, wages or earnings; in which exceptional case sub-para (iii) would not be satisfied.

We do not see this passage as supporting an extended meaning for “prevented”. We doubt it stands for much more than the unremarkable proposition that it would be unusual for a veteran who had ceased to undertake remunerative work to continue to have an income source.

86    However we accept that the operation of the second limb of s 24(1)(c) and s 24(2)(a) means that a veteran who voluntarily chooses to cease remunerative work for reasons other than war-caused incapacity (for example, to access superannuation benefits or because of dissatisfaction with work unrelated to war-caused injuries) will usually not be eligible for the special rate, as he or she will usually be unable to establish financial loss by reason of his or her war-caused incapacity.

Legislative policy and purpose

87    Looking next to the legislative policy and purpose of s 24(1)(c), the meaning of “prevented” must be understood in the context of this provision as a whole, and the task of construing this provision must be underpinned by a proper understanding of the policy and purpose of s 24: Project Blue Sky at [69] per McHugh, Gummow, Kirby and Hayne JJ.

88    The Commission points to the Second Reading Speech of the Veterans’ Entitlement Bill 1985 (Commonwealth, Parliamentary Debates, Legislative Assembly, 16 October 1985, 2180) when s 24(1)(c) was introduced in its current form. At that time the Minister said that the special rate of pension was not payable:

…unless at the time of determination that veteran is receiving a 100 per cent general rate of pension, is totally and permanently incapacitated, and would be continuing in remunerative work but for a war-caused disability and thereby suffers an economic loss. I would not expect many veterans over the normal retirement age to qualify for payment of a pension at this rate as there would usually be reasons other than the effect of a war-caused capacity which precluded continuing in employment. If a person has had the usual span of working life or has retired voluntarily or has left employment for reasons other than accepted disabilities, a TPI pension is not payable. (Emphasis added.)

89    The Commission argues that this shows a legislative purpose that a veteran’s choice to voluntarily retire will mean that the veteran is not eligible for the special rate, and contends that it supports the Commission’s construction of “prevented”. We do not agree. First, we note that the speech refers to non war-caused factors which “precluded continuing in employment”. This is the language of a preventative effect rather than a voluntary choice. Second, it is unclear whether the Minister is referring to the operation of the first limb, the second limb, or both limbs of s 24(1)(c) together.

90    The Second Reading Speech is of little or no assistance in discerning whether the legislature intended “prevented” in the first limb of s 24(1)(c) to cover non war-caused factors which did not prevent the veteran engaging in remunerative work and instead involved the veteran making voluntary or elective choices to cease work.

91    We also note that, being only a general explanation, the Minister was incorrect in stating that a veteran will not qualify for the special rate of pension where the veteran has had the usual span of working life or has retired voluntarily. In Smith the Full Court rejected the contention that the special rate was restricted only to those veterans who were immediately incapacitated by their war-caused injuries and therefore did not enjoy a full working life: Smith at [15] per Rares J, [50] per Buchanan J, [181] per Foster J. For example, the special rate may be available to a veteran that enjoys a full working life but suffers a latent war-caused psychological injury which manifests later. Further, s 24(2)(b) allows a veteran to qualify for the special rate where the veteran ceases remunerative work for reasons unrelated to war-caused incapacity, and then later (perhaps when the veteran’s war-caused incapacity has worsened) demonstrates genuine efforts to obtain work which are made fruitless substantially by reason of that incapacity: Smith at [49] per Buchanan J.

Beneficial provisions

92    Finally, we note that the Act is beneficial legislation: Hill v Repatriation Commission (2004) 82 ALD 60 at [44] per Mansfield J and the authorities there cited; Smith at [17] per Rares J. Section 24(1)(c) is to be construed liberally, and as generously as the language of the section allows: Nilant v Macchia (2000) 104 FCR 238 at [42] per Weinberg J.

93    Despite the beneficial purpose of the Act the Commission’s construction strains the text of s 24(1)(c) and provides an interpretation which would result in veterans being disqualified from eligibility for the special rate of pension under the first limb because of any and all factors, not just those that prevent the veteran from engaging in remunerative work. We can see no proper basis for reducing veteran’s entitlements by extending the ordinary meaning of “prevented from” in the first limb so that it covers voluntary or elective decisions to cease remunerative work, when such decisions are expressly dealt with under the second limb and s 24(2)(a).

The authorities

94    The Commission and Mr Richmond each argue that the authorities support their construction of the alone prevented test in s 24(1)(c).

95    Mr Richmond points to cases which he contends indicate that “prevented” in the first limb means “debarred from”, “incapacitated for” or “unable to continue in” remunerative employment, and does not include voluntary or elective decisions to cease work. For example:

(a)    in Cavell (at 538-539) Burchett J said that the first limb deals with factors which mean that the veteran was “debarred” from work. His Honour approved the Tribunal’s statement to the effect that that the relevant factors under that limb were those that played a part in the applicant’s inability to engage in, obtain or hold remunerative employment;

(b)    Nicholson J in Forbes (at [39] and [40]) referred to a requirement that the non war-caused conditions must be causative of a “preventative effect”;

(c)    the Full Court in Hendy (at [37]) referred to “the relative impact of the various factors on the ability of the veteran to continue in remunerative work.” Later in the same passage the Full Court referred to any or all factors which may have contributed to the veteran’s incapacity; and

                      (d)    in Smith (at [166] and [172]) Foster J described the enquiry under the first limb as directed to whether the veteran is prevented from engaging in remunerative work by reason of the war-caused incapacity alone, and referred to remunerative work as being the work the veteran can no longer undertake.

96    In broad terms we accept that the courts’ use of expressions such as “debarred”, “incapacity”, “inability” and “preventative effect” indicates that “prevented” should not be read to include a veteran’s voluntary or elective decision to cease work. But we give little weight to these decisions because the meaning of “prevented” in s 24(1)(c) was not directly in issue, and also because other passages in some of the cases cited point the other way.

97    As we have said, Dowsett J in Peacock considered the meaning of “prevented” and concluded that factors such as the availability of the veteran’s superannuation benefits may have been an incentive for him to retire, but it could not have prevented him from engaging in remunerative work. We respectfully agree with his Honour’s approach and, like the primary judge, we consider the Tribunal’s treatment of the first limb evidences the same misunderstanding and largely replicates the same error as occurred in Peacock.

98    For its part the Commission points to cases which it argues demonstrate that various judges have applied s 24(1)(c) without distinguishing between voluntary and involuntary factors. These factors include:

(a)    imprisonment, in Banovich (at 402);

(b)    increasing age, in Cavell (at 540), Smith 1987 (at 336-337), Hendy at [37], and Baljas v Repatriation Commission [2009] FCA 171 (“Baljas”) at [15];

(c)    labour market forces and the unavailability of remunerative work, in Hendy (at [17] and [35]) and Smith 1987 (at 337);

(d)    time out of the workforce, in Hendy (at [37]), Cavell (at 540) and Berry v Repatriation Commission [1992] 27 ALD 330 at 332-333;

(e)    lack of recent work experience, in Hendy (at [37]); and

(f)    limited education, and difficulties with retraining, in Baljas (at [15]).

However, it is common ground that these factors are appropriate to be considered in an enquiry under the first limb as both parties accept that these factors may contribute to preventing a veteran from continuing in or obtaining remunerative employment. For example, in respect of time out of the workforce Mr Richmond accepts that this is a preventative factor because in the eyes of many employers a person who has been out of the workforce a long time may be regarded as unemployable.

99    The Commission also points to five cases in which a veteran’s voluntary retirement intentions have been considered under the first limb, namely Smith v Repatriation Commission [2004] FCA 743 (“Smith 2004”) per Dowsett J, Peacock per Dowsett J, Tomlin v Repatriation Commission [1997] FCA 705 (“Tomlin”) per Whitlam J, Jackman per Tamberlin J, and Jensen v Repatriation Commission [2010] FCA 422 (“Jensen”) per Gray J.

100    In our view these cases are of little assistance to the Commission’s case or to our task in properly construing s 24(1)(c) and the meaning of “prevented” in the first limb. We have given them little weight because:

(a)    except for Peacock, the meaning of “prevented” was not directly discussed and the courts did not directly grapple with that question;

(b)    Smith 2004 does not support the Commission’s contention. It is clear (at [22]) that Dowsett J considered the veteran’s retirement intentions under the second limb;

(c)    Peacock is directly contrary to the Commission’s contention. As we have said, Dowsett J concluded (at [33]) that a veteran’s voluntary decision to retire to access his superannuation benefits could not be treated as having prevented the veteran from engaging in remunerative work;

(d)    although Whitlam J in Tomlin used the language of the alone test, the issue in this case really turned on what choices the veteran would have made in any event, rather than the factors which prevented or contributed to preventing him from working. His Honour found no error in the Tribunal’s conclusion that the veteran probably would not have continued to work in any event because he was likely to have retired from his role as a porter before he was 68 years old and fulfilled his desire to move to a different location. Properly understood the case involved an application of the test under the second limb rather than under the first limb; and

(e)    similarly in Jackman, although Tamberlin J used the language of the first limb the issue largely turned on what choices the veteran would have made in any event rather than on the factors which prevented or contributed to preventing the veteran from working. His Honour found no error in the Tribunal’s conclusions that at age 71 and given his retirement intentions the veteran was unlikely to have been engaged in remunerative work in any event. Again, properly understood this case involved an application of the second limb or at least a rolled up application of both limbs.

101    The Commission draws some support for its contention from the decision of Gray J in Jensen (at [20]). His Honour used the language of the first limb and found no error in the Tribunal’s decision to take into account the veteran’s election to accept a redundancy package and his choices to adopt a comfortable non-working lifestyle thereafter. However, the Tribunal decision was plainly correct on the second limb alone and the Tribunal dealt with the application in a rolled up fashion under both limbs: Jensen v Repatriation Commission [2009] AATA 353 at [14] and following. In any event the proper construction of “prevented” in the first limb of the section was not in issue and we give the decision little weight in our decision. If it was necessary to decide we would respectfully disagree with his Honour.

Costs

102    Mr Richmond seeks his costs of the appeal and the Commission did not seek to argue otherwise. In our view he should have his costs.

Conclusion

103    For the reasons we have set out we make the attached orders, and otherwise dismiss the appeal.

Associate:

Dated:    26 September 2014