FEDERAL COURT OF AUSTRALIA

Beezley v Repatriation Commission [2015] FCAFC 165

THE COURT ORDERS THAT:

1.    Leave to raise the new question of law identified in the further amended notice of appeal filed in court on 17 August 2015 is refused.

2.    The appeal be dismissed.

3.    The appellant pay the respondent’s costs of and incidental to the appeal, including any costs related to the further amended notice of appeal filed in court on 17 August 2015.

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

REASONS FOR JUDGMENT

The Court

1    The appellant Mr Beezley appeals from the judgment of a single judge of this Court dated 17 February 2015 dismissing his appeal from a decision of the Administrative Appeals Tribunal. By that decision, the Tribunal affirmed the respondent’s decision to refuse Mr Beezley’s application for an increase in the rate of his pension from the general rate to the special rate under the Veterans’ Entitlements Act 1986 (Cth).

2    The appeal proceeded on a further amended notice of appeal, framed during the course of the appeal and on which we granted the appellant leave to rely.

3    For the reasons set out below, the appeal must be dismissed.

Factual background

4    In the opening part of its reasons, the Tribunal set out the factual background as follows:

1.    Mr Beezley, the applicant in this review, was engaged in operational service in Vietnam between November 1967 and July 1968. He has a number of disabilities accepted by the respondent as war-caused, the most significant being post traumatic stress disorder (PTSD).

2.    Prior to enlistment, the applicant commenced an electroplating apprenticeship with a firm to which he ultimately became the manufacturing supervisor. He returned to that employment, after he was discharged from service and remained in that position until 1977.

3.    He was then employed for about 2 ½ years as a sales executive with a chemical company until 1980 when he acquired an electroplating business – All-Brite Plating. Thereafter, he has been in self-employment.

4.    In 1991, the business was incorporated and thereafter traded as All-Brite Plating Pty Ltd (All-Brite). That entity conducted the electroplating operations and employed persons. He also incorporated another company, All Bright Plating (Australia) Pty Ltd which was engaged only in research and development. The applicant and his wife were the sole directors of both companies.

5.    A number of events occurred in May 2011 which were significant in the context of this review. Those events were:

(a)    on 11 May 2011, All-Brite entered into a creditors voluntary winding up;

(b)    on 23 May 2011, the applicant turned 65 years; and

(c)    on 31 May 2011, the applicant made a claim for an increase in pension.

6.    At the date of this review, the applicant was receiving pension at 90% of the general rate. His application was to seek pension at the special rate.

5    The primary judge noted at [7] of his reasons, and we agree, that there is tension between the Tribunal’s finding at [3] of its reasons that the appellant was “in self-employment” after he acquired the All-Brite business, and its finding at [4] and [5] that the business was, at least by May 2011, conducted by a corporation. Since the matter is not material to the determination of the grounds of appeal, we say no more about it.

6    What was critical to the Tribunal’s decision (and the appeal before the primary judge) was the nature of the appellant’s activities after he turned 65 on 23 May 2011, shortly after All-Brite was placed into liquidation. The appellant contended he performed “remunerative work” as defined in the Veterans’ Entitlements Act beyond his 65th birthday because he was paid a month’s salary in advance from the first week of May 2011, and because he worked with the liquidator of All-Brite assisting in the winding-up of the company. As we set out in more detail below, the Tribunal rejected these contentions.

Relevant legislation

7    Section 24 of the Veterans’ Entitlements Act sets out the circumstances in which a veteran may be entitled to receive a pension at the special rate. The appellant, who was in receipt of a pension under the Act, applied after he turned 65 to increase his pension to the special rate. The fact that he applied after he had turned 65 made his application subject to s 24(2A) of the Act, which provides:

This section applies to a veteran if:

(a)    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

(b)    the veteran had turned 65 before the claim or application was made; and

(c)    paragraphs (1)(a) and (1)(b) apply to the veteran; and

(d)    the veteran is, because of incapacity from war-caused injury or war-caused disease or both, alone, prevented from continuing to undertake the remunerative work (last paid work) that the veteran was last undertaking before he or she made the claim or application; and

(e)    because the veteran is so prevented from undertaking his or her last paid work, the veteran is suffering a loss of salary or wages, or of earnings on his or her own account, that he or she would not be suffering if he or she were free from that incapacity; and

(f)    the veteran was undertaking his or her last paid work after the veteran had turned 65; and

(g)    when the veteran stopped undertaking his or her last paid work, the veteran:

(i)    if he or she was then working as an employee of another person—had been working for that person, or for that person and any predecessor or predecessors of that person; or

(ii)    if he or she was then working on his or her own account in any profession, trade, employment, vocation or calling—had been so working in that profession, trade, employment, vocation or calling;

for a continuous period of at least 10 years that began before the veteran turned 65; and

(h)    section 25 does not apply to the veteran.

8    The phase “remunerative work” in para (d) of subs (2A) is defined, somewhat opaquely, in s 5Q of the Act:

remunerative work includes any remunerative activity.

9    The effect of s 24(2A)(f) is that the appellant was required to have been undertaking his “last paid work” after 23 May 2011.

10    Given the new ground raised for the first time on appeal, it is necessary to set out relevant parts of s 120 of the Act. Section 120(1) provides:

Where a claim under Part II for a pension in respect of the incapacity from injury or disease of a veteran, or of the death of a veteran, relates to the operational service rendered by the veteran, the Commission shall determine that the injury was a war-caused injury, that the disease was a war-caused disease or that the death of the veteran was war-caused, as the case may be, unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination.

11    Section 120(6) provides:

Nothing in the provisions of this section, or in any other provision of this Act, shall be taken to impose on:

(a)    a claimant or applicant for a pension or increased pension, or for an allowance or other benefit, under this Act; or

(b)      the Commonwealth, the Department or any other person in relation to such a claim or application;

any onus of proving any matter that is, or might be, relevant to the determination of the claim or application.

12    Specifically in relation to applications for an increase in the rate of pension, s 15 of the Act relevantly provides:

(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.

The Tribunal’s decision

13    Only the appellant gave evidence before the Tribunal. The evidence before the Tribunal was otherwise in documentary form. The appellant gave evidence that his business was at one stage successful, operating 24 hours a day out of six factories and employing 35 people. However the business lost customers, which the appellant attributed at least in part to his attitude to customers, which was, he said, a consequence of his PTSD. At the creditors’ meeting of All-Brite, the appellant is recorded as reading out a statement prepared by his accountant, which described the downturn of the business in the following way:

There were 3 factors that made the business unsustainable.

The closure of SPS Fasteners in Australia. Even though the work was resourced locally the products were imported.

The general downturn in manufacturing.

The increase of imported products mainly China.

14    The appellant’s evidence was that he was paid a salary by All-Brite monthly in advance, including a payment made in the first week of May for the period expiring the first week of June 2011. His salary payments were made by electronic transfer, but directed into his superannuation account by way of salary sacrifice. The Tribunal noted that the “history of deposits and withdrawals associated with All-Brite and the purpose of some of its bank accounts were largely unexplained during the hearing”. The Tribunal noted that the bank records showed two deposits into the appellant’s superannuation account of $40,000 and $14,200 in the period 1 to 10 May 2011, but that there were no corresponding withdrawals from All-Brite’s bank account. The appellant could not explain the payments and could not tell the Tribunal from which All-Brite account his salary was debited.

15    The Tribunal’s reasons then record the following evidence from the appellant (at [23]-[24]):

On that day, I assume before the liquidator arrived, the applicant went to his bank and withdrew approximately $1500 in cash to pay wages owing to John Kaleske and Mark Tramontana. The bank statement of the All-Brite account does not show any cash withdrawal on 11 May 2011. The applicant supervised the work that was undertaken by John Kaleske and Mark Tramontana and, having regard to his earlier evidence of the work that was on hand and undertaken after 12 May 2011, he said it was likely that those persons last worked on or about 19 May 2011.

The applicant said that he was receiving income prior to All-Brite being liquidated and he has subsequently lost significant income.

16    The Tribunal accepted that the appellant was paid one month’s salary in advance from the first week of May 2011. It found (at [27]) these monies were “intended to be his recompense or reward for work that was anticipated that he would undertake by working for the company”.

17    The Tribunal accepted the appellant undertook work beyond 11 May 2011 when All-Brite was placed into liquidation, in order to complete (with the two remaining employees of All-Brite) outstanding orders for All-Brite’s customers. It accepted he did so with the permission of an employee of the liquidator. However, the Tribunal found that work did not extend beyond 19 May 2011, when those outstanding orders were completed. Its findings were expressed in the following way (at [28]-[30]):

On the evidence in this review, especially the evidence of the applicant, I am satisfied the applicant did undertake work beyond 11 May 2011 (when the company was placed into liquidation) but no later than 19 May 2011 (the date he completed outstanding orders for the company). I make that finding because the applicant said that he worked for up to 7 days from 11 May 2011 with his 2 employees, when they ceased working and then worked for half a day, alone, securing chemicals. I therefore, do not accept the second last paragraph of the statement of Mr Kaleske (who was not called to give evidence) who recorded that he and Mark Tramontana continued working under John Beezley until the factory was closed on 25th May 2011.

The work undertaken after the date of liquidation was to complete orders and, on the applicant’s evidence, with the permission of Ms Palloure. Even if the work between 11 and 19 May 2011 was capable of entitling the applicant to remuneration, which I doubt, given that the company was in liquidation from 11 May, he did not work for the company after 19 May 2011.

It follows, that despite being paid monies in anticipation of the applicant undertaking work until the first week of June, the component of the monthly payment representing the period 19 May 2011 to the first week of June was not a payment as recompense or reward for work. Put another way, the applicant did not work after 19 May 2011 and he thereafter, had no entitlement to remuneration.

(Emphasis in original.)

18    The Tribunal expressly rejected the contention that the appellant worked beyond his 65th birthday on 23 May 2011 because of the work he performed with the liquidator assisting in the winding-up of All-Brite, including attending a creditors’ meeting on 26 May 2011. At [33]-[34], the Tribunal found:

The submission is contrary to the documented evidence of the liquidator, Mr Howlett, who recorded in a letter of 31 January 2014 (Exhibit R3) that the applicant was not employed by the company after the date he was appointed (on 11 May 2011), the applicant was not paid a salary after that date (although he had been paid previously for a period beyond 11 May and had no involvement with the company apart from his obligations under s 530A(3)) of the Corporations Act to assist him.

Even if the applicant assisting the liquidator was work, he had no entitlement, nor was he remunerated for undertaking his statutory obligations.

(Emphasis in original.)

19    Further, even if the appellant’s assistance to the liquidator and attendance at the creditors’ meeting constituted work, the Tribunal found (at [38]) “it was not work that he had been previously undertaking for at least 10 years” as required under para (g) of s 24(2A).

20    The Tribunal also rejected a contention that the appellant was eligible for a special pension on account of his remunerative work as a company director of All-Brite, on the basis that such work necessarily ceased when the company was placed into liquidation on 11 May 2011. In particular, the Tribunal found (at [40]) that the appellant:

was not paid any remuneration for any work nor would the Corporations Act permit the applicant being paid any remuneration for work, as a director, from 11 May 2011. Additionally, the applicant did not work as a director of the company, after that date, because its affairs were under the liquidator’s control. The applicant could not work as a director of a company in liquidation.

21    At [43] of its reasons, the Tribunal summarised its findings in respect of the requirements of s 24(2A), making it clear that for the purposes of its review function, it was not satisfied about a number of the requirements in s 24(2A):

I am satisfied that the respondent’s submissions of 24 June 2014, in relation to the relevant provisions of s 24(2A), which is constructed conjunctively, are to be preferred. The applicant does not satisfy:

(i)    paragraph (d) because his last paid work as a director ceased on 11 May 2011 and as an electroplater on 19 May 2011. Any work after that date was not paid work and was not work undertaken a director or electroplater [sic]. His report to the creditors meeting of the business being unsustainable (refer paragraph 16 earlier) were the reasons for the company being placed into liquidation. He was not prevented from continuing to undertake his last paid work before he made his application for an increase in pension because of incapacity from his war-caused injuries, alone. The word alone in the context of s 24 does not mean sole, unique and absolute cause. The Tribunal is entitled to make a practical decision of whether loss of remunerative income is attributable to war-caused illness but it must also keep an eye to reality (Cavell v Repatriation Commission (1989) 9 AAR 534 at 539). The statements of the applicant’s wife and Mr Kaleske, and the reports of the doctors (none of whom were called) point to the applicant being a person who was agitated and irritable and displaying signs of an illness diagnosed as PTSD. However, the explanations given by the applicant at the creditors’ meeting of the business being unsustainable are all associated with economic and market forces, unrelated totally with his illness. I therefore, cannot find on the probabilities that he satisfies the alone test;

(ii)    paragraph (e) because his loss of salary, wages or earnings on his own account subsequent to 19 May 2011 did not result from incapacity by war-caused injuries. That loss occurred because the company of which he was a director and which paid him income was placed into liquidation. By All-Brite being placed into the hands of the liquidator, the applicant did not suffer a loss of earning on his own account by incapacity by war-caused injury;

(iii)    paragraph (f) because the applicant was not undertaking his last paid work after he turned 65;

(iv)    paragraph (g) because when the applicant ceased working his last paid work – irrespective of whether it was 11 or 19 May 2011 – the affairs of the company were managed by the liquidator extending also to disclaiming property, managing and taking charge of all financial records and even changing the locks on the doors of the premises. For the reasons given above, the applicant ceased his last paid work on 11 or 19 May 2011 both dates being before his 65th birthday.

(Emphasis in original.)

22    Accordingly, it upheld the decision under review.

The primary judge’s decision

23    The appellant filed a notice of appeal from the Tribunal’s decision to the Federal Court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) on 15 August 2014. The appellant was represented in that appeal by the same solicitors representing him in this appeal, and who had represented him before the Tribunal. Although the appellant’s notice of appeal identified five questions of law each supported by a corresponding ground of appeal, his appeal was ultimately confined to essentially one primary ground, described as follows at [40] of the primary judge’s reasons:

By his primary ground, Mr Beezley contended that the Tribunal misconstrued the phrase “remunerative work” in s 24(2A) of the VE Act by holding that the work undertaken by Mr Beezley assisting the liquidator did not constitute “remunerative work”.

24    The appellant also relied upon a second consequential ground, the success of which depended on the primary ground being established. The primary judge described this ground at [41] of his reasons:

The consequence of that finding, so Mr Beezley argued, was that the work performed by him after his 65th birthday of assisting the liquidator was incorrectly excluded from consideration by the Tribunal. As a result, the Tribunal found that Mr Beezley was not undertaking his or her last paid work after the veteran had turned 65 and therefore failed to satisfy the criterion specified by s 24(2A)(f) of the VE Act.

(Emphasis in original.)

25    The appellant contended the Tribunal misconstrued the phrase “remunerative work” in two ways: first because the Tribunal took the view assistance given to a liquidator pursuant to an obligation under ss 530A(2)(c) or (3) of the Corporations Act 2001 (Cth) could not be “remunerative work”, and second because the Tribunal wrongly determined the appellant had no entitlement to be and was not remunerated for undertaking his statutory obligations under s 530A. Subsections (2) and (3) of s 530A provide:

(2)    Where a company is being wound up, or a provisional liquidator of a company is acting, an officer of the company must:

(a)     attend on the liquidator or provisional liquidator at such times; and

(b)    give the liquidator or provisional liquidator such information about the company’s business, property, affairs and financial circumstances; and

(c)    attend such meetings of the company’s creditors or members

as the liquidator or provisional liquidator reasonably requires.

(3)    An officer of a company that is being wound up must do whatever the liquidator reasonably requires the officer to do to help in the winding up.

26    As to the first way in which the Tribunal was said to have misconstrued “remunerative work”, the primary judge accepted the Commission’s submission that the Tribunal had not made a finding that assistance provided to a liquidator could not be an activity encompassed by the phrase “remunerative work”. Rather, the Tribunal had formed a view on the evidence, and as a factual finding, the appellant was not employed or otherwise engaged by All-Brite in assisting the liquidator. The primary judge held at [49]-[50]:

… the Tribunal’s conclusion that assisting the liquidator was not “work” was a factual conclusion based on the Tribunal’s acceptance of evidence before it that at the time that Mr Beezley was assisting the liquidator he was not employed by All-Brite at all.

I am not satisfied that the Tribunal either posed or answered the question of law that Mr Beezley contended was erroneously determined. It follows that Mr Beezley’s contention that the Tribunal erred in law in this respect, is without merit.

27    As to the second way in which the Tribunal was said to have misconstrued “remunerative work”, the primary judge held at [52] no question of law was raised by the argument as put:

Whether or not Mr Beezley was entitled to be or was in fact remunerated for assisting the liquidator is a question of fact. The finding that he was not entitled to be remunerated nor actually paid, is a factual finding.

28    Although the primary judge expressed doubts about the Tribunal’s reasoning that the Corporations Act would not have permitted the appellant to work as a director or be paid as a director of All-Brite after 11 May 2011 when it was placed into liquidation, the primary judge also found there was other evidence before the Tribunal upon which its finding that the appellant was not entitled to payment nor in fact paid for assisting the liquidator could be made: in particular, a letter from the liquidator indicating that after 11 May 2011 the appellant was not employed by All-Brite, was not paid a salary, and had no involvement with All-Brite beyond his obligation to assist the liquidator in accordance with the Corporations Act. The primary judge considered that letter probative evidence before the Tribunal which supported its factual finding that after 19 May 2011 the appellant did not work for All-Brite, had no entitlement to be paid and was not paid for any work performed thereafter.

29    His Honour dismissed the s 44 appeal, and the appellant appealed to this Court.

The appeal from the primary judge’s orders and decision

Leave sought to further amend notice of appeal

30    This appeal was case managed and by orders dated 10 April 2015, the appellant was granted leave to file an amended notice of appeal. Pursuant to those orders, he did so on 27 April 2015.

31    That amended notice of appeal bore little resemblance to the arguments put to the primary judge. Of the seven contentions which appear in the amended notice of appeal, five (amended grounds 1(a) and (b), 2, 3 and 4(b)) were each described as a “fresh ground of appeal from the decision of the Tribunal”; one related to a matter his Honour had not decided (amended ground 4(a)) and one related to a matter his Honour had found not to be material (amended ground 5). In other words, the s 44 appeal as it stood after 27 April 2015 was entirely different to the s 44 appeal heard and determined by the primary judge.

32    As events transpired, and notwithstanding that dispensation, at the hearing of this appeal the appellant sought leave to raise yet a further new question of law and ground of appeal not contained in the amended notice of appeal. He also sought to abandon several of the grounds in the amended notice of appeal he had filed. The respondent opposed any grant of leave on the basis that the proposed new question and ground lacked merit, but was prepared to deal with the question raised.

33    Counsel for the appellant informed the Court that only two questions of law were pressed.

34    The following exchange then occurred between the Court and counsel for the appellant:

NORTH J: Mr Green, the position that we’re in is, obviously, unsatisfactory. One way of dealing with it is to, if you like, reboot and ask you to go away, formulate the grounds of appeal precisely, file written submissions in support of them, have the Commission respond to the extent that it is necessary and come back because at the moment it’s – you know, you’re really asking us to consider an appeal as if no preparation had been done at all, and - - -

MR GREEN: I wouldn’t want your Honours to do that. May I say this, your Honour: I’m not disagreeing with what your Honour just put to me. One alternative course is to do what your Honour has just proposed and for the court today to entertain argument about the onus of proof point because, with respect, that question has been defined.

…

NORTH J: Mr Green, the course which we favour is that we adjourn the appeal until 2.15. That, at 2.15, we return; you return with a formulated proposed amended notice of appeal in proper form which raises the two questions which you seek to raise; and then, we will consider at that time whether to proceed with the appeal or not, depending on what issues are raised by the questions.

MR GREEN: Yes, your Honour.

NORTH J: Is that a course that is satisfactory to you?

MR GREEN: It is, your Honour.

MS DOWSETT: Yes, that’s satisfactory to the respondent, your Honour.

35    The Court adjourned until 2.15pm so that the appellant might prepare a proposed further amended notice of appeal in the proper form.

36    When Court resumed at 2.15pm, the appellant handed up and sought leave to rely on a proposed further amended notice of appeal containing the following four grounds of appeal:

1.    His Honour was in error in failing to hold that the Tribunal misconstrued ‘remunerative work’ within the meaning of the Veterans’ Entitlements Act 1986 (the Act) in that, on the whole of the material before the Tribunal, the appellant was engaged in or was undertaking work, for which work he was remunerated, as at and beyond 23 May 2011 when he turned 65 years.

2.    His Honour was in error in characterising the Tribunal’s conclusion [reasons for judgment [48]] that the appellant’s assisting the liquidator was not ‘work’ was a mere factual conclusion because the appellant had been remunerated in advance in the first week of May 2011 through to 6 June 2011 and therefore the work the appellant performed in assisting the liquidator was capable of answering the description of ‘remunerative work’, which was a question of law.

3.    His Honour was in error in failing to pay regard to the consideration that there was no material before the Tribunal that the liquidator clawed back or made any attempt to claw back any part of the appellant’s advance remuneraration [sic] made in the first week of May 2011.

4.    His Honour was in error in failing to recognise that the Tribunal’s finding of fact at [29] of its reasons for decision that the appellant did not work for the company after 19 May 2011 was one which no reasonable tribunal could have arrived at having regard to the unchallenged written evidence of Mr John Aleske [sic] that ‘After the receivers moved in myself and Mark Tramontana continued working under [the appellant] until the factory was closed on 25th May 2011. During this time we were finishing off work that had been received and work that was partly processed. Loading trucks as customers came to pick their goods up.’ which evidence was corroborated by the appellant.

37    We note that none of these grounds correlates to the ones set out in the amended notice of appeal filed on 27 April 2015. Although each refers to an error said to have been made by the primary judge, and some contain traces of contentions that can be found in the 27 April amended notice of appeal, they represent yet another change in the way the appellant sought to put his case about the errors of law said to be apparent in the Tribunal’s decision. Counsel accepted in argument that these grounds had all been “reframed”, but submitted that they all flowed from the questions of law before the primary judge.

38    In this document, the appellant also sought leave to raise a further and admittedly new question of law and ground of appeal, raised neither before the primary judge nor in the 27 April amended notice of appeal. The question of law and ground supporting it were framed in the following way:

QUESTION OF LAW:

Whether section 24(2A) of the Act or any other and, if so, what provision of the Act imposes any and, if so, what onus of proof upon a veteran who applies under s 15 of the Act for an increase in the pension that he or she is receiving.

GROUND OF APPEAL:

The Tribunal was in error in holding that the appellant ‘must satisfy s 24(2A) of … the Act’ ([7] and [25] of the reasons for the decision, and see [43] thereof) in order to gain an increase at the special rate of the pension that he had been receiving in circumstances where neither s 24(2A) nor any other provision of the Act imposes any onus of proof on him.

39    As to grounds 1 to 4, leave was granted to amend the amended notice of appeal in the form in which it was handed up. As to the new question of law, the Court proceeded on the basis that it would deal with both whether leave should be granted on the new question, and if granted, the merits of the question. The remainder of the appeal proceeded on that basis, essentially confined to the parties’ submissions on the new question.

Ruling on grounds 1 to 4

40    Having granted leave on grounds 1 to 4 of the further amended notice of appeal, the Court then invited counsel for the appellant to address the Court on whether, even if the appellant was successful on any or all of those four grounds, there remained an insuperable obstacle to the appellant satisfying the terms of s 24(2A) so that any relief on the appeal would lack utility. The exchange between the Court and counsel proceeded in the following way:

NORTH J: Well, the next question is this, Mr Green: let us assume that you were successful on all of those grounds.

MR GREEN: Yes.

NORTH J: I take it that you accept that section 24(2A), subsection (e) has a requirement – well, it’s really (d), I think, which provides the causative element, so that what prevents the person, the veteran, from undertaking remunerative work is an incapacity from a war-caused injury.

MR GREEN: Yes.

NORTH J: And what the tribunal found was – I’m looking at paragraph 43(ii).

MR GREEN: Thank you, your Honour.

NORTH J: The second sentence:

That loss occurred because the company of which he was a director ... was placed into liquidation ... the applicant did not suffer a loss of earning on his own account by incapacity by war-caused injury.

Now, isn’t that an obstacle to you – that finding, if unchallenged, an obstacle, even if you were successful on your four grounds?

MR GREEN: Sorry, your Honour. Was your Honour drawing my attention to paragraph 43 of the reasons for decision?

NORTH J: Yes.

MR GREEN: Yes. Which paragraph? I’m sorry.

NORTH J: 43(ii).

MR GREEN: (ii). Thank you.

MORTIMER J: And for my part, Mr Green, you might add (i).

NORTH J: (i), yes.

MORTIMER J: Particularly the last half of that paragraph, where the tribunal makes findings about the alone test.

NORTH J: And, in fact, (i) refers to paragraph (d) of the section, which is the right one. I’m not sure that in (ii) the causation issue is addressed, but certainly the whole of (i), and probably (ii) as well, the gist of it being that the cause of the loss of income has to be related back to the PTSD, and there’s a finding here that that wasn’t the cause, or it certainly wasn’t alone the cause. Now, either of those, or both of those findings would stand in the way of success, even if you were able to persuade us that you succeeded on 1 to 4.

MR GREEN: Well, no, I don’t accept it would stand in the way in the a priori way your Honour puts to me. If, for example, the appeal were allowed, and the matter were remitted, Mr Kaleske, who, although he made a written statement, didn’t give any oral evidence, could be called, and he - - -

NORTH J: But why would we remit if it you were going to fail on the causation issue, because it’s not challenged.

MR GREEN: Well, your Honour shouldn’t assume though that there would be failure because of that, for this reason, your Honour: Mr Kaleske’s written evidence, which was tendered, but Mr Kaleske wasn’t called, speaks to matters that inform the causal question.

NORTH J: But you don’t challenge the causal question.

MR GREEN: Well, what we challenge is the failure to take into account the evidence that Mr Kaleske gave.

NORTH J: Where’s that?

MR GREEN: I think it’s the last ground, your Honour. I’ve extracted a passage from his statement, but there’s more to his evidence than that.

MORTIMER J: That’s on your remunerative work - - -

MR GREEN: That’s on remunerative work. But Mr Kaleske’s evidence went to both issues, your Honour Justice Mortimer, with respect – namely, whether the war-caused condition – he gave some evidence that was relevant to that issue.

NORTH J: Well, it might be, but there’s not a reference to it in the questions of law that are raised, or the notice of appeal.

…

NORTH J: … What frankly seems to me should happen is that you proceed today on the onus of proof ground, and you either abandon the others or we make a decision that they are dismissed on the basis that they couldn’t result in a success on the appeal in view of a failure to challenge the other elements that were necessary.

MR GREEN: Yes. I understand. I see the force of that, with respect.

…

NORTH J: Well, you don’t have anything more you wish to put in relation to the proposition that I’ve put to you that the success of those four grounds is necessarily foreclosed by reason of other findings that you haven’t challenged.

MR GREEN: That is so.

NORTH J: Yes. Very good.

MR GREEN: Just before your Honour rules on that can I add this: whatever has been urged today apropos of those four grounds in the fresh notice, that is as high as I can put it and no higher.

NORTH J: Yes. Thank you, Mr Green. The appropriate course is, then, I think, to allow you to amend the notice of appeal in the form that you’ve handed up, to dismiss grounds 1 to 4 and to hear you on both questions whether you should be permitted to argue the new question and then putting the arguments on the basis that you get that leave; a matter that we will refer to, ultimately, in the reasons.

41    Our reasons for refusing leave and dismissing those four grounds can be shortly stated.

42    Grounds 1 to 4 of the further amended notice of appeal, although expressed by reference to the phrase “remunerative work” and by reference to s 24(2A)(d) are really directed at the terms of s 24(2A)(f). As the Tribunal’s reasons also suggest, s 24(2A) appears to use the phrase “remunerative work” somewhat interchangeably with the phrase “last paid work”. Indeed in s 24(2A)(d) the phrase “last paid work” appears as a substitute phrase for the phrase “remunerative work”. Be that as it may, there is no doubt that the appellant’s challenge on the appeal was to the Tribunal’s findings about s 24(2A)(f): namely, the Tribunal’s finding that the appellant’s “last paid work” was on 19 May 2011. In the various ways it was expressed, that was the substance of all the contentions supporting grounds 1 to 4. That is a challenge, as we say, to the requirement in para (f).

43    In contrast, s 24(2A)(d) is directed, as we explain below, to a causal requirement.

44    It is the Tribunal’s finding about s 24(2A)(d) itself which stands in the way of grounds 1 to 4 (even if any of them could succeed) leading to relief in favour of the appellant. Section 24(2A)(d) requires that the reason the veteran is prevented from continuing to undertake remunerative work is the war-caused injury or disease, alone.

45    The Full Court has recently considered the “alone” test (framed in relevantly identical terms under s 24(1)(c) for those veterans applying for a special rate before attaining the age of 65) in Repatriation Commission v Richmond [2014] FCAFC 124; 226 FCR 21. At [58]-[61] and [65], the Court held the “alone” requirement:

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.

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.

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.

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.)

…

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.

46    At [67], the Full Court respectfully disagreed with the approach taken by a single judge in Watkins v Repatriation Commission [2014] FCA 787; 142 ALD 106 of asking whether, putting aside the veteran’s war-caused ailments and their consequences, the veteran’s non war-caused disabilities themselves prevented the veteran from continuing to undertake her or his remunerative work.

47    Richmond was endorsed and followed by the Full Court in Repatriation Commission v Watkins [2015] FCAFC 10; 228 FCR 573 at [61], where the Full Court granted an appeal from that single judge decision, and also by the Full Court in Summers v Repatriation Commission [2015] FCAFC 36; 230 FCR 179 at [194].

48    In (i) of the summary passage of its reasons we have extracted at [21] above, the Tribunal makes a clear finding that it was not satisfied the reason the appellant was prevented from continuing to undertake remunerative work was his PTSD alone, because the evidence (including what was said at the creditors’ meeting by the appellant himself) suggested there were other, and indeed other significant, reasons. It is clear the causal link between the appellant’s accepted war-caused injury and ceasing remunerative work was not established to the Tribunal’s satisfaction.

49    There is no challenge in the further amended notice of appeal to this finding by the Tribunal. Counsel submitted that there was an implicit challenge in ground 4, by reference to the evidence of Mr Kaleske. However, ground 4 relies on Mr Kaleske’s evidence not on the causation point, but on the question of at what date the appellant was still in paid work with All-Brite.

50    The terms of ground 4 cannot be stretched to include a challenge to the Tribunal’s finding on s 24(2A)(d). That finding precludes the terms of s 24(2A) being applicable to the appellant. Since he has not established, nor sought to establish, any error of law in the way the Tribunal made that finding, even if we were persuaded the Tribunal misconstrued the phrase “remunerative work”, or misunderstood or ignored the evidence relevant to the terms of s 24(2A)(f), any such error would not be material to its decision to affirm the decision under review without a successful challenge to the Tribunal’s finding on s 24(2A)(d). That finding alone is sufficient to support the Tribunal’s decision that the delegate was correct to find the appellant was not entitled to a pension at the special rate: see Peacock v Repatriation Commission [2007] FCAFC 156; 161 FCR 256 at [21].

Whether the appellant should be permitted to argue a new question of law

51    In Haritos v Federal Commissioner of Taxation [2015] FCAFC 92; 322 ALR 254 at [80], having decided there is jurisdiction in this Court to hear and determine a question of law raised for the first time in an appeal involving s 44 of the Administrative Appeals Tribunal Act, the Full Court observed that the approach which informs the exercise of discretion is the same as that which applies in the Court’s original jurisdiction.

52    In matters such as this, where an appellant seeks to raise a legal argument for the first time on appeal, unless there are issues of the kind set out in Coulton v Holcombe [1986] HCA 33; 162 CLR 1, or other disqualifying conduct which should preclude the Court considering the argument, the interests of justice may favour granting leave to an appellant to raise a new question of law, provided it is reasonably arguable. Of course, in a given case, there may be case management considerations, or other issues of prejudice to a respondent, which tell against the grant of leave.

53    Ultimately, the Court’s task under s 44, including on appeal (see generally Haritos at [69]-[83], particularly at [79] citing with approval Summers [2015] FCAFC 36; 230 FCR 179 at [93]-[95]), is to determine whether the Tribunal’s decision was made in accordance with law, where an appellant makes a specific contention it was not. That is why, generally, the interests of justice will favour the grant of leave in respect of a new ground which is reasonably arguable, unless the prejudice to a respondent or other considerations outweigh those interests. Disregard of the Court’s appellate case management processes, and the consequent incurrence of costs needlessly are matters that may be addressed by appropriate costs orders, although we accept in some circumstances, disregard of those processes and a wholesale change in appeal grounds may be of such a level that it is appropriate to refuse leave, even if the ground is arguable. Much will depend on the individual circumstances of each appeal and the application of the principles enunciated by the High Court in AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 at 215-218.

54    There has been a real disregard of the Court’s appellate case management processes on this occasion. Those processes are there to assist both parties and the Court to prepare in an organised and orderly way for what is always a busy period of Full Court sittings. The objectives in s 37M of the Federal Court of Australia Act 1976 (Cth) are not advanced if an appellant treats a notice of appeal as if it is a perennial draft, which can be changed as it suits the appellant, simply by invoking the importance of the Court ensuring that Tribunal decisions are made in accordance with law. Although as we have noted that is a fundamental aspect of the Court’s jurisdiction under s 44, there are competing considerations in a resource-intensive process such as an appeal.

55    In the present appeal, no explanation, by way of an affidavit in support, was offered to the Court about why the onus argument was not raised before the primary judge, nor why it was raised so late in the appellate process. In our opinion, such matters should usually be the subject of evidence, so that the Court has a clear foundation on which to exercise its discretion. If the explanation relates to a change in counsel, or change in views of counsel, there is no reason that cannot be the subject of evidence. Appellants should ordinarily be expected to explain, by affidavit, the basis for an application and not leave the Court to speculate as to the explanation. This is so even if the explanation involves oversight or lateness in the thinking of legal representatives.

56    Counsel explained from the Bar table that the ground had occurred to him when he was briefed shortly before the hearing, and he ensured the respondent was promptly informed. That sequence of events does not detract from the unsatisfactory nature of what has occurred in this appeal.

57    Properly in the circumstances, counsel for the respondent accepted there was no prejudice to the respondent in dealing with the new ground, and indeed she was prepared to deal with it in the course of the appeal.

58    That being the case, and the new question raising a legal argument about whether the Tribunal impermissibly imposed an onus of proof on the appellant in the course of its review, if we considered the ground had any merit, we would have granted leave to amend the notice of appeal to include it as a ground.

59    However, in our opinion the new question is without merit, and leave to raise it should be refused. We turn to explain why we consider there is no merit in the question.

Whether the Tribunal imposed an onus of proof on the appellant

60    The question, as developed by counsel, itself turned on two matters. The first matter was two short passages, in different parts of the Tribunal’s reasons.

61    In [7], in the course of explaining which provisions of the Act were applicable to the appellant, the Tribunal said:

Therefore, he must satisfy s 24(2A) of the Veterans’ Entitlements Act 1986 (the Act). The relevant parts of s 24 are [and the Tribunal then proceeded to set them out].

(Emphasis added.)

62    The words in bold are those emphasised in argument by the appellant. We have quoted this passage as it appears in the reasons because its context, as an introductory paragraph, is important in assessing the strength of the appellant’s contention about onus.

63    The second passage is at [25] of the Tribunal’s reasons where the Tribunal’s first two sentences are as follows:

The applicant applied for an increase in his pension after he turned 65. Therefore, he must satisfy the requirements in s 24(2A) of the Act.

(Emphasis added.)

64    Again, the words in bold are those relied on by the appellant.

65    In Grant v Repatriation Commission [1999] FCA 1047, Sundberg J said at [13]:

The applicant argued that the Tribunal erred by placing the onus on the applicant to demonstrate that he met the requirements of s 24(2A)(d), contrary to s 120(6) of the Act. In support of this argument, the applicant points to par 18 of the Tribunal’s reasons for decision, in which the Tribunal concludes that “on the evidence … the applicant did not satisfy the ‘alone test’”. It was submitted that this indicates that the Tribunal required the applicant to satisfy it that he met the ‘alone test’. However, on a fair reading of the passage, the Tribunal is not requiring the applicant to satisfy it, but rather that he had to satisfy the ‘alone test’. This is merely a statement of what is required by the legislation – to be eligible for a pension at the Special Rate, the applicant must satisfy the “alone test”. It does not impose an onus on the applicant to satisfy the Tribunal that the requirements of the “alone test” are met.

66    Mr Grant was successful on appeal on grounds unrelated to the onus issue.

67    His Honour’s observations are equally applicable to the passages in the Tribunal’s reasons which we have just extracted. The Tribunal is doing no more than setting out what the Act requires of a veteran’s circumstances before a pension at the special rate will be payable. Those requirements are not discretionary in any sense: the terms of the Act require the decision-maker to be satisfied they exist. By using the phrase “must satisfy”, all the Tribunal here was doing was, correctly, explaining that each of the paragraphs in s 24(2A) imposes such requirements and that an applicant must meet each of them. In our opinion the Tribunal’s language signified no more than that the appellant “must fall within” the terms of each provision.

68    In any case before a merits review tribunal (or a first instance decision-maker), a decision can only be made on the basis of relevant and probative material. The material must be probative of the matters for which the statute provides: see Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85; 44 FLR 41 per Deane J. If an applicant does not provide evidence and information sufficient to meet the statutory requirements, an applicant is unlikely to have the statutory power exercised in her or his favour. And unless and until a decision-maker is satisfied, or persuaded, that the requirements are met, then no occasion to exercise the power in favour of an applicant arises. In that sense, as a practical matter, it is not incorrect to say that a person “must satisfy” the requirements in the statute. To say that is not to impose an onus of proof on an applicant, but rather to recognise the operation of the legislative scheme under which the person seeks a benefit or interest: see generally, McDonald v Director-General of Social Security [1984] FCA 59; 1 FCR 354 at 356-357 and 358 (per Woodward J), 366 (per Northrop J) and 369 (per Jenkinson J); Ward v Western Australia [1996] FCA 1452; 69 FCR 208 at 215-218; and Evans v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] FCAFC 81; 289 ALR 237 at [18] and the cases there cited.

69    The second matter was the location in the Tribunal’s reasons for decision of some findings concerning inconsistencies in the evidence about when the appellant last worked. The appellant submitted it was located prematurely in the Tribunal’s reasons, out of sequence with the remainder of the reasons which dealt with the Tribunal’s findings on the evidence. This, the appellant said, revealed that the Tribunal had formed a sceptical view of the veteran from the outset, and then had sought to have the appellant disprove the inconsistencies it had identified, effectively imposing an onus of proof on him, contrary to the express requirements of the Act.

70    We do not accept this submission. There are circumstances where inferences may be drawn from the structure and content of a tribunal’s reasons so as to establish legal error. It may be that the reasons reveal what that particular tribunal did and did not consider material (see Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at [5] and [10] per Gleeson CJ); or reveal how a tribunal considered material it had not disclosed to a party (see Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; 225 CLR 88); or reveal that a tribunal has failed to respond to a substantial argument put and so denied procedural fairness (see Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; 243 CLR 164 at [35]); or reveal that a matter of material relevance was overlooked or discounted when it should not have been (Maurici v Chief Commissioner of State Revenue [2003] HCA 8; 212 CLR 111 at [8]). In the present appeal, the structure of the Tribunal’s reasons does not lead us to conclude that what it was in fact doing was imposing a legal burden on the appellant to disprove apparent inconsistencies; nor to refuse to accept the appellant’s claims unless he proved certain matters.

71    Paragraph [10] appears in what might be described as the introductory section of the Tribunal’s reasons, shortly after it sets out the terms of s 24(2A). After describing the filing of additional material after the review hearing, the last sentence in the immediately preceding paragraph ([9]) states:

The discussion which follows and the decision I have made reflects the evidence heard in this review, the documents received into evidence and the written submissions of both representatives.

72    Given that preface, there is nothing untoward about the fact that paragraph [10], which follows, contains findings of the Tribunal, even though it is located in what otherwise reads as the introductory part of the Tribunal’s reasons. It might be said that the main heading in the Tribunal’s reasons “The Evidence”, which follows paragraph [10] and precedes paragraph [11], seems misplaced. That is a criticism of style and formatting but not of substance. Neither looseness of language nor unhappy phrasing are generally sufficient to lead to a conclusion of legal error: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; 185 CLR 259 at 272. Scrutiny of the placement of this paragraph is, we consider, something even further removed from legal error.

73    Further, when paragraph [10] is read, as it must be, with the remainder of the Tribunal’s reasoning process especially at [28]-[41], it is clear that the Tribunal considered all of the material before it in deciding what was the correct or preferable decision about when the appellant last undertook paid work, and what that work was. There is nothing in the remainder of the Tribunal’s reasons to indicate it erected some kind of evidentiary hurdle for the appellant, based on what it had said in paragraph [10]. In particular, it made up its own mind about the material to which it had referred in paragraph [10], as reflected in paragraph [28], which we have extracted at [17] above.

74    In our opinion, the new ground of appeal has insufficient merit to warrant a grant of leave to raise it for the first time on appeal to this Court. Its lack of prospects should have been obvious to the appellant’s solicitor Mr De Marchi. Mr De Marchi was the solicitor on the record in Grant [1999] FCA 1047, and appeared on behalf of Mr Grant before Sundberg J.

Costs

75    Given the circumstances in which this appeal was conducted, the abandoning of grounds and the raising of new ones, and the fact Mr De Marchi appeared in Grant, the Court inquired whether, if it was disposed to make a costs order against the appellant in this proceeding, Mr De Marchi would undertake to the Court to pay those costs, rather than Mr Beezley having to pay them himself. After an adjournment, counsel informed the Court he had those instructions. However, he then informed the Court he was also instructed by his client Mr Beezley, that Mr Beezley would reimburse Mr De Marchi if the Court ordered Mr De Marchi to pay the respondent’s costs.

76    Given what was conveyed to the Court on behalf of the appellant, despite the Court’s view about where responsibility lies for the unreasonable way in which this appeal has been conducted in terms of the constant shifting of appeal grounds and the raising of grounds previously determined to have little merit, there now seems to be no basis for anything but the usual order as to costs. The respondent should also be compensated for any costs incurred in dealing with the further amended notice of appeal, and any costs thrown away by reason of the very late abandonment of other grounds of appeal.

Associate:

Dated:    20 November 2015