Sheehy, Michael Brian v Repatriation Commission [1996] FCA 417

CATCHWORDS

ADMINISTRATIVE LAW - Veterans' Affairs - entitlement to pension at Special (Totally and Permanently Incapacitated) Rate under s 24 of Veterans' Entitlements Act 1986 - whether veteran "prevented from continuing to undertake remunerative work that the veteran was undertaking" - whether required that veteran had performed remunerative work or merely that veteran had undertaken obligation to do so.

Veterans' Entitlements Act 1986, s 24

Banovich v Repatriation Commission (1986) 69 ALR 395 (FCA/FC)

Starcevich v Repatriation Commission (1987) 18 FCR (FC)

Birtles v Repatriation Commission (1991) 33 FCR 290 (FCA/Hill J)

MICHAEL BRIAN SHEEHY v REPATRIATION COMMISSION

No NG 959 of 1995

Wilcox, Whitlam, Lindgren JJ

Sydney

30 May 1996

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No NG 959 of 1995

GENERAL DIVISION )

On appeal from a Judge of the Federal Court of Australia

BETWEEN:

MICHAEL BRIAN SHEEHY

Appellant

AND:

REPATRIATION COMMISSION

Respondent

CORAM: Wilcox, Whitlam, Lindgren JJ

PLACE: Sydney

DATE: 30 May 1996

MINUTE OF ORDERS

THE COURT ORDERS THAT:

1. The appeal from the order of Sackville J on 7 December 1995 that the appellant (respondent below) pay the costs of the respondent (applicant below) be allowed and that order be set aside.

2. Otherwise the appeal be dismissed.

3. The order of Sackville J on 7 December 1995 that the proceeding be remitted to the Administrative Appeals Tribunal to be determined according to law be set aside and in lieu thereof it be declared that the appellant is not entitled to be paid a pension at the rate provided for in s 24 of the Veterans' Entitlements Act 1986.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No NG 959 of 1995

GENERAL DIVISION )

On appeal from a Judge of the Federal Court of Australia

BETWEEN:

MICHAEL BRIAN SHEEHY

Appellant

AND:

REPATRIATION COMMISSION

Respondent

CORAM: Wilcox, Whitlam, Lindgren JJ

PLACE: Sydney

DATE: 30 May 1996

REASONS FOR JUDGMENT

THE COURT:

INTRODUCTION & NATURE OF PROCEEDINGS

This is an appeal from a decision of a single judge of the Court on 7 December 1995 setting aside a decision of the Administrative Appeals Tribunal ("the AAT") made on 21 April 1995 in favour of the present appellant ("the Veteran"), and ordering that the proceedings be remitted to the AAT to be determined according to law and that the Veteran pay the costs of the present respondent ("the Commission").

The AAT had decided that the Veteran was entitled to payment of pension at the Special (Totally and Permanently Incapacitated) Rate pursuant to s 24 of the Veterans' Entitlements Act 1986 ("the Act") with effect from 14 September 1992.

The Veteran now seeks an order allowing his appeal, an order setting aside the orders made by the judge at first instance, an order that the Commission's application to the Court be dismissed and an order that the Commission pay the Veteran's costs of the appeal.

We have come to the view that the appeal should be allowed in respect only of the costs order made by the Judge at first instance, but that otherwise the Veteran's appeal should be dismissed. Our reasons for these conclusions follow.

Legislative framework

A special rate of pension is provided for in s 24 of the Act. The issue before the AAT, the Judge at first instance and this Full Court has concerned para 24 (1) (c). It is convenient, however, to set out the whole of sub-s 24 (1) and part of sub-s 24 (2) as follows:

"24(1)This section applies to a veteran, other than a veteran to whom section 25 applies, if:

(a) either:

(i) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or

(ii) the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate;

(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 ..."

FACTS

The following summary of the facts is taken from the Reasons of the judge at first instance. The Veteran was born on 18 June 1917. He was educated at primary school level and worked on a farm until he joined the Royal Australian Air Force ("RAAF") in 1940, at the age of 22. While serving with the
RAAF, he was trained as a fitter.

He served in the RAAF from 1940 until February 1970. His service included operational service in World War 2, Korea and Malaysia.

Following his discharge from the RAAF in 1970, he received a Defence Forces Pension. In 1970 he commenced work as a fitter at the New South Wales State Dockyard in Newcastle. He worked until he reached the compulsory retiring age of 65 on 18 June 1982. (The Veteran gave evidence before the AAT, which it accepted, that he ceased work on 5 July 1982, but the discrepancy is of no present consequence.) From about 1977 at the dockyard the Veteran had carried out relatively light work on a drilling machine because of a problem with his back.

Within a month of leaving the State Dockyard, the Veteran obtained work as storeman with Hawker Noyes Pty Ltd ("Hawker Noyes") in Newcastle. This position was obtained through a Mr Brice, a friend of the Veteran, who at the time was the manager of the Metals Division of Hawker Noyes. Mr Brice was aware that the Veteran had a back problem. As the AAT found, the Veteran worked for Hawker Noyes for about a week but left because the work was too heavy.

Later in 1992 the Veteran sought and obtained work with Nylex Corporation Ltd ("Nylex") as a casual storeman clerk. In evidence he described this work as "lighter" than the work at Hawker Noyes, but as still involving lifting. He said in evidence that the work was more than he could manage and that the job lasted for only "roughly two weeks". A letter dated 26 September 1994, from Mr R Drelincourt, the Northern Regional Manager of Nylex, stated that the Veteran had been unable to fulfil his duties of loading and unloading consignments because of a previously injured back, and that for this reason his employment was terminated.

After the job at Nylex, the Veteran did not seek any further employment. He acknowledged in evidence that this was because he appreciated that he could not physically do what was required.

On 14 December 1992, when the Veteran was aged 75 years and ten years after his last employment, he lodged the subject pension claim. He claimed that he suffered from spondylosis, hearing loss, alcohol abuse and solar keratoses, all of which he attributed to his war service.

On 25 June 1993 the Commission accepted the Veteran's claim in respect of bilateral sensori-neutral deafness as war-caused within the meaning of the Act and assessed pension at 20% of the General Rate. The Commission refused the other claims. Subsequently, the Veteran applied to the Veterans' Review Board for a review of the Commission's decision, and the Board affirmed the Commission's decision. On 31 March 1994 the Veteran applied to the AAT for review of the Board's decision. When the matter came before the AAT for hearing, the Commission conceded that the ankylosing spondylosis and solar keratoses were war-caused and accepted further that pension was payable at 70% of the General Rate from 14 September 1992 (three months prior to the application date). The Commission also conceded that, as of the application date, the Veteran satisfied the provisions of paras 24 (1) (a) and (b) of the Act and that there was no non war-caused medical condition preventing him from working.

The AAT found that the Veteran was a truthful witness and was motivated to continue working beyond the age of 65 years. The substance of the AAT's findings and decision relevant to para 24 (1) (c) of the Act is contained in the following paragraphs:

"19. The Tribunal finds on the evidence that prior to the Applicant's retirement he was not fit to undertake the full duties as a fitter because of his back condition, and from about the age of 60 years he was doing light work. We find that at the time of his retirement he was unfit to work as a fitter, and his motivation to continue to work was such that he sought alternative work as a storeman, which we find he was unable to perform because of his back condition. We also find that except for his back condition on the balance of probabilities the Applicant would have been employed as a storeman by Mr Brice at the application date.

20. Although the Applicant has been in receipt of DFRDB pension since 1970 this did not affect his motivation to work at the Newcastle dockyard until the compulsory retirement age of 65, even though he would have been entitled to part Service Pension at the age of 60 years. His receipt of DFRDB pension
also did not interfere with his attempts to obtain work as a storeman.

21. The Veteran is, by reason of his war-caused disabilities alone, prevented from continuing to undertake remunerative work that he would have been undertaking and is, by reason thereof, suffering a loss of earnings that he would not have been suffering but for his war-caused disabilities." (AB 95-96)

REASONING OF THE JUDGE AT FIRST INSTANCE

Before the judge at first instance, the Commission contended that the AAT had failed to give adequate reasons or, alternatively, had erred in its construction of para 24 (1) (c) of the Act. His Honour thought that it was not possible to discern from the AAT's reasons why it reached the conclusion (if it did) that the Veteran's periods of employment as a storeman brought him within para 24 (1) (c). His Honour observed that without that information it was impossible to tell if the AAT had reached its conclusion by the application of correct or erroneous legal principles and that for this reason the AAT had erred in law (his Honour referred to Telescourt v The Commonwealth (1991) 29 FCR 227 (von Doussa J) at 234).

Further, his Honour held that even if the AAT's reasons were to be read as implying a finding that the Veteran had satisfied para 24 (1) (c) on the ground that the concept of remunerative work must include the work of someone "genuinely" employed in a position of full time storeman, even if only for a short time, the AAT fell into error. The reason was that a
short period of employment, even if "genuinely" entered into, is not necessarily enough to show that a Veteran over the age of 65 years had undertaken "remunerative work" within the meaning of para 24 (1) (c). In his Honour's view, a finding that a veteran over the age of 65 years had been employed as a storeman for periods totalling three weeks was not, in itself, enough to establish that the Veteran had undertaken "remunerative work" for the purposes of para 24 (1) (c) of the Act.

OUTLINE OF SUBMISSIONS ON THE APPEAL

The Veteran submitted that, in setting aside the AAT's decision because its reasons did not show that it had considered whether he had been capable at any time during his periods of employment as a storeman of carrying out the duties associated with that position, the judge at first instance had allowed the Commission's appeal on a point not raised before the Tribunal or his Honour. It is true that the precise point had not been in terms raised by the Commission in its notice of appeal to the Court nor in its written and oral submissions. However after the conclusion of argument, his Honour recalled counsel to raise the point. At that stage the Commission accepted that leave to amend would be necessary. His Honour did not grant leave and said that the issue ought not to be dealt with in so far as it constituted a separate issue. He reserved the possibility that the point might be capable of being dealt with by him in the light of the submissions which had been made - a matter which he would need to consider. Before us, the Commission did not seek leave to amend its notice of appeal to the Court.

The Veteran secondly submitted that the interpretation of para 24 (1) (c) by the Judge at first instance was wrong. He submitted that the notion of "undertaking" work signifies nothing more than undertaking the task of working, not necessarily successfully undertaking it.

Thirdly, the Veteran appealed against the order that he pay the Commission's costs.

For its part, the Commission submitted that an amendment of its notice of appeal to the Court was not necessary and that the point on which the trial Judge had allowed its appeal had been open on its existing notice of appeal to the Court and on the evidence which had been before the Tribunal.

In relation to the construction of para 24 (1) (c), the Commission submitted that his Honour's construction was correct.

In relation to the question of costs, however, the Commission said that it had not sought costs in its notice of appeal to the Court and had been surprised that the Judge at first instance had ordered the Veteran to pay its costs. Accordingly, the Commission accepted that whatever might be the result of the Veteran's appeal in other respects, his appeal against the order that he pay the Commission's costs should succeed.

REASONING ON THE APPEAL

We are able to dispose of the appeal briefly. We address first, the Veteran's second submission: the question of construction. In our opinion, the words "undertake" and "undertaking" in para 24 (1) (c) import the notion of "performance" or of a "successful" or "effective" undertaking of work. The following considerations support that construction.

1. The infinitive form "to undertake" and the past imperfect tense "was undertaking" are used with the same connotation: in both instances a "process" or "course" is involved.

2. If the Veteran's submission that the expression "was undertaking" is satisfied by the undertaking of an obligation to work for remuneration were to be accepted, apparently a Veteran would never be "prevented from continuing to undertake" remunerative work, since the Veteran would always be able to continue to undertake such obligations.

3. The notion of "ceas[ing] to engage in remunerative work" in sub-para 24 (2) (a) (i) and the notion of being prevented "from engaging in remunerative work" in sub-para 24 (2) (a) (ii) are intended to refer respectively to the "remunerative work that the Veteran was undertaking" and the remunerative work that the Veteran is "prevented from continuing to undertake" referred to in sub-para 24 (1) (c), and since the notion of "engaging" in remunerative work means performing such work, the notion of "undertaking" it has the same meaning.

It is inappropriate to attempt to define a minimum period during which work of any kind must be performed before it can be said that it qualifies as "remunerative work that the Veteran was undertaking".

Whether, as we think, para 24 (1) (c) requires that the "remunerative work that the Veteran was undertaking" must have been "performed" or "successfully undertaken" or "effectively undertaken", has not been the subject of direct decision in the two cases in which the paragraph has been considered by Full Courts of this Court. In Banovich v Repatriation Commission (1986) 69 ALR 395 it was held that the same expression in the predecessor provision did not refer to "the particular job" which the member had previously undertaken but referred to a "type of work" or "field of remunerative activity" (at 402-403). In Starcevich v Repatriation Commission (1987) 18 FCR 221, it was held that para 24 (1) (c), and in particular the word "continuing" in that paragraph, does not require that the remunerative work that the Veteran is prevented from undertaking be the last remunerative work which he undertook.

The construction which we have sought to explain above is consistent with both of these decisions and certain references in Starcevich directly support it. Fox J stated that the loss sustained by the Veteran had to be "real" and this indicates that his Honour had in mind remunerative work that had been successfully undertaken. Even more to the point is his Honour's reference to "substantial remunerative work ... undertaken in the past" (emphasis supplied). Similarly Jenkinson J suggested, although tentatively, that past remunerative work does not satisfy the terms of para 24 (1) (c) unless it continued for more than a very short period.

In Birtles v Repatriation Commission (1991) 33 FCR 290 Hill J understood Starcevich as having excluded from consideration remunerative work which the Veteran had undertaken for only a short period. His Honour identified the question to be asked as follows:

" ... has the veteran by reason of his war incapacity been prevented from ‘continuing’ a type of remunerative work which he previously undertook (not being work undertaken only for a short period)?" (at 299)

Although it is perhaps understandable that there have been references in the cases to a "short" or "very short" period of work, we would prefer to say that the "remunerative work that the Veteran was undertaking" must have been "performed" or successfully undertaken" or "effectively undertaken".

The remunerative work on which the Veteran relies is his work as a storeman for one week for Hawker Noyes and his work as a storeman for two weeks for Nylex. He commenced working for Hawker Noyes within about a month after retiring from the New South Wales State Dockyard. The two weeks' work for Nylex Limited was undertaken a month or two later.

Evidence from Trevor Brice who had been manager of the Metals Division of Hawker Noyes at the relevant time was that the Veteran tried very hard to perform the duties required which included some lifting and pushing but that it became evident soon, indeed within a week, that he was unable to cope because of his back problem. The Veteran's own evidence was as follows:

"What happened in that one week?---Well, they had a lot of work down, I didn't - it had a lot of lifting in it and that - I couldn't hack it. It was pretty heavy stuff, you know like copper pipes and stuff like that." (AB 70)

Mr Drelincourt, the northern regional manager for Nylex Limited, supplied a written statement that the Veteran had been employed by Nylex as a "casual storeman clerk" for two weeks during September 1982 and that he was "unable to fulfil his duties of loading and unloading consignments because of a previously injured back and regretably [sic] [the company was] forced to terminate his employment." The applicant gave evidence that the tasks involved in the Nylex job were somewhat lighter than those at Hawker Noyes but that it was still more than he could manage. He gave the following evidence:

"In your words, what was it about that job that caused it to stop after two weeks?---The lifting, lifting. It was loading trucks and things like that.

After that time, that is towards the end of 1982, have you since sought work anywhere else?---No.

Why not?---I appreciated the fact I couldn't do it." (AB 71)

The Tribunal made a finding that the Veteran had been unable to perform the work of a storeman because of his back condition.

Once it is accepted that the requirement of para 24 (1) (c) that the Veteran must have been undertaking remunerative work requires that he should have "performed" or "successfully undertaken" or "effectively undertaken" the work, the result in the present case becomes clear. The Veteran was never capable of performing the work of a storeman for Hawker Noyes or for Nylex and so cannot be said to have "performed" or "successfully undertaken" or "effectively undertaken" the work of a storeman.

We now turn to the first submission made by the Veteran noted
earlier. The Commission's notice of appeal to this Court raised the question of law whether the Tribunal had misinterpreted para 24 (1) (c) of the Act and asserted that it had done so by misinterpreting the expression "remunerative work that the Veteran was undertaking" in para 24 (1) (c) of the Act. There was a statement of agreed facts before the AAT. In the early stages of the case before the AAT, counsel for the Commission said that an issue to be considered was "the reasons for Mr Sheehy leaving work." (AB 67.21-23) In our view the notice of appeal was wide enough to encompass the point on which the judge at first instance determined the application before him. There was no prejudice to the Veteran in his Honour's taking the point into account because all relevant evidence had been led before the AAT.

In sum, we think that his Honour properly decided to deal with the "continuity" point.

As noted earlier, (a) the judge at first instance ordered that the matter should be remitted to the AAT to be determined according to law, and (b) the AAT had found that the Veteran had been unable to perform the work of a storeman because of his condition. Since submissions follow evidence, it could not be suggested that the content of the evidence before the AAT might have differed if the construction of para 24 (1) (c) to which we have referred had been put to the AAT by the Commission or adopted by the AAT. Upon the construction of the paragraph adopted by us, the AAT was bound to dismiss the appeal, as a matter of law. In these circumstances it would serve no purpose for the matter to be referred to the AAT for further consideration. Rather, it is appropriate that a declaration be made now as indicated below.

CONCLUSION

The appeal will be allowed in respect of the order for costs which will be set aside, but otherwise the appeal will be dismissed.

The order of the judge at first instance remitting the matter to the AAT will be set aside and in its place there will be a declaration that the Veteran is not entitled to be paid a pension at the rate provided for in s 24 of the Act.

The Court notes that the Commission has made it clear that it does not seek an order for costs of the appeal and, accordingly no such order will be made.

I certify that this and the preceding 15 pages are a true copy of the Reasons for Judgment of the Court.

Associate:

Dated: 30 May 1996

Heard: 15 May 1996

Place: Sydney

Decision: 30 May 1996

Appearances: Mr M B Smith of counsel instructed by Vardanega Roberts appeared for the appellant.

Miss R M Henderson of counsel instructed by the Australian Government Solicitor appeared for the respondent.

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