FEDERAL COURT OF AUSTRALIA

VETERANS’ AFFAIRS - Veterans’ Entitlements Act 1986 (Cth), s 24(1)(c) - whether the issue of the “remunerative work that the veteran was undertaking” was properly addressed - whether the issue of the appellant suffering loss of earnings solely by reason of war-caused incapacity was properly addressed.

Veterans’ Entitlements Act 1986 (Cth), s 24(1)(c), s 119

Banovich v Repatriation Commission  (1986) 69 ALR 395, applied

Doig v Repatriation Commission (Lindgren J, 18 December 1996, unreported) cited

Hindi v The Minister for Immigration and Ethnic Affairs (1988) 20FCR, cited

Broussard v The Minister for Immigration and Ethnic Affairs  (1988) 21 FCR 1 472, cited

Repatriation Commission v Smith (1987) 15 FCR 327, cited

R v Watson;  Ex parte Armstrong (1976) 136 CLR 248, cited

Livesey v The New South Wales Bar Association (1987) 151 CLR 288, cited

Vakauta v  Kelly (1989) 167 CLR 568, applied

JOHN JOSEPH FLENTJAR v

REPATRIATION COMMISSION

VG 257 of 1997

BEAUMONT, BRANSON & MERKEL JJ

MELBOURNE

10 OCTOBER 1997

THE COURT ORDERS THAT:

The appeal is dismissed with costs.

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

REASONS FOR JUDGMENT

BEAUMONT J:

I agree with Branson J.

Associate:

Dated:              10 October 1997

REASONS FOR JUDGMENT

BRANSON J:     This is an appeal against a decision of a single judge of this Court, Spender J, whereby a decision of the Administrative Appeals Tribunal (“the Tribunal”) was set aside, and the case remitted to the Tribunal to be heard and decided in accordance with law.  The issue before the Tribunal was whether Mr Flentjar satisfied the requirements of s 24 of the Veterans’ Entitlements Act 1986 (Cth) (“the Act”) so as to be entitled to his pension at the special rate.  Section 24 of the Act, as in force at the relevant time, provides as follows.

“24(1)This section applies to a veteran 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; and

            (b)        the veteran is totally and permanently incapacitated, that is to say, the veteran’s incapacity from war-caused injury or war-caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and

            (c)        the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings, on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity;  and

     (d)        ... ”

   (2)  For the purposes 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)        ... .”

It was accepted both before the Tribunal and before Spender J that Mr Flentjar satisfied the requirements of subparagraphs 24(1)(a) and (b).  The issue before the parties was thus limited to the question of whether Mr Flentjar satisfied subparagraph 24(1)(c).  Spender J concluded after reviewing the reasons for decision of the Administrative Appeals Tribunal that the Tribunal had failed to address a crucial issue as far as section 24(1)(c) was concerned, namely, the issue of whether Mr Flentjar would probably have worked as a taxi driver or taxi owner-driver in the assessment period had he been free of war-caused incapacity.

As his Honour pointed out, Mr Flentjar's age prevented his working as a taxi driver between the application day, 7 August 1991, and February 1994.   In February 1994, the Victorian taxi directorate changed its policy so as to allow a person aged over 70 to obtain a taxi driver’s certificate subject to medical fitness to drive.  His Honour noted that the evidence before the Tribunal indicated that Mr Flentjar had the medical capacity to hold a taxi driver's licence after 1994, but that the Tribunal did not in its reasons for decision express and address the issue of whether it was likely that, war-caused incapacity aside, Mr Flentjar would have engaged in remunerative employment as a taxi driver after February 1994.   In February 1994 Mr Flentjar was more than 77 years old. 

The submissions of Mr Flentjar on appeal to this Court include the following contention:

                                                                                                                                                                                                         “Having heard the Appellant's uncontradicted evidence that he had sustained a loss of income from the operation of a taxi licence because of his service related incapacities, the Tribunal had to apply common sense to the proposition that he might still be working at the age of 77.  It said;  “it was his view, (Dr Stone), that but for his war-caused disabilities alone, the Appellant could drive a taxi on the basis of an eight hour shift”. Even if strictly required the point made by his Honour had been met.”

Even if the difference between Mr Flentjar's capacity to drive at the age of 77 and the likelihood that he would have chosen to do so to produce income is put to one side, the difficulty, in my view, with the above submission is its failure to identify the relevant "remunerative work that the veteran was undertaking" within the meaning of s 24(1)(c) of the Act.  As the Full Court of this Court pointed out in Banovich v Repatriation Commission (1986) 69 ALR 395, at 402, when considering the provision analogous of section 24(1)(c) in the Repatriation Act 1920 (Cth),“remunerative work” in this context refers to a type of work which the veteran previously undertook and not to any particular job (see also Doig v Repatriation Commission (Lindgren J, 18 December 1996, unreported).

The evidence before the Tribunal reveals that, sometime between 1950 and 1959, Mr Flentjar purchased a licence to operate a taxi, and that thereafter, until about 1970, he earned an income by driving such taxi.  In about 1970, by reason of war-caused bowel problems, Mr Flentjar was unable to continue working as a taxi driver.  He then sold his taxi with its licence, as the Tribunal found, because of his bowel problems.  It would thus appear that the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the Act was the work of taxi driving, or possibly the work of being a taxi owner-driver.   If it were shown that the leasing of a taxi licence for reward involved appreciable administrative or management tasks, it would presumably be open to a decision maker to find that such leasing amounted to remunerative work for the purpose of s 24(1)(c) of the Act.  However, Mr Flentjar has never earned remuneration in this way.  If he had, it would, in my view, be a different category of remunerative work from the work of taxi driving or working as a taxi owner-driver.  The finding of the Tribunal that “through being prevented from continuing to operate his taxi [Mr Flentjar] is suffering a loss of earnings that he would not be suffering if he was free of incapacity from his war-caused disabilities alone” obscures, rather than elucidates, the issue of the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the Act.

The evidence before the Tribunal does not make it self-evident that, but for his war-related incapacities, Mr Flentjar would have continued to drive a taxi into his advanced years.  In his examination in chief before the Tribunal, the following questions and answers appear:

“Now, Mr Flentjar, you are aware that the taxi directorate have removed the age restriction as far as driving cabs.  If you were - if you did not have your bowel condition and your anxiety, and your bronchitis and your ischaemic heart disease, would you consider apply for a driver’s certificate or a driver’s licence to drive -  to own a cab, to drive a cab?‑‑‑Well, I would consider having - if I had the money to own the plate and let, perhaps, the wife to operate it for me ---

            Yes?‑‑‑Or a family [member].  I’ve now got a son of 30, he's unemployed, yes.”

In cross-examination, after Mr Flentjar had said that as at 7 August 1991, he would have liked to drive a taxi if he could have done so, the following questions and answers appear:

“So, my question is 7 August 1991, the application day, you were 74 years and 11 months, they tell you you can’t get a licence, would you have given away the idea of being a driver and decided to retire or what?‑‑‑Well, being a driver, yes, but I certainly would have - my son now is 30, I mean, he would have been driving for me.

So, at that time yes, you would give away the idea of being a driver but you would be interested in leasing the licence out?‑‑‑Yes, anything to bring revenue in, yes.”

In my view the issues before the AAT in this case were as follows:

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?

I agree with Spender J that the Tribunal appears not to have given proper, genuine, and realistic consideration to issue 4 above (Hindi v The Minister for Immigration and Ethnic Affairs (1988) 20 FCR 1 at 13; and Broussard v The Minister for Immigration and Ethnic Affairs (1988) 21 FCR 472 at 483).  It is issue 4 which throws up for consideration the question of what Mr Flentjar probably would have done if he had none of his service disabilities (see Repatriation Commission v Smith (1987) 15 FCR 327 at 336-337).

It seems to me that, in addition, the Tribunal has failed to address issue 1 above, and that its failure to do so has created ongoing confusion as to the real issues in this case.  Assuming a finding of fact that the relative remunerative work which Mr Flentjar had undertaken was work which involved the driving of taxis, issue 2 above would involve consideration being given to possible impediments in the way of Mr Flentjar's re-entering the workplace as a taxi driver during the assessment period relevant to this proceeding.  On the application day, Mr Flentjar was aged 74 years and 11 months.

At the time when he attained the age of 70 years, it was a firm policy of the authority then responsible for the issue of taxi driver certificates that such a certificate could not be held by a person who had attained the age of 70 years.  That policy was not abandoned until the time when Mr Flentjar was aged 77 years and 5 months.  Although the Tribunal accepted medical evidence to the effect that, but for his war-caused incapacities, Mr Flentjar would have been fit to drive a taxi in excess of up to eight hours, consideration nonetheless was required to be given to whether his war-caused incapacities aside, it was likely that he would have sought and obtained  a taxi driver's certificate during the assessment period, and thereafter worked as a taxi driver or taxi owner-driver.

Assuming a finding, upon consideration of issue 3, that his war-caused incapacities were the only factors preventing Mr Flentjar from continuing to undertake the work of a taxi driver or taxi owner-driver, issue 4 would involve consideration of whether, having been legally disqualified from driving a taxi for more than seven years, Mr Flentjar would have sought to re-enter the workforce as a taxi driver or taxi owner-driver at the age of 77 years when such disqualification was lifted.  I thus agree with Spender J that the Tribunal erred in law in reaching its conclusion that Mr Flentjar was entitled to payment of the pension at the special rate with effect from 15 September 1992.

I further agree with Spender J that s 119 of the Act which provides, amongst other things, that the Repatriation Commission in considering, hearing or determining, and in making a decision in relation to a claim “shall act according to substantial justice and the substantial merits of the case” does not permit disregard of the statutory criteria for the grant of a pension at the special rate. 

It is, however, necessary to give consideration to the appellant's contention that certain comments by his Honour made during the hearing gave rise to a reasonable apprehension of bias in relation to the appellant's claim pursuant to s 24 of the Act.

The appellant relies on the following exchange with counsel for the respondent, after counsel had referred to the observations of Beaumont J in Repatriation Commission v Smith (1987) 15 FCR 327 at 337 relating to s 24(1)(c) requiring the Tribunal to attempt to assess what the veteran probably would have done if he had none of his service disabilities:

“HIS HONOUR:         Yes, this caused a lot of trouble, as I understand it.  Yes, it did.  I think Smith was the case that led to the veterans lobbying ensuring that a TPI pension lasted for life.

MR HANKS:               Yes, because there was some observations made in the course of the ---

HIS HONOUR:           Well, the TPI is to compensate people for loss of earning capacity because of the war.  It is super generous to say once you get it you can live as if you were a worker when you would not have been a worker but for your war caused injury.

MR HANKS:               Yes

HIS HONOUR:           Anyway, I know ---

MR HANKS:               Your Honour, that is not the point that I wanted to agitate right now.

HIS HONOUR:           But it means the special rate’s a gravy train. Yes. ”

In context, his Honour appears to be commenting critically on a suggestion that s 24(1)(c) can give rise to payment of a special rate being payable during the period when the veteran would probably not have been working, even if he did not have a war-caused injury. 

I do not consider that the remarks of his Honour in the circumstances of the issues which were required to be addressed by his Honour are such that the parties or members of the public might have entertained a reasonable apprehension that his Honour might not bring an impartial and unprejudiced mind to the resolution of the matter before him(see R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 258-263;  and Livesey v The New South Wales Bar Association (1987) 151 CLR 288 at 293-294). 

In any event, it was pointed out by Brennan, Deane and Gaudron JJ in Vakauta v Kelly (1989) 167 CLR 568 at 572:

“Where such comments which are likely to convey to a reasonable and intelligent lay observer an impression of bias have been made, a party who has legal representation is not entitled to stand by until the contents of the final judgment are known and then, if those contents prove unpalatable, attack the judgment on the ground that, by reason of those earlier comments, there has been a failure to observe the requirement of the appearance of impartial judgment.  By standing by, such party has waived the right subsequently to object.” 

In my view, the appeal should be dismissed.

I certify that this and the preceding

seven (7) pages are a true copy of

the Reasons for Judgment herein of

the Honourable Justice Branson

Associate:

Dated:

REASONS FOR JUDGMENT

MERKEL J

I also agree with Branson J.

Associate:

Dated: