FEDERAL COURT OF AUSTRALIA

Winch v Repatriation Commission [1999] FCA 408

VETERANS’ ENTITLEMENTS - appeal from decision of primary judge affirming decision of Administrative Appeals Tribunal that appellant’s condition was not war-caused within s 9 of the Veterans’ Entitlements Act 1986 (Cth) – whether the primary judge erred in finding that the Administrative Appeals Tribunal had not erred in law when it decided that the hypothesis put forward by the appellant’s expert was not a reasonable hypothesis – whether the primary judge erred in finding that the Administrative Appeals Tribunal had not breached its obligation to give the appellant procedural fairness

Veterans’ Entitlements Act 1986 (Cth), ss 9, 120

Administrative Appeals Tribunal Act 1975 (Cth), s 33(1)

Byrnes v Repatriation Commission (1993) 177 CLR 564, cited

Repatriation Commission v Whetton (1991) 31 FCR 513, cited

Transport Workers Union of Australia & Ors v Barry Hansch (unreported, Full Court of Industrial Relations Court of Australia, 7 September 1998), cited

Re Coldham; ex parte Municipal Officers Association of Australia (1989) 84 ALR 208, cited

DONALD WINCH v REPATRIATION COMMISSION

VG 525 of 1998

O'CONNOR, BRANSON and MARSHALL JJ

MELBOURNE

19 APRIL 1999

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.         The appeal be dismissed.

2.         The appellant pay the respondent’s costs of the appeal including reserved costs, if any.

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

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

THE COURT:

1                     This is an appeal from a judgment of a judge of the Court, Merkel J, given on 8 September 1998 dismissing an appeal, limited to questions of law, made from a decision of the Administrative Appeals Tribunal (“AAT”) dated 25 July 1997.  This decision affirmed the decision of the Repatriation Commission (the respondent to this appeal) that the appellant's calcific aortic stenosis was not war-caused within the meaning of s 9 of the Veterans’ Entitlements Act 1986 (Cth) (“the VE Act”).

Grounds of Appeal

2                     Two grounds of appeal were argued.

            1.         That his Honour was wrong in finding that the AAT had not erred in law when it decided that the hypothesis put forward by Dr Rosenbaum was not a reasonable hypothesis,  his Honour having wrongly interpreted ss 9 and 120 of the VE Act and failed to apply the correct test in assessing such hypotheses, and

            2.         That his Honour was wrong in finding that the AAT had not breached its obligation to give the appellant procedural fairness in that his Honour had wrongly concluded that a reference to text books, not used or referred to at the AAT hearing, in the reasons for decision of the AAT did not amount to a denial of natural justice because the references did not raise a new point.

Background and Relevant Legislation

3                     The appellant was on operational service as a pilot in the RAAF from 23 June 1941 to 27 March 1946.   It was, and is, accepted that he commenced smoking as a consequence of his war service.  The standard of proof to be applied in determining his claim is that found in s 120 of the VE Act which relevantly states:

"120.  (1)   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.

...

  (3)   In applying subsection (1) or (2) in respect of the incapacity of a person from injury or disease, or in respect of the death of a person, related to service rendered by the person, the Commission shall be satisfied, beyond reasonable doubt,  that there is no sufficient ground for determining:

  (a)     that the injury was a war-caused injury or a defence-caused injury;

  (b)     that the disease was a war-caused disease or a defence-caused disease;  or

  (c)      that the death was war-caused or defence-caused;

as the case may be, if the Commission, after consideration of the whole of the material before it, is of the opinion that the material before it does not raise a reasonable hypothesis connecting the injury, disease or death with the circumstances of the particular service rendered by the person."

4                     The circumstances in which injuries suffered or diseases contracted by a veteran are to be taken to be war-caused are found in s 9 of the VE Act which relevantly, states:

"9.  (1)   Subject to this section, for the purposes of this Act, an injury suffered by a veteran shall be taken to be a war-caused injury, or a disease contracted by a veteran shall be taken to be a war-caused disease, if:

  (a)     the injury suffered, or disease contracted, by the veteran resulted from an occurrence that happened while the veteran was rendering operational service;

  (b)     the injury suffered, or disease contracted, by the veteran arose out of, or was attributable to, any eligible war service rendered by the veteran;

  (c)      ...

  (d)     ...

  (e)      the injury suffered, or disease contracted, by the veteran:

            (i)      was suffered or contracted while the veteran was rendering

                      eligible war service, but did not arise out of that service;  or

            (ii)     was suffered or contracted before the commencement of the

                     period, or last period, of eligible war service rendered by the

                     veteran, but not while the veteran was rendering eligible war

                     service;

            and, in the opinion of the Commission, the injury or disease was contributed to in a material degree by, was aggravated by, any eligible war service rendered by the veteran, being service rendered after the veteran suffered that injury or contracted that disease;”

5                     The application of s 120(1) and s 120(3) in the determination of war-caused diseases or injuries and its meaning have been extensively considered since the enactment of the legislation.  Most recently in Byrnes v Repatriation Commission (1993) 177 CLR 564 at 571 the High Court has explained how the legislation is to be applied:

"The position may be summarized as follows:  (1)  First, sub-s. (3) of s. 120 is applied:  do all or some of the facts raised by the material before the Commission give rise to a reasonable hypothesis connecting the veteran's injury with war service?   The hypothesis will not be reasonable if it is contrary to known scientific facts or is obviously fanciful or untenable.  If the hypothesis is not reasonable, the claim fails.  Proof of facts is not in issue at this point.  (2)  If a reasonable hypothesis is established, sub-s.(1) of s. 120 is applied.  The claim will succeed unless:  (a) one or more of the facts necessary to support the hypothesis are disproved beyond reasonable doubt;  or (b) the truth of another fact in the material, which is inconsistent with the hypothesis, is proved beyond reasonable doubt, thus disproving, beyond reasonable doubt, the hypothesis."

Did the Tribunal carry out its task in applying s 120(3) correctly?

6                     The appellant contended that the way in which the AAT purported to apply ss 120(1) and 120(3) in this case to conclude that the hypothesis advanced by a medical expert, Dr Rosenbaum (namely that the development of the appellant's calcific aortic stenosis was accelerated by smoking-caused atherosclerosis) was not a reasonable hypothesis was legally incorrect.  The error was identified as not keeping "the required degree of separation" between ss 120(3) and 120(1) of the VE Act because when applying s 120(3) the AAT was not required to determine or positively find if the hypothesis advanced was flawed.   At that stage, it was contended, its role was merely to examine whether there was some material which raised the relevant hypothesis.

7                     The appellant also contended that the AAT had failed to take into consideration the fact that Dr Rosenbaum was an eminent cardiologist whose medical theories would, according to authority, be rarely rejected in the kind of consideration required by s 120(3) of the VE Act.  Instead the AAT had relied on conflicting medical opinion as to the physiology of body organs to conclude that the overall hypothesis put forward by Dr Rosenbaum was "flawed".  This conflicting evidence was provided by medical experts called by the respondent and was verified by the AAT through the consultation of medical texts.  Further, it was contended, in dealing with all of the material before it, the AAT had adopted a clinical, legalistic approach devoid of the appropriate "spirit" of the beneficial legislation with which it was dealing and had fallen into the error of asking itself the positive question as to whether it was satisfied that the hypothesis raised was, in fact, reasonable, thereby reversing the onus created by s 120(3).  This error is discussed by the Full Court of this Court in Repatriation Commission v Whetton (1991) 31 FCR 513 at 521 where the Court said:

" ... s 120 made it mandatory to reach a finding in favour of the respondent unless her case could be rejected beyond reasonable doubt or, applying subs (3), the Tribunal could form the opinion that the material before it did not raise the reasonable hypothesis referred to in the statute.  It was not a question whether the Tribunal could be satisfied that there had been raised an appropriate hypothesis, a reformulation of the problem in terms obviously unfavourable to the respondent."

8                     To approach the task created by s 120(3) in this way is undoubtedly correct.

9                     It is true that in this case the consideration of the reasonableness of the hypothesis proffered was expressed in positive terms (AB 439).  However the conclusion reached by the AAT (AB 444) was expressed in the terms of the statutory formulation.  In our view it is difficult to see how, in practice, the consideration of the question of "reasonableness", having regard to all of the evidence, can be considered any way other than "positively".  Therefore the practical formulation of the steps required by a tribunal in carrying out its task under s 120(3) of the VE Act whenever it has been formulated in judgments has been expressed in positive terms.  However, this does not, of itself, amount to an approach which reverses the onus of proof.

10                  The reasons for decision of the AAT reveal that it carried out the steps as required by authority and formed the conclusion that the material before it did not raise a reasonable hypothesis.   The AAT came to this conclusion because it concluded that the hypothesis was tenuous or fanciful.   The key to its conclusion was the existence of a particular histological discrepancy between the aorta and the aortic valve.  

11                  The use of this approach by the AAT did not, in our view, prevent the identification of the hypothesis raised by the material before the AAT as contended by the appellant.  Nor did the AAT fall into the error explained in Whetton's Case (supra) by seeing its task as requiring it to be satisfied of actual causal relations.

12                  As the respondent submitted, the AAT approached its task in the following way:

"Having quoted the relevant passages from the leading authorities on the concept of a "reasonable hypothesis" within sub-s 120(3), the AAT summarised the evidence relevant to the hypothesis:

(a)       Dr Rosenbaum relied on the similarity of the material lining the aorta and the material of the aortic valve, and upon the possibility that the appellant's valve was congenitally abnormal.

(b)       Dr Hammond and Dr Rosenbaum differed on the structure and histology of the aortic valve and the aorta.

·        They were agreed that the surface of each organ was endothelium

·      Dr Rosenbaum said that the absence of muscle in the aortic valve distinguished it from the aorta;  whereas Dr Hammond stressed that the significant difference was the relative absence of blood supply to the aortic valve.

(c)        Dr Rosenbaum acknowledged the absence of any medical text reference or research evidence to support the hypothesis.

(d)       Dr Rosenbaum expressed the hypothesis in tentative terms - not that there was a causal connection between aortic valve stenosis and smoking but that there might be.  In his evidence, Dr Rosenbaum said he was "offering this as a hypothesis";  he agreed that he was proposing that the atherosclerotic process "might or could ... occur in the aortic valve";  and the possibility of some contribution from atherosclerotic change could not be excluded.

(e)        Dr Hammond regarded the hypothesis as fanciful because the disease process of atherosclerosis occurred within the walls of arteries, and could not occur in the aortic valve which was avascular.  He described the hypothesis as "gross speculation".

(f)        Dr Hammond also said that both the aortic valve and the issue of smoking and disease had been extensively studied, but the extensive research activity had not produced one suggestion that smoking was related to aortic valve stenosis. 

(g)       Professor Myers knew of no evidence to suggest the relationship proposed by Dr Rosenbaum.

The AAT considered the hypothesis by reference to the whole of the evidence before it.  It fairly summarised Dr Rosenbaum's evidence and the opposing evidence;  and then concluded that the hypothesis was flawed because the structure of the aortic valve was such that the disease process which produced atherosclerosis in (for example) the aorta could not affect the aortic valve."

Were the conclusions of the Tribunal as to the reasonableness of the hypothesis open toit?

13                  The determination of the reasonableness or otherwise of a hypothesis is a question of fact.  The hypothesis relied on in this case depended, the AAT concluded, on medical opinion concerning the vascularity of the two organs, respectively the aorta and the aortic valve.

14                  At page 72 of the transcript of proceedings before the AAT the following evidence was given by Dr Rosenbaum:

" … cigarette smoking can produce atherosclerosis in the aorta.  The hypothesis is that it can produce atherosclerosis in the aortic valve.

…

... We are talking about atherosclerosis affecting the aorta and the aortic valve.  Not atherosclerosis in the aorta having a secondary effect on the aortic valve."

15                  As we stated earlier, the medical opinions of Dr Hammond and Professor Myer as to the histology of, and difference between, the two organs (verified by medical texts) were regarded by the AAT as destroying the reasonableness of the hypothesis.  They also relied, as the respondent has pointed out, on the absence in the substantial body of research on the aortic valve and smoking of the atherosclerosis connection being raised even as a theory.   Further there were no signs of atherosclerosis in the appellant's aortic valve post operatively.

16                  When taken to p 72 of the transcript (part of which is reproduced above) counsel for the appellant said:  "To suggest that there can be atherosclerosis in the aortic valve is ludicrous”.   He made that comment in the course of submitting that his medical witness had not given evidence to that effect, and that even if he had, it was "extracted under cross-examination”. Counsel's difficulty was that no questions were asked of the witness in re-examination to correct any possible looseness of language.   In our view, the AAT was entitled to have regard to the evidence identified above in assessing the reasonableness of the hypothesis and did so.

Was the appellant denied procedural fairness?

17                  In its reasons for decision the AAT referred to and relied on three medical texts which were not referred to during the oral hearing before the AAT or brought to the attention of the parties by the AAT.  The appellant, while conceding that the AAT is not bound by the rules of evidence (s 33(1)(c) of the Administrative Appeals Tribunal Act 1975 (Cth)), argues that not to give the appellant the opportunity to make submissions to it concerning the medical texts was unfair and amounted to a breach of natural justice.  The nature of the submissions that the appellant would have made had he been given the opportunity was not made clear.

18                  In this case the AAT used the medical texts to assist it in understanding the technical evidence that it had heard about the structure of the aortic valve and the aorta.  This issue was clearly raised in the proceeding.   It was a fundamental point of disagreement between the medical experts who gave evidence before the AAT and at the heart of the hypothesis raised by the material before the AAT.  The AAT used the medical texts to confirm a known scientific fact which had been the subject of evidence by Dr Hammond and on which Dr Rosenbaum could not, according to the transcript, assist the AAT (AB 401/20). The AAT noted in its reasons for decision that the texts accorded with Dr Hammond's evidence on the matter.

19                  Counsel for the appellant did not contend that the issue on which the texts were consulted was not before the AAT, nor did he argue that the AAT misread or misunderstood the material.   He merely submitted that the opportunity to respond to this material was required because as a matter of fairness at the hearing, the AAT had taken only a "cursory look" at the issue. 

20                  In Transport Workers Union of Australia & Ors v Barry Hansch (unreported, 7 September 1998) the Full Court of the Industrial Relations Court of Australia, considering a submission of this kind in regard to industrial relations proceedings, relied on the following statement of principle enunciated by Gaudron J in Re Coldham;  ex parte Municipal Officers Association of Australia (1989) 84 ALR 208 at 220 where she said:

"As was pointed out by Deane J in Sullivan v Department of Transport (1978) 20 ALR 323 at 343, procedural fairness requires only that a party be given "a reasonable opportunity to present his case" and not that the tribunal ensure "that a party takes the best advantage of the opportunity to which he is entitled."  And it is always relevant to inquire whether the party or his legal representative should reasonably have apprehended that the issue was or might become a live issue:  see Re Building Workers' Industrial Union;  Ex parte Gallagher (1988) 62 ALJR 81 at 84;  ALR 353 at 358."  (Emphasis added)

21                  We consider that this principle applies in the present case.  The AAT has no obligation to run the case of any party before it.  The issue, as set out above, was clearly raised in the proceedings and the appellant was not denied the opportunity to deal with the relevant issues.

22                  As neither ground of appeal is made out, we dismiss the appeal with costs.

Associate:

Dated:              19 April 1999