FEDERAL COURT OF AUSTRALIA

Byrne v Repatriation Commission

[2001] FCA 1134

veterans’ entitlements – where war-caused incapacity “substantial cause” of applicant’s failure to obtain remunerative work within the meaning of s 24(2)(b) Veterans’ Entitlement Act 1966 (Cth)

Veterans’ Entitlements Act 1986 (Cth) ss 24(1)(c), 24(2)(b)

Repatriation Commission v Smith (1987) 15 FCR 327 referred to

Repatriation Commission v Maley (1991) 24 ALD 43, (1991) 14 AAR 278 referred to

Birtles v Repatriation Commission (1991) 33 FCR 290 referred to

Thomas v Repatriation Commission (1994) 50 FCR 112 referred to

Flentjar v Repatriation Commission (1998) 48 ALD 1, (1997) 26 AAR 93 referred to

Repatriation Commission v Flentjar (1997) 47 ALD 67 referred to

KEVIN LEWIS BYRNE v REPATRIATION COMMISSION

N 425 OF 2001

GYLES J

SYDNEY

17 AUGUST 2001

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

THE COURT ORDERS THAT:

1.                  The appeal be allowed.

2.                  The respondent pay the applicant’s costs.

3.                  The decision of the Administrative Appeals Tribunal dated 19 March 2001 be set aside.

4.                  The matter be remitted to the Administrative Appeals Tribunal for rehearing according to law.

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

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

REASONS FOR JUDGMENT

1                     This is an appeal on questions of law from a decision of the Administrative Appeals Tribunal (“AAT”) on 19 March 2001 as to entitlements of Kevin Lewis Byrne (“the applicant”) pursuant to the Veterans’ Entitlements Act 1986 (Cth) (“the Act”).

2                     The debate between the parties concerns an aspect of a claim for a special rate of pension pursuant to s 24 of the Act, namely, one issue as to the proper construction of              s 24(2)(b) of the Act.  That subsection relates back to s 24(1)(c).  The relevant provisions are as follows:

“24.     Special rate of pension

(1)               This section applies to a veteran if:

…

(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 from of that incapacity;  and

…

(2)               For the purpose of paragraph (1)(c):

…

(b)               where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.”

3                     The AAT found that the applicant has the following war-caused disabilities:

·                    post traumatic stress disorder with alcohol abuse (“PTSD”);

·                    bilateral sensorineural hearing loss;

·                    osteoarthrosis of right and left knees;  and

·                    sleep apnoea.

4                     The applicant was born on 4 February 1945 and was discharged from the Army in 1967.  The AAT examined the history of the applicant after his discharge from the Army, with particular emphasis upon the applicant’s work and his attempts to find work.  There is no need to repeat this history in this judgment.  There is no challenge to the factual findings.  The AAT found that the applicant had been actively seeking employment, but refrained from making a finding as to whether he continued to seek work at least until April 1996, when he lodged his claims, as it found that the war-caused disabilities were not the substantial cause of his inability to work.

5                     Paragraphs 115, 116 and 117 of the AAT’s decision are as follows:

“115.  … the Tribunal will now move to consider whether the Applicant’s accepted disabilities were the substantial reason for his inability to obtain work.  Apart from his war-caused disabilities, he is now unable to work delivering mail because his shoulder condition precludes him from driving for more than 1½ hours.  It also limits his ability to pass mail through the window of his vehicle to deposit it in rural mail boxes.

116.          Despite not advising prospective employers of his disabilities, and despite making a number of applications for employment, the Applicant has been unable to obtain work.  The Tribunal finds that the Applicant has been genuinely seeking work, and his inability to obtain work, at least in part, reflects the high level of unemployment in his geographical area.  The Tribunal also finds that his age and time out of the workforce are factors that, in addition to the high unemployment in his area, prevent him from obtaining work.  However, these factors must be considered in perspective.  In 1982 when he first moved to Kempsey he managed to obtain work mowing lawns and eventually managed to obtain work delivering mail for Australia Post.  He obtained that employment despite the high level of unemployment in the area at that time.  It must also be noted that although the Applicant has applied for a number of jobs and has achieved interviews for some of them he has not obtained work.  His evidence was that he did not disclose the existence of his war-caused disabilities.  However, probably because of his PTSD, his presentation is such that he is unlikely to attract employers.  It is not [un]reasonable [sic] to interpret that his age, time out of the workforce and the high level of regional unemployment are the main reasons why he has been unable to obtain employment.  The Tribunal finds that a significant reason why he has been unable to obtain employment is because of his PTSD.

117.          However, in addition to the Applicant’s war-caused disabilities there are a number of factors that prevented him from continuing to undertake remunerative work.  Taking the totality of these additional factors into account, the Tribunal finds that the Applicant’s war-caused disabilities are not the substantial cause of his inability to work.  They are but one of a number of major factors that are preventing him from continuing to work.  As the Applicant fails to meet the “substantial cause” test in s 24(2)(b) of the Act, he also fails to meet the provisions of s 24(1)(c).  Similarly he fails to meet the provisions of s 23(1)(c).  Therefore the Applicant is not entitled to payment of pension at the Special (Totally and Permanently Incapacitated) Rate or the Intermediate Rate.”

In these paragraphs the AAT accepted the substance of the argument for the respondent which are reproduced at par 103 of the AAT’s decision.

6                     There are real difficulties in construing s 24(2)(b) of the Act, whether alone or in conjunction with s 24(1)(c).  However, the present question is limited to the issue as to whether incapacity from war-caused injury or disease was the substantial cause of the applicant’s inability to obtain remunerative work, as that was the basis upon which the AAT denied the applicant the special rate of pension.  It should be clear that I have not addressed any other issue.

7                     By the close of argument the applicant’s grounds of appeal had been amended and refined so that the grounds pressed were as follows:

“The Tribunal erred in law in paragraphs [115] to [117] of its reasons, by misconceiving the effect of s 24(2)(b) of the Veterans’ Entitlements Act 1986 (Cth), in that:

(i)                 the Tribunal addressed whether the applicant’s “war-caused disabilities”, as distinct from his “incapacity from war-caused injury and disease”, were “the substantial cause of his inability to obtain remunerative work”.

(ii)               the Tribunal weighed factors which were part of, or a consequence of, the applicant’s incapacity from war-caused disease against, rather than in favour of, his satisfaction of that requirement – namely, his location in an area having a high level of unemployment and his time out of the workforce.

(iii)             The Tribunal failed to address the hypothetical position that the applicant would have been in in relation to obtaining remunerative work if he had not been incapacitated by war-caused injury or disease.”

8                     The general proposition reflected in ground (iii) is illustrated by the points made in ground (ii).  As appears from par 116 of its decision, the AAT regarded the high rate of unemployment in the Kempsey area as a factor in the applicant’s inability to obtain work at the time of his application.  So much may be accepted as a matter of fact.  Counsel for the applicant submits that this begs the real question.  He submits that the AAT had found that the applicant’s PTSD had been a cause of his move to Kempsey.  Counsel for the respondent does not accept that this finding was made.  In my opinion, consideration of pars 69, 70, 71, 91, 93, 108, 109 and 110 of the AAT decision shows the submission for the applicant to be correct.  I agree with the submission by counsel for the applicant that a consequence of incapacity resulting from the war-caused injury or disease can hardly be counted as a factor against the applicant under s 24(2)(b) when considering the effect of that incapacity upon obtaining employment.

9                     The same may be said of the applicant’s time out of the workplace.  It may be accepted that the AAT were correct in finding that this would be a factor which increased the difficulty of the applicant in obtaining employment.  However, the AAT had found that the consequences of the applicant’s war-caused disabilities had had a significant effect upon the applicant’s ability to obtain and hold work since at least 1982.  There is a certain circularity in saying that failure to work as a consequence of war-caused incapacity destroys the causal connection between the incapacity and a later failure to obtain work.

10                  In my opinion, the applicant has established that the AAT misdirected itself as to the proper application of s 24(2)(b).  The issue is not limited to the question as to why the incapacitated person is in fact unable to obtain employment in the particular place, although that may be relevant.  In order to judge the effect of the relevant incapacity, it is necessary to compare the position of the applicant as he is with the position he would be in without the relevant incapacity.  In the present case, that requires the formation of an assessment of the work prospects of the applicant as a fifty-one year old man with his characteristics and abilities, who had never suffered from PTSD, bilateral sensorineural hearing loss, osteoarthrosis of right and left knees or sleep apnoea and who is probably not living in Kempsey.  That process enables the true effect of war-caused incapacity upon the ability of the applicant to obtain work to be assessed.

11                  Each counsel has referred to a number of authorities.  None is directly in point.  However, I regard the approach taken in Repatriation Commission v Smith (1987) 15 FCR 327 (at 337), Repatriation Commission v Maley (1991) 14 AAR 278 (at 287), (1991) 24 ALD 43, Birtles v Repatriation Commission (1991) 33 FCR 290 (at 299-300), Thomas v Repatriation Commission (1994) 50 FCR 112 (at 125) and Flentjar v Repatriation Commission (1998) 48 ALD 1, (1997) 26 AAR 93 (“Flentjar”) as consistent with the conclusion I have reached.  I should say something about Flentjar, as each counsel relied upon it.  The decision of the Full Court in that case involved some of the difficulties of applying s 24(1)(c), apart from the provisions of s 24(2)(b).  The analysis by Branson J in that case of the issues to be addressed did not concern s 24(2)(b).  Issue 3 identified by her Honour has some similarity to the issue in this appeal, but is not identical with it.  In any event, I do not read her Honour as excluding what is described as a hypothetical exercise in relation to that issue.  Indeed, the defect in the reasoning of the AAT  identified by Spender J at first instance (Repatriation Commission v Flentjar (1997) 47 ALD 67), and agreed to by the Full Court is, in substance, the same error as occurred in the present case.

12                  The decision of the AAT is set aside and the proceeding remitted to the AAT for further consideration according to law.  The respondent is to pay the costs of the applicant.

Associate:

Dated:              17 August 2001