FEDERAL COURT OF AUSTRALIA

Repatriation Commission v Richardson [2001] FCA 1626

VETERANS’ AFFAIRS – entitlements – review of pension – whether the Commission may cancel or vary a pension or allowance upon the ground that it is no longer of the view that a relevant capacity was “war-caused” – construction of subs 31(6) of the Veterans’ Entitlements Act 1986 (Cth) – matter not before the Commission, Board or Tribunal

PROCEDURAL FAIRNESS – an opportunity to be heard

Veterans’ Entitlements Act 1986 (Cth), ss 14, 15(2), 19, 19(3), 31(6), 120, 120A, 120B, 135(1)

REPATRIATION COMMISSION v IAN RICHARDSON

N 1104 OF 2001

DOWSETT J

16 NOVEMBER 2001

BRISBANE

THE COURT ORDERS THAT:

1.         The matter be remitted to the Administrative Appeals Tribunal for determination in accordance with law.

2.         There be no order as to costs.

3.         The parties have liberty to apply.

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

REASONS FOR JUDGMENT

Introduction

1                     This is an appeal by the Repatriation Commission (the “Commission”) from a decision of the Veterans’ Appeals Division of the Administrative Appeals Tribunal (the “Tribunal”).  To understand the somewhat complex history of this matter it is necessary to understand the decision-making process adopted when considering a claim for a pension pursuant to the Veterans’ Entitlements Act 1986 (Cth) (the “Act”), including the review process.  Such a claim is made pursuant to s 14.  It is investigated by the Secretary (presumably of the department administering the Act) and the outcome is submitted to the Commission for determination of the application.  That decision is subject to review by the Veterans’ Review Board (the “Board”) pursuant to s 135(1).  The Board may affirm or vary the decision or set it aside and make a decision in substitution for it.  The Board’s decision is subject to review by the Tribunal.

History

2                     The respondent has made numerous claims under the Act.  The relevant history of such claims is as follows:

•                 On 28 August 1996 the respondent lodged a claim, alleging “stress” and “chest problems”. 

•                 On 13 September 1996 he lodged a further claim alleging “hearing loss with tinnitus”.

•                 On 27 November 1996 the Commission decided that he was suffering from a depressive disorder and a post traumatic stress disorder (“PTSD”) which were war-caused but rejected a claim for asthma.  It assessed his pension at 50 per cent of the General Rate.

•                 On 28 November 1996 the Commission decided that he was suffering from bilateral sensorineural hearing loss which was war-caused and increased the pension to 60 per cent of the General Rate.

•                 On 20 January 1997 the respondent lodged an application seeking review by the Board of the rejection of his claim concerning his chest problems (treated by the Commission as asthma) and the assessment of the pension at 60 per cent of the General Rate.

•                 On that date,  he also lodged a claim for “alcohol abuse”. 

•                 He lodged a second claim for that same condition on 10 April 1997.

•                 On 18 July 1997 the Board affirmed the Commissioner’s decision that his asthma was not war-caused.

•                 On the same day the Board adjourned its review of the Commission’s decision of 28 November 1996 (concerning the rate of pension following the determination that the respondent’s hearing impairment was war-caused) and requested further information about his service history, which request was directed to the Secretary.

•                 On 1 September 1997 the Commission determined that the respondent was suffering from psychoactive substance abuse (PSA) which was war-caused and continued his pension at 60 per cent of the General Rate.

•                 On 8 October 1997 the respondent lodged a claim for “Barrett’s Mucosae”, otherwise known as gastro-oesophageal reflux disease.

•                 On 10 November 1997 the respondent applied to the Tribunal for review of the Commission’s decision refusing his claim for asthma (which had been affirmed by the Board).

•                 On 1 December 1997, following reference to information concerning the respondent’s service history supplied in answer to its request, the Board affirmed the Commission’s assessment of the respondent’s pension at 60 per cent of the General Rate.  The respondent disputed the accuracy of the new information.

•                 On 20 January 1998 the Commission decided that the respondent’s claim for gastro-oesophageal reflux disease was war-caused and increased his pension to 70 per cent of the General Rate.

•                 On 5 February 1999 the Commission purported to review its earlier decisions and to “revoke” the determinations that his depressive disorder, PTSD and PSA were war-caused.  It reduced his rate of pension to 30 per cent of the General Rate.

•                 On 15 February 1999 the respondent lodged an application for review of the Commission’s decision of 5 February 1999.

•                 On 21 July 1999 the Board set aside the Commission’s decision “revoking” its earlier determinations, determined that the respondent’s depressive disorder, PTSD and PSA were war-caused and fixed the pension at 70 per cent of the General Rate.

•                 On 8 November 1999 the respondent applied to the Tribunal for review of the Board’s decision assessing his pension at 70 per cent of the General Rate.

•                 On 10, 11 and 12 May 2000 the Tribunal heard the two applications by the respondent for review, namely:

•                 the decision rejecting his claim based on asthma; and

•                 the decision assessing his pension at 70 per cent of the General Rate.

•                 At the Commission’s request the Tribunal also reviewed the decision of the Board to set aside the Commission’s decision to “revoke” its earlier determinations concerning his depressive disorder, PTSD and PSA. 

3                     On 22 June 2001 the Tribunal:

•                 upheld the Commission’s decision concerning the asthma claim; and

•                 held that the Commission did not have power to “revoke” its earlier determinations. 

4                     Notwithstanding the latter aspect of the decision, the Tribunal also considered the question of whether the respondent’s depressive disorder, PTSD and PSA were , in fact, war-caused.  This seems to have been done in case the decision that the Commission had no power to “revoke” its determinations was upset on appeal.  The outcome is a little equivocal.  I will return to that matter at a later stage.  On the basis of its findings, the Tribunal fixed the appropriate pension at what is described as the “Special Rate” rather than at 70 per cent of the General Rate as fixed by the Board.

The appeal

5                     The Commission now appeals upon two grounds namely:

•                 that the Tribunal’s determination that the Commission’s “revocations” were without authority is incorrect in law; and

•                 that the Commission was denied procedural fairness in that the Tribunal gave it no notice that it proposed to determine the matter upon that basis, nor an opportunity to be heard concerning it. 

The statute

6                     The Commission, in “revoking” its earlier decisions, had purported to act pursuant to subs 31(6) of the Act which provides as follows:

Where the Commission is satisfied that:

(a)       having regard to any matter that affects the payment of a pension or attendant allowance, being a matter that was not before the Commission, the Board or the Administrative Appeals Tribunal, as the case requires, when the decision to grant the pension or attendant allowance, or a decision to vary the rate of the pension or attendant allowance, was made;

(b)       …

(c)        …

(d)       …

in a case to which paragraph (a) … applies, a pension or attendant allowance should be cancelled or suspended or is being paid at the higher rate than it should be … , the Commission may, by determination in writing, cancel or suspend or decrease the rate of the pension or attendant allowance … with effect, subject to subsection (7), from the day on which the determination was made or such later day as is specified in the determination.

7                     The relevant condition precedent to the exercise of the power is that the Commission be satisfied that:

•                 some matter which affects the payment of a pension or allowance was not before the Commission, the Board or the Administrative Appeals Tribunal when the decision to grant, or a decision to vary a pension or allowance was made; and

•                 having regard to that matter, a pension or allowance should be cancelled or suspended or is being paid at a higher rate than it should be.

8                     In the event that the condition precedent is satisfied, the Commission may cancel suspend or decrease the rate of the pension or allowance. 

The tribunal’s view

9                     The Tribunal observed in par 13 of its reasons (AB 302):

On a careful reading of s 31(6), the Tribunal is of the view that the Commission has power to cancel the rate of pension payable in a case where, having regard to a matter that was not before the Commission when the primary decision was made to grant the pension, it is satisfied that the pension should be cancelled.  It merely enables the Commission to determine, for example, that no pension shall be paid in respect of that condition.  It does not give the Commission power to revoke its decision that a particular condition is war-caused.

10                  This appears to mean that the subsection authorizes cancellation, suspension or reduction of a pension as opposed to the “revocation” of a particular finding upon which the grant of a pension was based, or the quantum thereof fixed.

The Commission’s decision

11                  The respondent was advised of the Commission’s decision by letter dated 5 February 1999 (AB 284 - 289).  The decision appears on the first page as follows:

Reviewed under sub-section 31(6) of the Veterans’ Entitlements Act 1986

The determination that depressive disorder and post traumatic stress disorder are war-caused is revoked with effect from 27 November 1996 being the date of the original determination.  The determination that psychoactive substance abuse is war-caused is revoked with effect from 1 September 1997 being the date of the original determination.

Payment of pension is reduced from 70 per cent of the General Rate to thirty per cent of the General Rate with effect from 25 February 1999.

The claims in relation to depressive disorder, post traumatic stress disorder and psychoactive substance abuse are refused.  Depressive disorder, post traumatic stress disorder and psychoactive substance abuse are determined to not be war-caused diseases.

12                  If the Tribunal meant no more than that subs 31(6) authorizes the Commission to cancel, suspend or vary the amount of a pension rather than to revoke a particular conclusion adopted in the course of reaching a decision to grant a pension or vary the amount thereof, then that is technically correct.  However the Tribunal’s decision seems to imply that the Commission may not cancel or vary a pension upon the ground that it no longer considers a relevant condition to have been war-caused.  Presumably, the Tribunal’s view was based upon the fact that the Commission’s powers under the subsection include only cancelling, suspending or decreasing the pension or allowance. 

Meaning of subs 31(6)

13                  It is true that the process prescribed by ss 13, 14 and 19, particularly subs 19(3), necessitates a decision as to whether a particular incapacity was war-caused.  The way in which this question is to be resolved is prescribed by ss 120, 120A and 120B.  Nonetheless the actual decision by the Commission in each case is that contemplated by s 19.  The only possible exception to this is contained in subs 14(2) which provides:

Where a determination under this Act is in force determining that any incapacity from which a veteran is suffering resulted from war-caused injury or war-caused disease, or both, but a pension was not granted to the veteran on the ground that the extent of the incapacity was insufficient to justify the grant of a pension, subsection (1) does not apply to a claim for a pension in respect of that incapacity.

14                  This section deals with the situation in which the Commission has determined that the claimant is entitled to a pension because his incapacity was war-caused (pursuant to subs 19(3)), but has fixed his incapacity pursuant to subs 19(5) at less than 10 per cent.  In that case, pursuant to subs 21A(3), no pension may be granted.  Subsection 14(2) contemplates such an outcome and deprives the claimant of the right to make a further application under subs 14(1).  However he or she may make an application for variation pursuant to subs 15(2).  It is possible that a decision to which subs 14(2) applies is not subject to review pursuant to subs 31(6), but that is not relevant for present purposes.  In my view, provided the relevant condition precedent prescribed by s 31(6) is satisfied, the Commission may cancel or vary a pension or allowance upon the ground that it is no longer of the view that a relevant incapacity was war-caused.  I should add that the only real difficulty in the construction of subs 31(6) is the reference to “any matter that affects the payment of a pension or attendant allowance”.  It might be thought that this language is inappropriate to describe a matter which affects entitlement to a pension or even the rate at which a pension is paid.  However it is clear that it was intended to do so.  The provision would otherwise have no substantial operation.

Matter not before the Commission, Board or Tribunal

15                  The respondent submitted that there was, in any event, no “matter” which was not before the Commission, the Board or the Tribunal at a relevant time and that the condition precedent to the exercise of the power under subs 31(6) was therefore not satisfied.  The matter upon which the Commission relied was the information obtained by the Board from Army Office as a result of the request on 18 July 1997.  The relevant information was considered by the Board on 1 December 1997.  The respondent challenged its accuracy.  It will be recalled that the Board was there considering an earlier decision by the Commission, assessing the pension at 60 per cent following its determination that the respondent’s hearing loss was war-caused.  It had already affirmed the Commission’s decision that the respondent’s asthma was not war-caused.  It was in no sense considering the determinations as to the depressive disorder, PTSD or PSA, save that the incapacities attributable to those matters were matters for consideration in the course of assessing the respondent’s total incapacity.  At AB 269 the Board determined:

… that, given (the respondent’s advocate’s) stated concern about the length of time that has passed between the lodgment of the veteran’s claim and the resumed Board hearing, and his request for a decision as soon as possible, that there was no merit in a further lengthy adjournment to properly resolve the marked differences between the veteran’s contentions and the advice from Army Office.  The Board therefore turned to the matter of assessment of a pension.

16                  I understand this to mean that the Board did not consider whether or not the information concerning the respondent’s service record obtained from Army Office was correct, having regard to the respondent’s assertions to the contrary.  It did not do so because the respondent was pressing for an immediate determination of his claim.  The Commission was not represented at this hearing.  (See AB 267 – 268.)  Nonetheless, the respondent asserted that at the time of its decision on 20 January 1998 the Commission must have been aware of the Army Office material.  This assertion appears to have been based upon the assumption that the supply of such information by Army Office to the Secretary constituted supply of the information to the Commission.  There seems to be no basis for this assumption.  Alternatively it was asserted that the Commission would have received a copy of the Board’s reasons for the decision dated 1 December 1997 and identified the information from that source.  This may be so. 

17                  However the decision of 20 January 1998 was not the only relevant decision for the purposes of subs 31(6).  The respondent submitted that such decision must be seen as an endorsement of all earlier decisions, including those which determined that his various conditions were war-caused.  It is difficult to accept this submission.  The decision on that day (AB 275) was as to the gastro-oesophageal reflux disease.  This was accepted as war-caused, and the respondent’s pension was increased to 70 per cent.  That decision had nothing to do with whether his depressive illness, PTSD and PSA were war-caused, save to the extent that the Commission had to calculate a total rate of pension, having regard to all conditions which were war-caused.  It is difficult to see why the Army Office material would have been before the Commission for the purposes of that decision. 

18                  In any event, the applicant’s argument assumes that subs 31(6) requires that the decision made without relevant information for the purposes of the condition precedent must be the latest decision concerning the pension or its rate.  The subsection does not say so.  It refers to both “the decision to grant the pension and a decision to vary the rate of a pension” (emphasis added).  Should the Commission consider that either the original decision to grant the pension or any subsequent decision to vary the rate was made without access to relevant material, then it may consider whether or not the pension or allowance should be cancelled, suspended, or the rate reduced.  In the present case the Commission asserted that the original decision to grant the pension and subsequent decisions to vary the rate (perhaps excluding that of 20 January 1998) were all made in ignorance of the Army Office material.  It was open to the Commission to be satisfied that such material affected the payment of the pension, that it was not before it, the Board or the Tribunal when those relevant decisions were made, and that the pension ought to be reduced.  If it was so satisfied, then it was entitled to reduce the pension, which is what it purported to do.  To the extent that the Tribunal decided to the contrary based upon its construction of subs 31(6), it was in error.  The references in the Commission’s decision to “revocation” of earlier decisions explained (perhaps inaccurately) the decision concerning the pension, but only the latter decision had any effect.  It was authorized by subs 31(6).

Procedural Fairness

19                  The Commission also argued that it had no notice that the Tribunal proposed to hold that it had acted without power and was given no opportunity to make submissions on that matter.  The respondent was, of course, in the same position.  Given my decision on the substantive issue, it is not necessary to deal with this complaint.  It would have been at least prudent for the Tribunal to have advised the parties of its intention so to proceed and to have given them an opportunity to be heard.  It is true, as the respondent has submitted, that the Tribunal was not obliged to expose every aspect of its reasoning to the parties in advance of its decision.  However that proposition assumes that the parties have had an opportunity to address the issues for consideration.  The matter proceeded in the Tribunal as a review on the merits.  The proper construction of subs 31(6) was not ventilated.  The Tribunal decided the matter upon a basis which was not argued.  It is not necessary to say anything more about this aspect of the case.

The merits

20                  One other matter arises for consideration.  Notwithstanding its determination on the law, the Tribunal expressed certain views concerning the merits of the Commission’s decision.  However the Tribunal appears to have been somewhat inconsistent in its description of what it was doing.  At pars 21 and 22 (AB 304) it said:

21.       The Tribunal has come to its decision having already taken extensive evidence in this matter without considering this prior legal issue.  In good faith the parties have put that evidence to the Tribunal on the assumption that the Tribunal’s decision would be made on the facts of the matter.  Therefore the Tribunal will proceed to make findings on the basis of that evidence should that save the parties from having to present that evidence again at some further time.

22.       The Tribunal notes that it may have been open to the Respondent, after the Tribunal’s decision is handed down, to make another decision pursuant to s 31(6) of the Act, to the effect that the Applicant’s psychiatric conditions are to be assessed as nil.  As such a decision, if it were to be made, would be reviewable, and as the Tribunal has evidence before it that would go to such a review, we considered in the circumstances that it was appropriate to proceed to consider that evidence in case the Tribunal’s findings are of assistance to the parties in clarifying the issue.

21                  After an extensive discussion of the material, the Tribunal observed at pars 52 – 54 (AB 315 – 316):

52.       The Tribunal cannot be satisfied beyond reasonable doubt that the reasonable hypothesis raised in respect of post traumatic stress disorder has been dispelled.  Thus the Tribunal finds that his depressive disorder and psychoactive substance abuse arise as a consequence of his post-traumatic stress disorder.

53.       This analysis of the evidence before the Tribunal about his service in Vietnam may assist the Respondent in reconsidering whether it is still worthwhile exercising its power under s31(6).  Now that the Tribunal has determined, as can be seen in the next section of these reasons for decision, that Special Rate is payable to the applicant and given the Tribunal’s decision that the Respondent’s decision made on 5 February 1999 is ultra vires, the Applicant is on notice that it is still open to the Respondent to properly exercise its power under s31(6) in respect of his Special Rate pension.

54.       It should be made clear, lest there is any doubt, that the Tribunal does not consider its analysis of the evidence and its findings on the substantive issues to be binding on the Respondent at this stage.  The analysis was undertaken for two reasons; firstly, because the Tribunal perceived it could assist the Respondent in deciding whether any further action under s31(6) was worthwhile; and secondly, in case the Tribunal’s decision in respect of its interpretation that the Respondent’s decision was ultra vires is not upheld by any appeal that might be brought in this regard, leaving a need for the matter to be determined on the facts.

22                  As to the question of the Special Rate, my understanding is that, assuming all other matters have been correctly determined by the Tribunal, the Commission does not dispute the respondent’s entitlement to the Special Rate.  However the question is whether or not the Tribunal has made a relevant finding as to the “merits” of the Commission’s reduction of the pension based on the new material.  It seems quite clear that it has not.  The observation that “its analysis of the evidence” and its “findings on the substantive issues” were not binding on the Commission, and the reference to there being “a need for the matter to be determined on the facts” suggest that although the Tribunal expressed somewhat firm views on the matter, it was doing so in an “advisory” capacity. 

Orders

23                  I set aside those parts of the decision of the Administrative Appeals Tribunal (Veterans’ Appeals Division) dated 22 June 2001 which:

•                 varied the decision of the Repatriation Commission dated 27 November 1996 assessing the pension payable to the applicant at 50 per cent of the General Rate by adding the words “and at the Special (Totally and Permanently Incapacitated) Rate with effect on and from 8 July 1997; and

•                 set aside the decision of the Veterans’ Review Board dated 21 July 1999 and substituted therefor its decision that the decision of the Repatriation Commission dated 5 February 1999 made pursuant to s 31(6) of the Veterans’ Entitlements Act 1986 was ultra vires.

24                  I order that the matter be remitted to the Administrative Appeals Tribunal for determination in accordance with law.

25                  The Commission has not sought any order for costs.  There should be no such order.  There will be liberty to apply.

Associate:

Dated:              16 November 2001