FEDERAL COURT OF AUSTRALIA

Hill v Repatriation Commission [2004] FCA 832

ADMINISTRATIVE LAW – Appeal from administrative authorities – Administrative Appeals Tribunal – Decision under Veterans’ Entitlements Act 1986 (Cth) – ‘incapacity for work’ – ‘work’ – Partial or total incapacity – Whether Tribunal recognised distinction between capacity to work and routine activities – Whether any residual capacity for work was an ‘odd lot’

ADMINISTRATIVE LAW – Appeal from administrative authorities – Administrative Appeals Tribunal – Obligation to give reasons for decision pursuant to s 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) – Consideration of content of obligation – Whether Tribunal’s reasons sufficiently expose Tribunal’s process of reasoning

Administrative Appeals Tribunal Act 1975 (Cth) s 43(2B)

Veterans’ Entitlements Act 1986 (Cth) ss 37, 37AA, 120

Veterans’ Entitlements (Income Support Supplement – Permanent Incapacity for Work) Determination 1999

Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500 cited

Asioty v Canberra Abattoir Pty Ltd (1989) 167 CLR 533 cited

Australian National Railways Commission v Collector of Customs (SA) (1985) 69 ALR 367 cited

Australian Postal Corporation v Lucas (1991) 33 FCR 101 cited

Ball v William Hunt & Sons Ltd  [1912] AC 496 cited

Bavcevic v The Commonwealth (1957) 98 CLR 296 cited

Cardiff Corporation v Hall [1911] 1 KB 1009 cited

Collector of Customs (Tas) v Flinders Island Community Association (1985) 7 FCR 207 cited

Comcare Australia v Lees (1997) 151 ALR 647 cited

Commonwealth v Borg (1991) 20 AAR 299 applied

Davis v Comcare Australia [2004] FCA 182 cited

Dornan v Riordan (1990) 95 ALR 451 cited

Fletcher v Douglas [1934] WCR 88 cited

Foster v Wharncliffe Woodmore Colliery Co Pty Ltd [1922] 2 KB 701 cited

Fry v Repatriation Commission (1997) 47 ALD 776 cited

Hamiltons Ewell Vineyards Pty Ltd v Holmes (1985) 38 SASR 153 cited

Hawkins v Comcare (2001) 115 FCR 127 cited

Hope v Bathurst City Council (1980) 144 CLR 1 cited

Minister for Immigration & Multicultural Affairs v Yusuf (2001) 75 ALJR 1105 cited

Preston v Secretary, Department of Family and Community Services [2004] FCA 300 cited

Repatriation Commission v Hendy [2002] FCAFC 424 cited

Ruiz v Canberra Rex Hotel Pty Ltd (1974) 5 ACTR 1 cited

Schulz v B.H.P. Co Ltd [1934] WCR 389 cited

Thompson v Armstrong & Royse Pty Ltd (1950) 81 CLR 585 cited

Tok Carpentry and Partitioning Pty Ltd v Watts (1993) 113 FLR 368 cited

Vetter v Lake Macquarie City Council (2001) 202 CLR 439 cited

Wemyss Coal Co Ltd v Walker (1929) 22 BWCC 366 cited

Wicks v Union Steamship Co of New Zealand (1933) 50 CLR 328 cited

Woden Valley Glass v Psaila  (1993) 44 FCR 140 cited

COLIN DENNIS HILL v REPATRIATION COMMISSION

D 2 OF 2004

MANSFIELD J

1 JULY 2004

DARWIN

ON APPEAL FROM A DECISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL

THE COURT ORDERS THAT:

1.      The appeal is allowed.

2.      The decision of the Administrative Appeals Tribunal of 7 November 2003 be set aside.

3.      The application for review of the decision of the respondent, rejecting the applicant’s claim for service pension under the Veterans’ Entitlements Act 1986 (Cth) be remitted to the Administrative Appeals Tribunal for reconsideration according to law.

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

ON APPEAL FROM A DECISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL

REASONS FOR JUDGMENT

Introduction

1                     This is an appeal pursuant to s 44(3) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) from a decision of the Administrative Appeals Tribunal (the Tribunal) given on 7 November 2003.  By direction of the Chief Justice, it is to be heard by a single judge.  The Tribunal’s decision concerned an application for review of a decision of a review officer of the respondent, given on 28 March 2002, which affirmed a decision of a delegate of the respondent given on 4 July 2001.  Those decisions rejected the applicant’s claim to be entitled to an invalidity service pension under s 37 of the Veterans’ Entitlements Act 1986 (Cth) (the Veterans’ Entitlements Act). 

2                     On 25 May 2000, the applicant lodged a claim for an invalidity service pension under s 37 of the Veterans’ Entitlements Act.  Section 37(1) of that Act provides:

‘(1)      … a person is eligible for an invalidity service pension if the person:

(a)              is a veteran; and

(b)              has rendered qualifying service; and

(c)              is permanently incapacitated for work in accordance with a determination under section 37AA.’

3                     Section 37AA of the Veterans’ Entitlements Act provides:

‘(1)      The Commission must, by written determination, specify the circumstances in which persons are permanently incapacitated for work for the purposes of paragraph 37(1)(c).

…

(3)       A determination under this section is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.’

4                     The Repatriation Commission has made such a determination – the Veterans’ Entitlements (Income Support Supplement – Permanent Incapacity for Work) Determination 1999 (Determination 1999).  Section 5 of Determination 1999 provides:

‘5         Circumstances of permanent incapacity

(1)              A person is permanently incapacitated for work for paragraph 37(1)(c) of the Act if the person:

(a)               is permanently blind in both eyes; or

(b)               is a veteran to whom section 24 of the Act applies; or

(c)               satisfies subsection (2).

(2)              A person satisfies this subsection if:

(a)               the person has an impairment that, if it were an injury or disease for the Guide to the Assessment of Rates of Veterans’ Pensions, would result in a combined impairment rating of 40 or more under Table 18.1 in that Guide; and

(b)               solely because of the impairment, the person is permanently unable to do work for periods adding up to more than 8 hours per week; and

(c)               the Commission is satisfied that the impairment is permanent.’  

5                     The applicant was born on 17 March 1945.  He served in the Australian Army from 30 June 1965 to 30 June 1968.  He had operational service in Vietnam from 6 June 1967 to 16 April 1968.  This period of service is ‘qualifying service’ under the Veterans’ Entitlements Act.  His application for an invalidity service pension failed because the decision-makers were not satisfied that he is permanently incapacitated for work in accordance with Determination 1999.

6                     Before the Tribunal, it was not in dispute that the applicant suffers from permanent psychiatric illnesses, including significant vulnerability in his personality, alcohol dependency, a pathological gambling addiction, major depression, a dysthymic disorder and mild post traumatic stress disorder. 

7                     Underlying the Tribunal’s reasons are the following steps.  By reason of having rendered operational services, s 120(1) and (3) apply.  That is, the Tribunal was required to determine that the applicant’s condition was war-caused unless it was satisfied beyond reasonable doubt that there is no sufficient reason for making that determination.  Section 120(3) provides the circumstances in which the Tribunal might have been so satisfied.  The absence of express consideration of those provisions indicates the Tribunal did determine that the applicant’s condition was war caused.  Whether the condition be identified as a disease or as an injury, under s 13 the condition was one which entitled the applicant to benefits under the Veteran’s Entitlements Act.

8                     The proceeding before the Tribunal concerned whether the applicant was entitled to an invalidity service pension under s 37 of the Veterans’ Entitlements Act.  The requirements of s 37(1)(a) and (b) were clearly met.  The Tribunal’s decision focused upon the requirements of s 37(1)(c) and s 37AA.  It directed attention to Determination 1999.  The real issue before the Tribunal was whether, in the light of those permanent conditions, the applicant came within condition 5(2)(b) of Determination 1999.  He did not fall within conditions 5(1)(a) or (b).  He therefore had to satisfy the cumulative requirements of condition 5(2).

9                     After leaving the Army in 1968, the applicant worked for the State Electricity Commission of Victoria in country Victoria for some 21 years.  Symptoms and signs of his alcohol dependency and gambling addiction were apparent from the early stages of that employment.  The applicant’s wife is a qualified nurse, and has worked over the years, in between having children, to give the family financial stability.

10                  In 1994, the family moved to Darwin.  The applicant obtained work as a gardener, and then as a counsellor for the Salvation Army.  His wife was employed full-time at the Darwin Hospital.  The applicant’s problems persisted.  In late 1995, the family returned to Victoria.  The applicant obtained work as the Chief Executive Officer of a retirement village.  Again, his wife worked as a nurse at a base hospital.  The applicant’s ongoing problems led to his resignation in early 2000.  His wife then was the sole earner and was in charge of the family finances.  The family had virtually no savings due to the applicant’s addictions.

11                  In mid 2000, the family returned to Darwin.  The Tribunal found their circumstances since then to be as follows:

‘In August 2000, the Applicant and his wife obtained work as carers for aboriginal school children under a scheme run by a Christian schools group.  They were provided with a large house (six bedrooms) in a Darwin suburb, plus a mini-bus to transport the children to and from school.  They care for about ten children who are aged between 12 to 14 years.  They are paid a total of $30,000 per annum.  For the first six months they were paid $15,000 each.  After January 2001 they arranged for the whole of the $30,000 to be paid to the Applicant’s wife because of the Applicant’s inability to handle money.  She gives him some “pocket money” from time to time, amounting to about $50 per week.

The Applicant’s wife does most of the work, including cooking, washing, cleaning and shopping.  The Applicant drives the children to and from school and to sporting fixtures.  He also mops the floor now and again and he mows the lawns.  He sometimes assists in serving the food.  He sometimes accompanies the children to the shopping centre.’

The Tribunal found further that the applicant’s medication for depression makes him listless.  He has lost interest in life.  He is acutely embarrassed about his behaviour.  He has lost self-esteem and confidence.

12                  There were two psychiatric reports before the Tribunal, that of Dr Parker, who saw the applicant in December 2002, and that of Dr Knox, who saw the applicant in October 2000. 

13                  The Tribunal noted that Dr Knox in October 2000 considered that, although the applicant had been working 40 hours a week, he would not be able to continue at that rate and he ‘would be most unlikely to be capable of working more than eight hours a week.’  Dr Knox attributed that view to the applicant’s poor self-confidence, memory disturbance, absence of job skills or qualifications, the risk of reverting to drinking and gambling addictions, and depression.

14                  Dr Parker as at December 2002 reported that the applicant considered he could no longer work due to his lack of confidence and poor concentration.  The Tribunal noted Dr Parker’s views were:

‘In appearance, Mr Hill presented as a middle aged man who was appropriately dressed and groomed.  With his behaviour, he appeared passive in his attitude with little emotional response.  His speech was normal in rate and volume.  Mr Hill appeared depressed in his mood.  His affect was congruent with his mood and he generally displayed a restricted range and reactivity of affect.  Mr Hill did not display any disorder of his thought form.  He did not appear delusional in his thought content.  Mr Hill denied experiencing perceptual abnormalities and did not appear preoccupied by these phenomena during the interview.  Mr Hill’s cognition was formally tested with the Mini Mental State Examination and he scored 29 out of 30 on this test with a minor deficit in short term memory.  Further formal testing of Mr Hill’s brain frontal lobe function revealed no deficits.  Mr Hill only appeared to have limited insight and judgement into his current predicament. 

Mrs Hill described daily conflict with her husband as a result of the pervasive irritability associated with his condition.  Mr Hill commented that the only social interaction he had with others was with his daughters or his local church congregation.  Mrs Hill added that her pastor had been very supportive to her in the current context.  Mrs Hill also noted that her husband had withdrawn from activities that he used to enjoy such as tennis matches with family members. 

I consider that Mr Hill’s condition is permanent and is unlikely to resolve in the short term.  I did not issue a certificate to Mr Hill at the time of his assessment but, if I had issued this, it would have reflected that he is permanently disabled and is unlikely to work at his full capacity again.’

The Tribunal accepted that the applicant suffers from depression, lacks self-esteem and is unlikely to be able to work at full capacity again.  The Tribunal, however, noted that ‘Dr Parker’s mental state examination revealed that there is really very little wrong with the Applicant.’  It also noted that he had held a number of quite well paid positions over the last 30 years.

15                  The Tribunal then concluded:

‘The fact that the Applicant drives the school bus, does the mowing, mops the floor now and again, takes the children to the shops and helps with serving meals, indicates that he can at least work for a few hours per day.  The Tribunal finds that the Applicant is capable of working more than eight hours per week.  He does not qualify for the service pension.’ 

AppLICANT’s Contentions

16                  This appeal can only succeed if it can be demonstrated that the Tribunal made an error of law.  On 8 January 2004, the applicant filed a Notice of Appeal from the Tribunal’s decision.  In particular, the applicant contended that the Tribunal:

·                    was wrong in law in failing to provide adequate and sufficient reasons for its determination;

·                    was wrong in law in its application and interpretation of ss 37, 37AA and Determination 1999 of the Veterans’ Entitlements Act; and

·                    was wrong in law in failing to provide procedural fairness to the applicant by giving an indication that it had heard sufficient evidence and therefore prevented the applicant from providing further evidence to support the claim.

17                  At the hearing of the application, the third of those grounds was not pursued.

Consideration

(a)        The adequacy of the reasons

18                  Section 43(2B) of the AAT Act provides:

‘(2B) Where the Tribunal gives in writing the reasons for its decision, those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.’

19                  Lander J in Davis v Comcare Australia [2004] FCA 182 at [82] noted that ‘[t]here is no doubt that the AAT [is] under an obligation to give adequate reasons’, in accordance with s 43(2B) of the AAT Act.  Further, the Tribunal has an obligation to do so according to law: Commonwealth v Borg (1991) 20 AAR 299 at 308. 

20                  In Dornan v Riordan (1990) 95 ALR 451, the Full Court (Sweeney, Davies and Burchett JJ) held that a substantial failure to state reasons for a decision, in the circumstance where a statement of reasons is a requirement of the exercise of the decision-making power, constitutes an error of law.  This principle was followed in Comcare Australia v Lees (1997) 151 ALR 647 at 656 and in Preston v Secretary, Department of Family and Community Services [2004] FCA 300 at [21].

21                  In Comcare Australia v Lees at 656, Finkelstein J commented on the importance of the obligation on a tribunal (in that case also the Tribunal) to give reasons for its decision:

‘It ensures that the person whose interests may be adversely affected by a decision is told why the decision has been made: Re Poyser and Mills’ Arbitration [1964] 2 QB 467 at 478. It enables the public to have confidence that the tribunal has gone about its task appropriately and fairly: Commonwealth v Pharmacy Guild of Australia (1989) 91 ALR 65 at 88.  It allows a party who is dissatisfied with a decision to determine whether there has been some reviewable error made by the tribunal: Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500 at 507.  It imposes an intellectual discipline on the tribunal making it more likely that its decisions will not be arbitrary or capricious.  Finally, the giving of reasons furthers judicial and quasi-judicial accountability: see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 279.’

22                  His Honour also noted that although perfection is not required, the reasons should be expressed in ‘clear language so that they are capable of being understood’:  Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500. 

23                  Finkelstein J in Comcare Australia v Lees at 660 and Lander J in Davis v Comcare Australia at [83], when deciding whether reasons of a tribunal were adequate, adopted the approach of Jenkinson J in Commonwealth v Borg at 308-309:

‘The written reasons of the Tribunal for its decision afford a narrative account of the relevant events and the substance of some of the medical opinion evidence before the Tribunal.  The narrative is so expressed as to expose the conflicting expert opinions on the questions which the Tribunal considered critical to the determination of the review.  The reasons do not explicitly state those questions as those which the Tribunal considered to be critical, but the expression of the Tribunal’s conclusions, considered in the light of the proceeding narrative, enabled the questions to be identified with confidence.  The only criticism which might be made of the document is that it does not explicitly indicate reasons for preferring one expert witness to another.  Those reasons can be inferred from the whole content of the document.’

24                  The approach so explained is consistent, in my view, with that taken by the High Court in Minister for Immigration & Multicultural Affairs v Yusuf (2001) 75 ALJR 1105 at [67] – [68].  In Hawkins v Comcare (2001) 115 FCR 127 at [159], von Doussa J said that the obligation upon the Refugee Review Tribunal under s 430 of the Migration Act 1958 (Cth) is similar to that imposed upon the Tribunal by s 43(2B) of the AAT Act.  In Repatriation Commission v Hendy [2002] FCAFC 424, Whitlam, Emmett and Stone JJ said at [39]:

‘Finally, with regard to his Honour’s alternative finding that the Tribunal failed to give adequate reasons for reaching the conclusions it did, s 43(2B) of the AAT Act requires that, where the Tribunal gives in writing the reasons for its decision, those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.  However, this is not a requirement that the reasons provide an unarguable logical progression to a conclusion.  It will, in almost every case, be that alternative conclusions are possible based on the evidence and other material to which reasons refer.  The fact that the Tribunal may come to a conclusion contrary to that which the Court or a Tribunal differently constituted might come is not a reviewable error, so long as the reasons include the factors set out in s 43(2B) of the AAT Act.’

See also Australian Postal Corporation v Lucas (1991) 33 FCR 101; Fry v Repatriation Commission (1997) 47 ALD 776.

25                  The Tribunal’s reasons identify the question to be determined.  The Tribunal has set out the main points of the evidence of the applicant and of his wife.  It has referred to the essence of the two psychiatrists’ reports.

26                  The Tribunal did not refer to the report of Dr MacDonald.  It is understandable that it did not do so.  Dr MacDonald’s report, apart from confirming the applicant’s medical history and his medication, is based upon the psychiatrists’ reports.  It concludes:

‘In my opinion, the psychiatrists are indicating that Mr Hill is unable to work and his condition is that is [sic] causing his inability to work [and, sic] is related to his war service.  As such he is totally and permanently disabled.’

The report does not provide any additional medical history, apart from the observation that the applicant’s wife ‘directs him to do household taks [sic] but he appears dependent on her for direction’.  It is unclear whether the report followed a recent consultation, or was based on records up to the time of the last specified consultation on 15 February 2002.  I do not consider the fact that the Tribunal did not expressly refer to that evidence as involving any failure to comply with s 43(2B).  It was not of such cogency or weight as to require its express consideration.  It was not an independent medical opinion requiring the Tribunal’s attention, but one paraphrasing the medical opinions to which the Tribunal did refer.

27                  The Tribunal’s reasons are brief.  However, in my judgment, they sufficiently expose the Tribunal’s process of reasoning. 

28                  The requirement of s 43(2B) of the AAT Act is that the Tribunal’s process of reasoning be adequately exposed to indicate how the Tribunal has gone about its task, and why it has reached its conclusion.  It is a corollary of the requirement that the Tribunal will adopt sound and proper legal reasoning.  But s 43(2B) does not oblige the Tribunal to correctly identify and apply the law.  It aims to expose whether the law has been correctly identified and applied.  It does not require the Tribunal to take into account all relevant considerations and to eschew all irrelevant considerations.  It aims to expose whether relevant considerations have been taken into account, and whether irrelevant considerations have been eschewed.  It does not require the Tribunal to have acted upon evidence before it.  It aims to expose whether it has done so.  It is the capacity to understand the process of the Tribunal’s reasoning which is what s 43(2B) demands, not the correctness of its process of reasoning.  The reasons, once the process of reasoning is exposed, may reveal legal error on the part of the Tribunal so as to enliven the power of the court to set aside its decision:  s 44 of the AAT Act.

29                  The Tribunal has explained what it has taken from the two psychiatrists’ reports:  the applicant is depressed and lacks self-confidence, so he is unlikely to work to his full capacity again but (according to Dr Parker – as the Tribunal understood his report) his mental state examination reveals ‘really very little wrong’ with the applicant.  It did not suggest that the medical evidence should not be accepted.  It looked to his work history, and concluded he has job skills and qualifications.  It looked to his current activities.  It did not suggest the evidence of the applicant or of his wife should not be accepted.  The concluding passage in its reasons, set out at [15] above, shows how it drew from those activities the conclusion that the applicant is capable of working more than eight hours per week.

(b) The alleged error of law

30                  In my judgment, the Tribunal’s reasons satisfy the requirement of s 43(2B) of the AAT Act.

31                  Once the process of reasoning is understood, it provides a foundation for considering whether the Tribunal erred in law in its consideration of the applicant’s claim.  Counsel for the applicant contended that the Tribunal:

(1)        wrongly imposed an onus of proof upon the applicant;

(2)        misunderstood, or misapplied, the meaning of the expression ‘permanent inability to do work’ in s 5(2)(b) of Determination 1999, which informs the question whether the applicant is permanently incapacitated for work under s 37(1)(c) of the Veterans’ Entitlements Act.

The second of those contentions itself had two aspects.  The first is the simple proposition that the Tribunal misunderstood the meaning of ‘work’ by failing to adopt a construction which involved working in meaningful employment as distinct from some activity undertaken intermittently and at the applicant’s own pace and at the applicant’s own whim.  The more complex proposition is that the Tribunal erred in law in concluding that, upon the evidence before it, the applicant was capable of working more than eight hours per week as the evidence does not reasonably admit of that conclusion:  Collector of Customs (Tas) v Flinders Island Community Association (1985) 7 FCR 205; Australian National Railways Commission v Collector of Customs (SA) (1985) 69 ALR 367; Vetter v Lake Macquarie City Council (2001) 202 CLR 439; Hope v Bathurst City Council (1980) 144 CLR 1.

32                  To address those contentions, it is convenient first to refer in some detail to the uncontradicted, and unchallenged, evidence before the Tribunal.  The Tribunal’s reasons do not suggest that it had any doubt as to the accuracy of the evidence, including the psychiatric evidence.  If it did have any reason to reject, or not to accept, certain evidence then its reasons would have identified that part of the evidence it accepted and why it accepted that particular evidence.  The absence of any such suggestion in the Tribunal’s reasons leads to the inference that the Tribunal did not reject any of the evidence, and indeed the use of the evidence as set out in [13] – [14] above indicates that it did not reject any of the evidence:  see e.g. per Gleeson CJ in Yusuf at [35].

33                  The two psychiatrists’ reports did receive the Tribunal’s consideration. It noted Dr Knox as saying the applicant, from a combination of symptoms, would be most unlikely to be capable of working for more than eight hours per week.  That view was expressed in October 2000, when the applicant was working 40 hours per week.  Dr Knox diagnosed the applicant as having long term dysthymic disorder, a form of depression, fuelling his symptoms.  Even at October 2000, Dr Knox noted:

‘While Mr Hill is employed, along with his wife, as a houseparent in a home for Aboriginal boys, his wife says that he does very little about the house, and is only able to work at a low level under her direction.  I do not think that he would be able to find work in the open market.  Thus, while he works 40 hours per week currently, I think that were he not able to continue in his present work he would be most unlikely to be capable of working more than eight hours per week.  His self-confidence is very poor.  He reports memory disturbance.

Effectively Mr Hill has no job skills or qualifications likely to enable him to find employment at this time.’ 

34                  The prognosis of a dramatically reduced work capacity was confirmed by the history of the applicant’s working efforts since 2000.  The Tribunal appears to have accepted that evidence.  The respondent did not suggest the Tribunal had rejected the evidence of the applicant and his wife.  Its conclusion is based upon what they told the Tribunal.

35                  Significantly, the passages quoted by the Tribunal from Dr Parker’s report are incomplete.  They are set out in [14] above.  The first paragraph quoted is the text under the heading ‘Mental State Examination’.  The second paragraph precedes that text, and is the second of two paragraphs under the heading ‘Disability from his Symptoms’.  It is preceded by this paragraph:

‘Mr Hill described a pervasive sense of distress as a result of his persistent anxious arousal and frequent flash backs.  Mrs Hill noted that she can tell when her husband is affected by the flashbacks because he becomes quiet and withdrawn.  Mrs Hill also noted that her husband had become increasingly dependent on her for daily activities.  Because of problems related to his gambling, she controls the finances in the family.  Mr Hill commented that he cannot work any more due to his lack of confidence and poor concentration.’ 

36                  The third paragraph is from the final substantive paragraph of Dr Parker’s report, under the heading ‘Diagnostic Assessment’.  There are paragraphs under that heading dealing with the diagnosis and aetiology (including the observation that the applicant’s condition had intensified since he saw Dr Knox), and the need for ongoing treatment.  The quoted paragraph concludes with the following (omitted from the Tribunal’s quotation of Dr Parker’s views):

‘Given his current level of disability, I consider that Mr Hill should be considered totally and permanently disabled as a result of his condition.’

37                  To appreciate how the Tribunal reached its conclusions, it is also necessary to refer to the evidence of the applicant and his wife.

38                  The applicant’s statement of 21 February 2003 referred to the arrangements from January 2001 whereby the contract payment went directly to the applicant’s wife ‘as a result of my inability to handle money at all’.  He said he ‘regularly’ takes the children to and from school and does the mopping, ‘say once per week’, but in cross-examination he said he collected the children from school ‘very rarely’, as he does very little in the afternoons, although he could do so in an emergency.  He is able to mow the lawns.  He helps his wife manage the children ‘from time to time’, although she does the washing, cooking and general chores as a rule.  She also counsels and disciplines the children.  He said his contribution to the care of the children is minor compared to that of his wife, and ‘I can choose not to do anything at all if I am particularly down, as happens from time to time’.  He said he could not do his job without his wife, and could not hold down any other job.

39                  The applicant’s oral evidence to the Tribunal generally confirmed that picture.  He said he ‘sometimes’ takes the children to school or collects them.  Some days he does not, as he simply does not get up in time.  When he does so, the round trip takes about 30 minutes.  He mops the floors perhaps once a week.  He mows the lawns.  Occasionally he helps prepare a meal, such as by peeling potatoes.  He said he could not work elsewhere, because he cannot complete even simple things such as mopping a floor without a break.  His cross-examination confirmed that he requested at the end of 2000 that further contract payments be to his wife only.  There were two reasons.  The first was that despite the apparent tax benefits of splitting the income, even though the applicant would not really work, the benefits were not as much as expected.  The second was that it was better if the applicant did not handle or have access to the finances.  The applicant felt he had ‘no argument … to say it is my money’.  He explained that to mop the floor, which should take an hour, takes all morning because he stops and starts.  He does not work continuously for a period of one hour at a time.  Over a full morning’s work, he would work a total of up to one hour.  In answer to questions from the Tribunal, he said he could not work for long because ‘I can’t even concentrate long enough to actually mop the floor without sitting or having breaks’.

40                  The applicant’s wife confirmed that picture.  Her written statement said the applicant often drove the children to and from school and to sport, that he mopped the floor about once a week, and that he mows the lawns.  He also sometimes helps with serving meals.  She described the applicant as ‘often vague’ but he is not drinking alcohol or gambling ‘only as he is under my control 24 hours per day’.  If the applicant does not feel like doing anything, he simply does not do it.

41                  In her oral evidence, she said the applicant only drives the children to school when he wants to, so if he sleeps in then she must do so.  She cannot pre-arrange for him to do so.  She described the applicant as having no self-esteem, as being very depressed, and being unable to work.  He does only two per cent of the work, and the house would operate well without his contribution.

42                  The applicant’s wife was recalled following submissions to the Tribunal, to expand upon her evidence about the applicant’s capacity to work.  She said:

‘For a start no-one would employ him.  He is 58 years old, he is depressed, he is withdrawn and that is what happens, like he goes into this withdrawal state.  I don’t know really this is awful, but you can’t trust him … I can’t [let him out of the house or out of my sight]’.

She said he is unemployable.

43                  I do not accept that the Tribunal wrongly imposed on the applicant an onus of proof.  It did not discuss the onus of proof.  Its reasons do not suggest it imposed any onus of proof upon the applicant.

44                  The purpose of the Veterans’ Entitlement Act is plain enough.  It is to provide for the payment of pensions and other benefits to veterans.  It should be construed liberally, as it falls within what is sometimes called beneficial legislation:  Repatriation Commission v Hayes (1982) 43 ALR 216 at 219; Starcevich v Repatriation Commission (1987) 76 ALR 449 at 454; Repatriation Commission v Hawkins  (1993) 30 ALD 51 at 56, and Tracy v Repatriation Commission (2000) 61 ALD 361 at 368.

45                  Moreover, the purpose of the Veterans’ Entitlements Act is, in the circumstances to which it applies, to the same general effect as the compensatory provisions of that of the Safety, Rehabilitation and Compensation Act 1988 (Cth) and of the worker’s compensation enactments of the various States and Territories.  It is not necessary to refer to them explicitly.  Those enactments, and their predecessors, take their source from the Workmen’s Compensation Act 1906 (UK).  A common thread through those enactments has been the entitlement to compensation for ‘incapacity for work’ as a result of work related injury or disease.  In certain of those enactments, provision was made in certain circumstances for the entitlement to compensation based upon total incapacity for work where the incapacity for work was partial only.  There have been a range of legislative devices to determine when that should be the case.  Sections 37 and 37AA do not adopt any of those devices.  They deal in a different way with the identification of circumstances in which an entitlement to an invalidity service pension exists.  The rate of an invalidity service pension is worked out in accordance with the Rate Calculator:  s 37N and Pt IIIB. 

46                  In my view, there is no reason why, given the legislative genealogy of provisions such as s 37 of the Veterans’ Entitlements Act, the words ‘permanently incapacitated for work’ used in ss 37(1)(c), 37AA and in s 5 of Determination 1999 and the words ‘permanently unable to do work’ for a certain period or periods in s 5(2)(b) of Determination 1999 should not be given the meaning which they have traditionally been given in similar legislation.

47                  In context, moreover, in my view the words in s 5(2)(b) should be given that meaning.  The context is the provision of an invalidity service pension where there is an ‘incapacity for work’ of a certain character.  The pension is intended to be provided where the veteran is unable to work in employment.  It would not be consistent with the purposes of the Veterans’ Entitlements Act, and Pt III Div 4 in particular, that the word ‘work’ in Determination 1999 should refer to non-employment activity.  Short of being bedridden, a person may be able to attend to daily personal or domestic chores which involve activity of a few hours a day or more than eight hours a week.  The capacity to engage in such activity does not necessarily equate with the capacity to engage in meaningful employment for such periods.  There is no reason to think that the word ‘work’ is used in Determination 1999 in any way differently from its use in ss 37(1) and 37AA(1).  The contrary is the case.  Determination 1999 is a disallowable instrument for the purposes of s 46A of the Acts Interpretation Act 1901 (Cth):  s 37AA(3) of the Veterans’ Entitlements Act.  It is intended to specify the circumstances in which persons are permanently incapacitated for work for the purposes of s 37(1)(c).  Its adoption of the concept of ‘work’ suggests, to the contrary, that the word has been chosen to tie in with, rather than differentiate from, the expression ‘incapacity for work’ in s 37(1)(c).  Had some different factual qualification been intended, the drafter of the instrument would have selected a different word.

48                  The expression ‘incapacity for work’ means incapacity to earn wages:  Thompson v Armstrong & Royse Pty Ltd (1950) 81 CLR 585 per Latham CJ at 595, per McTiernan J at 602, per Williams J at 608, per Webb J at 615, and per Kitto J at 623.  It is the physical inability to provide labour in the open labour market.  See also Ball v William Hunt & Sons Ltd [1912] AC 496 at 499 – 500.

49                  It is also plain that whether a person has a residual capacity to work is determined by reference to labour markets reasonably available to that person:  Ruiz v Canberra Rex Hotel Pty Ltd (1974) 5 ACTR 1; Asioty v Canberra Abattoir Pty Ltd (1989) 167 CLR 533; Tok Carpentry and Partitioning Pty Ltd v Watts (1993) 113 FLR 368; Woden Valley Glass v Psaila (1993) 44 FCR 140.

50                  Hence, there are cases where the residual capacity to work of a particular claimant for compensation has been treated as so confined that, in reality, there is total incapacity for work.  In Foster v Wharncliffe Woodmore Colliery Co Pty Ltd [1922] 2 KB 701, Lord Sterndale MR at 709 referred with approval to the observations of Fletcher Moulton LJ in Cardiff Corporation v Hall [1911] 1 KB 1009 at 1020 where his Lordship said:

‘… if in other words the capacities for work left to [a worker] fit him only for special uses and do not, so to speak, make his powers of labour a merchantable article in some of the well-known lines of the labour market, I think it is incumbent on the employer to show that such special employment can in fact be obtained by him …  I should say that if the accident leaves the workman’s labour in the position of an ‘odd lot’ in the labour market, the employer must show that a customer can be found who will take it.’

In that case Scrutton LJ at 715 explained that the term ‘odd lot’ relates to the work capacity of a person who is so impaired that the person is ‘only able to do certain very special jobs, depending on finding a very special employer who, either through compassion or because he has a special job, is able to give him employment, but any ordinary class of work he is not able to do …’.

51                  Illustrations of cases where a very substantially impaired person has been regarded as having no real residual capacity to work, although not medically described as totally incapacitated for work, are provided by Wemyss Coal Co Ltd v Walker (1929) 22 BWCC 366; Fletcher v Douglas [1934] WCR 88 and Schulz v B.H.P. Co Ltd [1934] WCR 389.  In Wicks v Union Steamship Co of New Zealand (1933) 50 CLR 328, the High Court (Gavan Duffy CJ, Rich, Starke, Dixon, Evatt and McTiernan JJ) remitted a determination for reconsideration because the decision-maker had not clearly addressed whether the worker was:

‘… physically incapacitated from ever earning by work any part of his livelihood.  This condition [their Honours said] is satisfied when capacity for earning has gone except for the chance of obtaining special employment of an unusual kind.’  (at 338)

See also Bavcevic v The Commonwealth (1957) 98 CLR 296 at 303-304, Hamiltons Ewell Vineyards Pty Ltd v Holmes (1985) 38 SASR 153 and Anderson v Australian Postal Commission (1981) 39 ALR 94 at 100-101. 

52                  In this matter, I do not consider the Tribunal did recognise the distinction between doing ‘work’ or the capacity to do work on the one hand, and doing some day to day activities of routine existence.  The particular circumstances of the applicant may have diverted its attention from that distinction.  But, in my view, it was one it was required to address. 

53                  The evidence (none of which it appears to have rejected) indicates that the applicant does certain tasks intermittently and at his own election and in his own time, which (when performed) may assist his wife in providing services to the children who she looks after.  But he does not do so in any organised or structured or reliable way.  He is not remunerated for what he does; he receives weekly pocket money irrespective of how much or how little he does.  His contribution is not one upon which his wife relies, but rather (it seems from her evidence) is one which she accommodates.  The medical evidence categorises the applicant as unable to work notwithstanding what he does.  Had the Tribunal addressed the question it was required to address, it would have considered whether he is in fact permanently unable to do work in the sense I have referred to for periods adding up to more than 8 hours per week.  It might have decided that he has no residual capacity to work at all.  It might have decided that his residual capacity for work is so small that he is only able to undertake special employment which he does not have available to him, so that his capacity to work is an odd lot which is in practical terms no capacity at all.  In that event it would have addressed whether what he does to assist his wife is really ‘work’ so that in fact he has special employment.  Or it might have decided that he has a residual capacity to work so that he is not permanently unable to do work for periods adding up to more than 8 hours per week. 

54                  In addition, on a rehearing, the Tribunal of course is also not bound to make the same findings of fact as have been presently made. However, for the reasons I have given, I do not think the Tribunal addressed those matters according to law.

55                  Accordingly, in my judgment, the Tribunal has erred in law.

56                  I reject the contention that the Tribunal’s decision discloses a decision of fact based upon the correct understanding of s 37 of the Act.  Of course, there is no error of law exposed simply by making a wrong decision of fact.  However, having regard to the evidence to which the Tribunal did not refer in any considered way as to the applicant’s activities and to the circumstances in which he carried them out, together with its failure to refer to the concluding sentence of the passage in the report of Dr Parker, my view is that it failed to recognise the way in which the word ‘work’ is used in the expression ‘incapacity for work’ in s 37 and in Determination 1999.

57                  Accordingly, I allow the appeal.  I set aside the decision of the Tribunal given on 7 November 2003.  I remit to the Tribunal the application of the applicant for review of the decision of the respondent rejecting his claim for service pension under the Veterans’ Entitlements Act for reconsideration according to law.

Associate:

Dated:              28 June 2004