FEDERAL COURT OF AUSTRALIA

Repatriation Commission v Graham [2004] FCA 1287

VETERANS – Special rate of pension – remunerative work that the veteran was undertaking – whether includes work undertaken many years before types of remunerative work – hypothetical comparison – what is to be compared – ‘Appeal’ from AAT – whether alleged errors are errors of fact or law

Administrative Appeals Tribunal Act 1975 (Cth)

Veterans’ Entitlements Act 1986 (Cth)

Graham v Repatriation Commission [2004] AATA 208

Leane v Repatriation Commission [2004] FCAFC 83

Flentjar v Repatriation Commission (1997) 48 ALD 1

Counsel v Repatriation Commission (2002) 122 FCR 476

Banovich v Repatriation Commission (1986) 69 ALR 395

Starcevich v Repatriation Commission (1987) 18 FCR 221

Repatriation Commission v Hendy [2002] FCAFC 424

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

Collector of Customs v Agfa-Gevaert Limited (1996) 186 CLR 389

Repatriation Commission v Alexander  (2003) 75 ALD 329

REPATRIATION COMMISSION v PETER GRAHAM

SAD 42 of 2004

SELWAY J

8 OCTOBER 2004

ADELAIDE

THE COURT ORDERS THAT:

The application is dismissed.

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

REASONS FOR JUDGMENT

1                     This is an ‘appeal’ from a decision of the Administrative Appeals Tribunal (‘AAT’).  Although described as an ‘appeal’ the proceedings are in original, rather than appellate jurisdiction.  This Court has jurisdiction to hear an ‘appeal’ from the AAT on a question of law pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (‘AAT Act’).  In this case the AAT had reviewed a decision of the Veterans’ Review Board.  The Board had determined that pursuant to the provisions of the Veterans’ Entitlements Act 1986 (Cth) (‘Entitlements Act’) the respondent was entitled to a pension at 100 per cent of the general rate, but was not entitled to the higher ‘special rate’.  The AAT, on the other hand, decided that the respondent was entitled to a pension payable at the ‘special rate’ (see Graham v Repatriation Commission [2004] AATA 208).  The applicant (‘the Commission’) says that the decision of the AAT involved an error of law or errors of law.  The Commission says that the decision of the AAT should be set aside and the matter remitted to the AAT for further hearing.  For the reasons given below the ‘appeal’ is dismissed.

2                     The statutory context to the issues arising in these proceedings was summarised in Leane v Repatriation Commission [2004] FCAFC 83 (Leane) at [7]-[8].  It is sufficient for present purposes to repeat that summary:

‘Section 19(1) of the Entitlements Act provides that, where a claim for a pension or an application for an increased pension is submitted to the Commission, the Commission must consider all matters that are, in the Commission’s opinion, relevant to the claim or application and determine the claim or application as provided by s 19(3).  Section 19(3) provides that the Commission must determine a claim or application:

·        by determining whether the claimant is entitled to be granted a pension in respect of incapacity of a veteran from war caused injury or war caused disease, or both; and

·        if the Commission determines that the claimant is so entitled, by proceeding as set out in ss 19(5A), (5B), (5C) and (5D).

Under s 19(5C), the Commission must assess the rate or rates at which the pension would have been payable from time to time during the assessment period and the rate at which the pension is payable.  Section 19(5D) then provides that, after making such an assessment, the Commission must determine that a pension is payable at the rate assessed.  Under s 19(9), ‘assessment period’ in relation to a claim or application relating to a pension means the period starting on the day when the claim or application is made and ending when the claim or application is determined.

3                     Section 24 of the Entitlements Act deals with the special rate of pension and relevantly provides as follows:

‘(1)      This section applies to a veteran if:

(aa)      the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and

(aab)    the veteran had not yet turned 65 when the claim or application was made; and

(a)        either:

(i)         the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or

(ii)        the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and

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

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

(d)       section 25 does not apply to the veteran.

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

(a)        a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if:

(i)         the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or

(ii)        the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; and

(b)        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.

            (4)       … the rate at which pension is payable to a veteran to whom this section applies is $571.70 per fortnight.’

4                     The dispute before the AAT between the Commission and the respondent was a limited one.  The parties were agreed that the respondent was suffering from various ‘war caused’ disabilities of post-traumatic stress disorder (PTSD), lumbar spondylosis and ischaemic heart disease.  It was also accepted that he suffered from pain in the thoracic spine due to compression fractures of vertebrae and from osteoarthritis of the right hip – both of which were not war caused.  It was accepted that he was at least entitled to a pension at a rate of 100 per cent by reason of his war caused injuries.  It was accepted that the incapacity from his war caused conditions was of such a nature as to render him incapable of undertaking remunerative work for periods aggregating more than eight hours a week.  There was no dispute that the respondent met all of the requirements of s 24(1) of the Entitlements Act for a ‘special rate’ pension save only for the requirements of s 24(1)(c).

5                     The AAT made the following findings of fact:

‘The applicant is aged 59, having been born on 5 February 1945.  He worked as a grader operator and ganger for the Carathool Shire Council from 1961 until he joined the Australian Army in 1967.  He served in Vietnam from April 1968 until April 1969, and he was later discharged from the Army.  He then returned to his former work until late in 1975, when he moved to Adelaide after his first marriage broke up.

The applicant obtained work in Adelaide with the City of Tea Tree Gully, initially as a grader operator.  He then went to work at the Tom Price mine in Western Australia, but after a short time he returned to the Tea Tree Gully Council to work.  He was promoted from a grader operator to a ganger, then to the position of construction supervisor and later still to the position of project planner.  In this last position he was in charge of the planning and implementation of construction work being undertaken by the engineering department of the council, that is road and drainage construction works.  He was also attending to call-outs arising from emergencies.

In 1995 he left the employment of the Tea Tree Gully Council.  Some time before this he had started feeling uneasy and anxious, had difficulty in concentrating on his work, and felt depressed.  He had remarried in 1985, and the feelings and difficulties which he experienced at work resulted in tension at home.  He and his wife felt they needed a change, and they decided to move to Queensland and to change to a more relaxed lifestyle.  In August 1995 they purchased a restaurant business which operated from leased premises in Tin Can Bay in Queensland.  In October 1995 they purchased freehold a property in Tin Can Bay comprising four holiday units and a substantial residence.  They operated the two businesses in partnership.  The units overlooked a bay and was in a growing area.  Two of the applicant’s step-daughters and their husbands also went to Tin Can Bay, and the family members between them ran the restaurant and the units.

After acquiring the units, the applicant repainted them to improve their presentation.  He also did all of the lawn mowing and maintenance of the units, and both he and his wife and family members managed and cleaned the units, took bookings for the units and for the restaurant, and also took orders from customers and waited on them.  The husband of one of the step-daughters did the cooking in the restaurant.

At first the applicant felt somewhat better than he had felt at the end of his time in Adelaide, but he gradually became unwell again.  After about the first 12 months in Tin Can Bay the applicant became aware that he was making many mistakes in taking telephone bookings from customers of the units as well as customers of the restaurant.  Mrs Graham and her daughters found they had to check and go back over what the applicant was doing; they found that he would forget to put towels and other supplies in rooms in readiness for incoming customers, and would repeat gardening tasks which he had done the day before.  More importantly, they found that he was making mistakes with bookings.  On occasions, due to the applicant’s mistakes, the units were double booked.  This was understandably very upsetting to customers.  They would have to be sent to another motel at Tin Can Bay, and Mr and Mrs Graham would then be obliged to pay for their alternative accommodation.  The applicant’s mistakes were due to his inability to concentrate.

When the applicant commenced his new work of managing the units and assisting with the restaurant, he got on well with people, but over time his relationship with customers became more and more difficult.  He reached the point where he would avoid customers.  He would not answer the telephone, and if a customer came into the front door of the units he would go out of the back door to avoid contact with the customer.  He was lacking in confidence and had feelings of anxiety.  He became suspicious and felt worthless.  The applicant’s mistakes in his work and problems with customers caused stress in his relationship with his wife, and affected the revenue and profitability of the business.  He had to withdraw altogether from assisting with the restaurant, and the amount of work he could do in relation to the units was reduced.

Late in 1997 Mr and Mrs Graham sold the restaurant business on a walk-in walk-out basis, but they continued to own and operate the holiday units.  The applicant said that they decided to sell the restaurant because of the problems being caused by his inability to cope with the work.  However, Mrs Graham was concerned that her daughters’ work in the restaurant meant that they could not go out with their friends and enjoy themselves at night, and she found that she had to go down to the restaurant quite often to assist.  I find that there were a number of reasons for selling the business, namely the applicant’s inability to assist in the running of it, Mrs Graham’s desire to free her daughters of their commitment to the restaurant to enable them to engage in the social life of Tin Can Bay, and the increased workload faced by Mrs Graham as a result of the applicant’s difficulties.

Early in 1998 the applicant consulted a local general practitioner, Dr Julie Conway of Gympie, Queensland.  It appears that by June 1998 Dr Conway made a provisional diagnosis that the applicant was suffering from PTSD (T5).  I will refer below to further information provided by Dr Conway.

In June 1998, the applicant claimed a disability pension in respect of symptoms of insomnia and PTSD, chest pains and low back pain (T5).  The Department of Veterans’ Affairs sought an assessment from Dr Brian Hutchinson, a psychiatrist, of Sunshine Coast Psychiatric Services, and he provided a report dated 17 August 1998 to the department (T7).  Dr Hutchinson concluded that the applicant had a clear case of post traumatic stress disorder, and that he was then depressed.  Dr Conway referred the applicant to another psychiatrist, Dr Burnett Kann of Cooroy, Queensland, and in reports dated 19 January 1999 and 30 May 1999 (T10) and 12 March 2002 (T12), Dr Kann confirmed the diagnosis of combat-related PTSD that was delayed in onset and chronic in nature.  Dr Kann prescribed medication.  The applicant said that initially this seemed to calm him down and helped his depression, but after about six months he started to become aggressive, both with neighbours and strangers, and also with his family.

In about October 1999 Mr and Mrs Graham returned to Adelaide because Mrs Graham needed medical treatment, and also in an endeavour to improve the applicant’s condition.  They put the units in the hands of a manager.  They returned to Tin Can Bay late in September 2000 after Mrs Graham had completed her medical treatment in Adelaide.  On their return, they resumed the management of the units.  The applicant said he continued on his downhill slide and this meant that his wife, family and friends were putting in increasing efforts to cover for him.  This added to the tension in his relationship with his wife.  Whilst his step-daughters by then had alternative employment, they still assisted whenever they could in running the business.  It became obvious that the applicant was not coping, and in about October 2001 Mr and Mrs Graham put the units on the market.  They were sold in October 2002.  They then returned to Adelaide permanently.  Whilst the applicant has felt better since his return to Adelaide as a result of changing his medication, he still has a number of problems, and has not worked since selling the units.’

6                     In relation to those facts the issue the AAT had to determine was whether:

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

7                     The AAT approached this task in the manner suggested by the Full Court in Flentjar v Repatriation Commission (1997) 48 ALD 1.  In that case Branson J at 4 identified four questions that arose under s 24(1)(c) of the Entitlements Act:

‘1.       What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the Act?

2.         Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?

3.         If the answer to question 2 is yes, is the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?

4.         If the answers to questions 2 and 3 are, in each case, yes, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his account that he would not be suffering if he were free of that incapacity?’

8                     In relation to the first question of what remunerative work that the veteran was undertaking the AAT found that the relevant work was:

‘(a)      working as a grader operator;

(b)       working as a ganger in charge of road construction gangs;

(c)       planning and arranging for the implementation of road and drainage construction works;

(d)       managing a restaurant business;

(e)       working as a waiter in a restaurant;

(f)        managing holiday units; and

(g)       working as an unskilled domestic gardener and handyman.

I am mindful that the applicant’s previous work in managing the holiday units also embraced carrying out gardening and maintenance activities.  However …, the determination required by s 24(1)(c) of the relevant remunerative work is not confined to any particular job, but rather entails an examination of the type of work which the veteran has previously undertaken.  I consider that the work of managing the holiday units would not necessarily also entail performing outside maintenance and gardening activities, and that these activities constituted a separate kind of work.’

9                     In these proceedings the Commission says that the AAT fell into legal error in making these findings.  In particular, the Commission says:

(a)                The Tribunal erred in law in treating all remunerative work ever undertaken by the respondent as being ‘remunerative work that the veteran was undertaking’; and

(b)               The Tribunal erred in dividing the task of ‘managing holiday units’ or ‘managing a restaurant business’ as being separate ‘remunerative work’ from tasks undertaken by the respondent as part of the management task, such as ‘domestic gardener and handyman’ or ‘working as a waiter’.

10                  Having identified the relevant categories of ‘remunerative work’ the next question the Tribunal addressed was whether the respondent was prevented from continuing to undertake those kinds of work by reason of his war caused injuries.  The AAT found that he was prevented from doing so.  What concerns the Commission has in regard to that finding are better considered in relation to the third question identified in Flentjar. 

11                  The third question was whether it was the war caused injury alone which prevented the respondent from undertaking the relevant remunerative work.  In that regard the Commission put before the AAT a report by Dr Conway.  In that report Dr Conway sought to assess whether the non war caused injuries would have had an effect upon the respondent’s capacity to undertake remunerative work.  The AAT dealt with Dr Conway’s evidence as follows:

‘On the face of it, Dr Conway’s assessment of the applicant’s capacity to work indicates that his back pain and hip arthritis were factors which prevented the applicant from continuing to undertake remunerative work (see paragraph 35 above).  However, where an expert witness expresses an opinion on the ultimate issue before a court or tribunal, it is important to ensure that the expert has correctly applied the relevant legal test in reaching his or her opinion (Wiegand v Comcare Australia (2002) 72 ALD 795 at paragraph 30) and also that the expert’s opinion is based on the correct factual material.  In the work test questionnaire, Dr Conway said that the applicant’s last occupation was “Project Planner Local Government” (T11, page 195).  This was, of course, incorrect.  Further over in the same assessment form, Dr Conway states that the applicant’s capacity for work was “Nil”, and she gave this answer in response to a question which directed her to consider “all types of work for which he may have the skills qualifications and/or experience”..  The form then required her to tick one of a number of boxes which gave a range starting with “Heavy/skilled” descending to “Light lesser skilled”, and included a final category “No work at all”.  There is therefore nothing on the form to indicate that Dr Conway considered each of the categories of work which the applicant had undertaken in the past, namely (on my findings) the categories of work set out in paragraph 23 above.

I also note that the next question which follows the question seeking the doctor’s opinion as to what type of work the applicant could undertake reads “What medical conditions prevent or restrict Peter Graham’s capacity to work” (emphasis added).  However, the test in s 24(1)(c) involves an examination of whether the veteran’s war-caused injury or disease alone prevents the veteran from continuing to undertake the relevant remunerative work, and not whether that injury or disease restricts the veteran from continuing to undertake that work.  It is, therefore, not clear that when Dr Conway answered the question appearing on the form and stated that the applicant’s pain and hip arthritis had some impact on his ability to work, she was expressing an opinion that those conditions were factors in preventing him from working, as opposed to restricting him from working.  If her comments related to the latter issue, they would not be relevant to a determination of the “alone” test in s 24(1)(c).

The extract from Mrs Graham’s handwritten statement dated 30 October 2001 refers to the applicant being “very restricted to doing things around the house”, and therefore on the face of it, her evidence indicates that his non war-caused injuries were factors which prevented him from undertaking the gardening and maintenance activities which the applicant had undertaken when the units were first purchased (see paragraph 31 above).  On the basis of this evidence and the opinion expressed by Dr Conway as to the relative significance of the two non war-caused injuries (see paragraph 34 above), I find that these conditions were factors which prevented the applicant from continuing to undertake work as an unskilled domestic gardener and handyman (being part of the work which the applicant undertook when the units were first purchased in 1995).  I make this finding notwithstanding the applicant’s evidence as set out in paragraph 30 above as to his assessment of the effects of his back pain and hip pain (to the extent that his evidence can be understood as referring to his gardening and maintenance work at the units).  I further find that the non war-caused conditions were factors which prevented the applicant from working as a grader operator, as a ganger in charge of road construction gangs and working as a waiter in a restaurant.

The three remaining types of work referred to in paragraph 23 above are managing a restaurant business, managing holiday units and planning and arranging for the implementation of road and drainage construction works.  I find that the applicant was prevented from continuing to undertake those three remaining types of work by his war-caused condition of PTSD alone, and that the two non war-caused injuries were not contributing factors.  As I understand the evidence, the work of managing a restaurant and managing holiday units would involve taking bookings, receiving guests on their arrival and promoting the business appropriately, and in addition, in the case of managing holiday units, checking the units and ensuring that they were ready for incoming customers, and also some limited form of record keeping.  This work would not entail bending, lifting or walking (being the aspects of his incapacity to work noted by Dr Conway (T11, page 197).  I accept that the applicant could control his back and hip pain so that he could manage this kind of work.  I further think that it is likely that the applicant would also have been able to continue his work in planning and arranging for the implementation of road and drainage construction works, although this is less clear because of the absence of detailed evidence as to what was entailed in his former work in this category for the Tea Tree Gully Council.’

12                  In relation to this finding the Commission says that the AAT made a further error of law in addition to the alleged errors already referred to.  The Commission says the AAT misunderstood the words ‘the only factor or factors preventing the veteran from continuing to undertake that work’ in s 24(1)(c) of the Entitlements Act.  The Commission says that, properly understood, those words do not have the effect that evidence of other non war causes must be disregarded unless those non war caused factors alone would have prevented the veteran from continuing to undertake the relevant work.

13                  The last question that the AAT was required to address was whether the respondent was suffering a loss of income that he otherwise would not have suffered but for the effects of the war caused injuries.  In this regard the evidence before the AAT, which the AAT accepted, was that both the restaurant and the motel businesses either made losses or did not make significant profits, although the businesses were providing the respondent and his family with food and lodging and the units (although not the restaurant) appreciated in value during the period that he owned them.  The AAT found that the viability of the business was affected, at least in part, by the effects of the PTSD from which the respondent was suffering.  The AAT concluded:

‘The applicant gave evidence that if he did not have his ongoing problems he would like to be back at Tin Can Bay with his wife managing the units.  He said further that when they first acquired the two businesses, they anticipated increasing the restaurant business, and (as mentioned above) they intended to increase the number of units to 16, which would have given them a comfortable and idyllic existence.  They had no intention to return to Adelaide.  Mrs Graham also confirmed that if the applicant had not been in the state he was in they would have continued running the units.  I find that the applicant would have continued to manage and operate the units if he had not been prevented from doing so by his war-caused conditions.

From the evidence of the applicant and his wife, it appears that the difficulties which the applicant had in his employment at the Tea Tree Gully Council were also due to the delayed onset of PTSD, although that affliction was not diagnosed until some three years later.  I further find on the evidence before me that the applicant would have continued to work at the Tea Tree Gully Council if he had not been prevented from doing so by his war-caused condition of PTSD.  I also find [that the effect of the PTSD on the viability of the restaurant and motel businesses means] that the applicant is suffering a loss of earnings on his own account, or alternatively a loss of salary from the Tea Tree Gully Council, that he would not be suffering if he were free of his war-caused incapacity.’

14                  The Commission says that this analysis involved an error of law.  It says that the Tribunal failed correctly to apply the approach identified by the Full Court in Counsel v Repatriation Commission (2002) 122 FCR 476 (Counsel).  In particular the Commission argues that in light of the division of types of remunerative work made by the AAT it should have considered the viability of the restaurant and the motel businesses separately. 

15                  In response the respondent says that the Tribunal did not make any of the errors that the Commission has identified.  The respondent says that if the Tribunal made any errors at all they were errors of fact and that this Court does not have jurisdiction to correct those errors.

16                  Against this background, the first issue relates to the meaning of ‘remunerative work that the veteran was undertaking’ in s 24(1)(c) of the Entitlements Act.  The Commission argues that the AAT has misunderstood those words.  The Commission says that the AAT has treated those words as meaning ‘remunerative work that the veteran has ever undertaken’ and that this involves an error of law.

17                  As discussed above the AAT Tribunal referred to a number of cases from this Court, including Banovich v Repatriation Commission (1986) 69 ALR 395 for the proposition that the relevant words refer to ‘the type of work which the veteran had previously undertaken, and not to any particular job’; see also Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225 (Starcevich).  Then, in its analysis of the work that the respondent had previously undertaken, the Tribunal included reference to working as a ‘grader operator’ and as a ‘ganger in charge of road construction gangs’.  In accordance with the Tribunal’s factual findings the respondent had worked as a grader operator and subsequently as a ganger until he was appointed to supervisory positions with the Tea Tree Gully Council.  He left the Council in 1995.  The Tribunal made no finding of the dates or dates when the respondent was appointed to the supervisory positions.  It would not appear that there was any evidence relating to that.  Nevertheless, if there is any temporal limitation contained in the words ‘remunerative work that the veteran was undertaking’ it is difficult to see that the respondent ‘was undertaking’ the work of a grader operator or a ganger at the time that he ceased managing the units in 2002.

18                  As was remarked by Jenkinson J in Starcevich at 226 (see also Fox J at 224) the words ‘was undertaking’ would seem to direct attention to a point in time, namely the point at which the veteran was prevented from continuing to undertake remunerative work by reason of the war caused injury.  This would not necessarily mean that the inquiry was limited to one into the particular job that the veteran was doing at the time that he or she was prevented from continuing to undertake remunerative work. 

19                  However, the authorities binding on me are quite clear.  The words ‘remunerative work that the veteran was undertaking’ are to be understood as meaning any ‘substantive’ remunerative work that the veteran has ever undertaken.  This is made clear by Fox J in Starcevich at 224-226.  In any event, it seems to be clear from the decision of the Full Court in Repatriation Commission v Hendy [2002] FCAFC 424 (Hendy) at [7]-[8], [14]-[15] and [36].  In that case the AAT found that work in a hotel undertaken some 8 years prior to the date when the veteran was prevented from continuing remunerative work constituted ‘remunerative work that the veteran was undertaking’, notwithstanding that over the subsequent 8 years the veteran had been employed only in the transport industry.  The Full Court confirmed that the AAT was required to consider ‘the substantive work that the Tribunal had undertaken in the past’.

20                  In my view the AAT did not fall into any error of law in considering the work undertaken with the Council for the purpose of s 24(1)(c) of the Entitlements Act.  In any event, as quoted in par 13 above, the AAT also found that the respondent ceased work with the Council as a result of his war caused injury and that he would have continued in that employment but for that injury.  On this basis even if there had been some temporal limitation in relation to the remunerative work the veteran ‘was undertaking’ the relevant inquiry would have been, what types of remunerative work was the respondent undertaking in 1995?  Even if there was a temporal limitation it may still have been appropriate for the AAT to consider these particular types of work.

21                  This does not mean that the AAT is required to consider separately each job or type of work that the veteran has ever undertaken.  The purpose of identifying types of work is so as to make the hypothetical comparison required by s 24(1)(c).  It is the comparison referred to in question four of the questions identified by Branson J in Flentjar.  If a type of work which the veteran had previously engaged in many years before is not a realistic hypothetical comparison, the AAT is not required to engage in any detailed analysis of it.  For example, professional football is unlikely to be a relevant hypothetical comparison for a middle aged person, no matter that the person may once have been a professional footballer.  Normally it would be assumed by all parties before the relevant decision maker that some types of remunerative work that the veteran had undertaken in the far distant past were no longer relevant comparitors.  The decision maker is entitled to make the same factual assumption.

22                  Under s 19 of the Entitlements Act, the hypothetical comparison, is made in relation to a period of time.  As the Full Court commented in Leane at [31]:

‘The effect of these provisions in this case is that the Tribunal was required to determine whether a special pension was payable at any time during the assessment period, being the period starting, [when the application is made], and ending when the claim for application is ultimately determined: s 19(9) of the Entitlements Act.  If a special pension was payable at any time during this period then the Tribunal was required to determine that the special pension was payable from that time, notwithstanding that at some subsequent time the Veteran might not have been able to establish that he would be entitled to a special pension.’

23                  In this case the AAT found that the work as a grader operator and as a ganger were not relevant types of remunerative work for the purpose of any hypothetical comparison because the respondent would have been unable to do that work for reasons other than his war caused injuries.  It is not suggested that there was any error of law by the AAT in reaching that conclusion. 

24                  The Commission also argued that the AAT was in error in its division of the types of work performed by the respondent at the restaurant and at the units.  The tasks performed by the respondent would seem to have been similar to those performed by many small business operators.  He did everything that he was capable of doing.  Insofar as the restaurant was concerned this consisted primarily of managing the restaurant and working as a waiter; insofar as the units were concerned it consisted primarily of managing them and doing various unskilled tasks such as gardening and acting as a handyman.  In its analysis the AAT has treated these various tasks as separate and distinct ‘types’ of work.  The result, on the facts of this case, is that the AAT was able to treat the types of remunerative work involving physical strength as being separate from the types of work that have a lesser physical requirement.  As already noted the respondent was suffering from non war caused injuries which limited his capacity to engage in physically demanding work.  The Commission says that the AAT, by effectively splitting one ‘type’ of work into different categories, has effectively foreclosed the question whether it was the war caused injury alone which prevented the veteran from undertaking that remunerative work.  The Commission says that in doing so the AAT has fallen into an error of law in its understanding of the meaning of ‘remunerative work’.

25                  Assuming for this purpose that the AAT has fallen into error, the question is whether that error is one of law or of fact.  Where the issue involves the application of statutory provisions to particular facts the distinction between an error of law and an error of fact is often very imprecise: see Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 450 [24].  Often it is only possible to characterise an error as one of law if the relevant conclusion of mixed law and fact was one that was not reasonably open to the decision maker unless there had been an error of law: see Collector of Customs v Agfa-Gevaert Limited (1996) 186 CLR 389 at 395.  If the conclusion could reasonably be explained by an error of fact then the Court could not be satisfied that the error was one of law.  Where, as in this case, the Court’s jurisdiction is predicated upon its satisfaction that there was an error of law, the Court could not proceed.

26                  This issue is made more problematic in this case by the breadth of the information and material that the AAT is entitled to take into account in forming its decision: see s 33 AAT Act. 

27                  The Commission says that it is clear on the evidence that the respondent was engaged in one type of remunerative work and not separate types of such work.  I am not satisfied that this is as self evident as the Commission claims.  As the AAT put it:

‘I am mindful that the applicant’s previous work in managing the holiday units also embraced carrying out gardening and maintenance activities.  However, on the authorities mentioned … above, the determination required by s 24(1)(c) of the relevant remunerative work is not confined to any particular job, but rather entails an examination of the type of work which the veteran has previously undertaken.  I consider that the work of managing the holiday units would not necessarily also entail performing outside maintenance and gardening activities, and that these activities constituted a separate kind of work.’

28                  In my view that analysis is correct, both as to law and fact.  A person could be both a gardener and a motel manager at the same time.  Whether the respondent could be so described was a question of mixed law and fact for the AAT.  If it was wrong in its conclusion in this case, I am unable to say that the error was one of law.

29                  The next issue is whether the AAT committed an error of law in its understanding of the word ‘alone’ in s 24(1)(c) of the Entitlements Act.  In this regard I note that neither party relied upon s 24(2) of the Entitlements Acteither before the AAT or before me.  The only medical evidence before the AAT in relation to the effects of the non war caused injuries was that contained in the written reports of Dr Conway.  Dr Conway was not called to give oral evidence.  Dr Conway expressed the view that the non war caused injuries contributed to the respondent’s inability to work.  However, as the AAT noted, Dr Conway did not attempt in her report to identify what effect the non war caused injuries would have had on the particular types of remunerative work which the AAT had identified.  Indeed, Dr Conway did not appear to have distinguished between different types of work at all.  The AAT, after referring to the reports of Dr Conway and to the evidence of the respondent and of his wife, concluded that the non war caused injuries would have been factors in the respondent being unable to undertake work that would require bending, lifting or walking.  In my view these findings of fact were fairly open to the AAT.

30                  However, as already noted, in reaching these conclusions the AAT also commented that Dr Conway had remarked on the effects of the non war caused injuries in ‘restricting’ the respondent’s capacity for work.  The AAT commented that it was only if the non war caused injuries prevented the respondent from working that they could be taken into account.  The AAT commented that if Dr Conway had misunderstood the relevant test then her opinion would not be relevant. 

31                  These remarks of the AAT involve a misunderstanding of the law.  What needed to be established for the purposes of s 24(1)(c) of the Entitlements Act is that it was the war caused injuries alone that prevented the veteran from undertaking the relevant remunerative work.  If non war caused injuries restricted the veteran’s capacity to work such that the war caused injuries alone did not prevent the veteran from working, then a special pension was not payable: see Hendy at [37] and see Spender J in Repatriation Commission v Alexander (2003) 75 ALD 329, 334 [24].

32                  However, it does not seem to me that this error of law affected the result reached by the AAT.  The error was made in a comment by the AAT.  It was not a critical part of the AAT’s reasoning.  Further, it would not appear to have affected the AAT’s conclusions in relation to those types of work in respect of which the AAT found that the respondent was prevented from undertaking solely as a result of war caused injuries.  As already noted the AAT concluded that Dr Conway simply did not address that issue in her report.  It was open to the AAT to reach that conclusion.

33                  The final issue raised in these proceedings relates to the AAT’s analysis of the losses that the respondent would have suffered because he was unable to undertake the hypothetical remunerative employment which he was prevented from undertaking by his war caused injuries.  The Commission complains that the AAT analysed the gross income from the restaurant business and the unit business together so as to conclude that there were losses of income.  It says that this involved an error of the sort referred to in Counsel.  In that case there was a detailed analysis of the meaning of the word ‘earnings’.

34                  In my view it will rarely be necessary to engage in a detailed analysis of past financial records and accounts for the purpose of answering the relevant questions under s 24(1)(c) of the Entitlements Act.  This is because the comparison is not between what the person actually earned during the assessment period and what the person earned whilst in remunerative work.  Rather, the comparison is between what the person actually earned at any time during the assessment period and what the person would have earned during that same period in the hypothetical remunerative work which the person was prevented from undertaking.  If, at any time during that period, the veteran earned less in actuality than he or she would have done if engaged in the hypothetical remunerative work then the veteran is entitled to a special pension.  In many cases (of which this case is an example) the actual earnings during the assessment period are nil, or close to it.  In such cases the question is relatively simple – is the decision maker satisfied that the veteran, if he or she was in the employment market for the relevant remunerative work during the assessment period, would have earned anything at all?  If the answer is ‘yes’ and if the other pre-conditions are met, then the veteran is entitled to a special pension.  Often that question can be answered by finding that the person would have continued in the same remunerative activity but for the war caused injury.  However, there are cases where the issue is more complicated and more complex analysis is required. 

35                  In this case the AAT did not engage in the required analysis.  The AAT found that, if the respondent had not been suffering from the war caused injury he ‘would have continued to manage and operate the units’.  With respect this was not the correct comparison given the factual conclusions already reached by the AAT.  The units had been sold.  It was not an option for him to continue to operate and manage them.  Even more fundamentally, some of the tasks that he had formerly done when operating the units (such as gardening) he could no longer do for reasons in which non war caused injuries were a factor.  The issue that the AAT was required to consider was whether there was a loss of earnings between what the respondent actually earned at any time during the assessment period and what the respondent would have earned during that same period as a hypothetical manager who could not bend, lift or walk (being those aspects of his previous tasks that he could no longer undertake for reasons including non war caused reasons).  It may be, for example, that such work was not available or, if it was, that the respondent did not have the training or experience for it.  The AAT did not engage in that analysis.  In my view it was required to do so.  Instead it asked itself whether the former business would have succeeded if the respondent had not been affected by his war caused injury.  This was not the relevant question.  The AAT’s failure to make the required comparison was due to a misunderstanding of the meaning of s 24(1)(c) of the Entitlements Act.  It involved an error of law.

36                  However, that error of law does not require that the AAT’s decision be set aside if the decision can be supported on some other basis.  In this case there was an alternative basis for the conclusion reached by the AAT.  As already noted the AAT also found that the respondent discontinued his employment with the Council in 1995 as a result of his war caused injuries.  It found that the respondent could have continued to perform the duties of that position up to and including the assessment period but for being prevented from doing so by his war caused injuries.  It also compared the earnings that he actually received during the assessment period and what he would have earned if he had continued to be employed by the Council and concluded that he had suffered a loss of salary during the assessment period.  In my view this conclusion was fairly open to the AAT.  It involved no error of law.

37                  As the ultimate result reached by the Tribunal was supported by reasoning and analysis involving no error of law there is no basis for this Court to intervene, notwithstanding that I think that there were some errors of law in some of the reasoning of the AAT.  Those errors did not affect the ultimate result. 

38                  The application must be dismissed.  I will hear the parties as to costs.

Associate:

Dated:              8 October 2004