FEDERAL COURT OF AUSTRALIA

Repatriation Commission v Cedric Newson [2008] FCA 401

DEFENCE AND WAR - veteran’s affairs – eligibility for receipt of pension – appeal from decision of the Administrative Appeals Tribunal that held that clinical onset of osteoarthrosis of the applicant’s right hip and both knees had been war-caused - Veterans’ Entitlements Act 1986 (Cth) ss 120, 120B

STATUTORY INTERPRETATION – whether the Tribunal misconstrued and misapplied cll 5(j) and 5(k) of the Statement of Principles No 82 of 2001 – commencement date of period by which clinical onset of osteoarthrosis must have occurred – requirement in cl 4 of the Statement of Principles that the factors in cl 5 ‘must be related to any relevant service rendered by the person’ - Veterans’ Entitlements Act 1986 (Cth) s 196B

Veterans’ Entitlements Act 1986 (Cth) ss 120, 120B, 196A, 196B

Repatriation Commission v Keeley (2000) 98 FCR 108

REPATRIATION COMMISSION v CEDRIC NEWSON

NSD 1539 OF 2007

EDMONDS J

31 MARCH 2008

SYDNEY

THE COURT ORDERS THAT:

1.                  The appeal be allowed.

2.                  The respondent pay the applicant’s costs.

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 from part of a decision of the Administrative Appeals Tribunal (‘the Tribunal’) namely, the part in which the Tribunal set aside the applicant’s (‘the Commission’s) decision in relation to osteoarthrosis of the right hip and both knees.  The Tribunal held that those conditions were war-caused and remitted the assessment of the respondent’s (Mr Newson’s) entitlement to the Commission.

2                     The Commission’s notice of appeal puts the question of law raised by the appeal as being whether the Tribunal misconstrued and misapplied cll 5(j) and 5(k) of the Statement of Principles No 82 of 2001, made pursuant to s 196B of the Veterans’ Entitlements Act 1986 (Cth) (‘the Act’), by failing to take into account the requirement in cl 4 of the Statement of Principles that the various factors set out in cl 5 of the Statement of Principles ‘must be related to any relevant service rendered by the person’.

3                     The grounds of appeal were put as being whether the Tribunal erred by interpreting and applying cll 5(j) and 5(k) of the Statement of Principles No 82 of 2001 as if it dealt with or included activity that the applicant performed during the 20-year period (up to 1967) and the 42-year period (up to 1999) respectively after he had ceased rendering eligible service.  It is asserted that the Tribunal failed to take into account the requirement in cl 4 of the Statement of Principles that the factors listed in cl 5 ‘must be related to any relevant service rendered by the person’.

FACTUAL BACKGROUND

4                     The following factual background is taken from the Commission’s written submissions.  Apart from one minor error, which has been corrected, Mr Newson does not dispute these facts, nor the statements of the relevant legislation and the relevant statement of principles which follow.

5                     Mr Newson enlisted in the Royal Australian Air Force (‘RAAF’) on 3 November 1942, and served as a ‘trainee technical’ and then a ‘fitter general’ on various RAAF bases until he was discharged on 6 January 1947.  His RAAF service was ‘eligible service’ for the purposes of the Act: see s 7(c).

6                     After his discharge, Mr Newson worked as a carpenter/joiner for various building companies from 1947 until 1967.

7                     In 1967, Mr Newson became an employee of the Sydney County Council (SCC), now known as Energy Australia.  He worked there until 1989.  He retired ‘mainly’ because he had suffered a heart attack.

8                     On 16 June 2005, Mr Newson claimed a disability pension under the Act in respect of conditions described in his claim form as ‘heart problems’, ‘hearing problems and ringing in ears’, ‘cataracts’, ‘knee problems (both) and right hip problem’ and ‘back problems’.

9                     On 25 October 2005, a delegate of the Commission determined that:

·                    ischaemic heart disease, bilateral sensorineural hearing loss, bilateral tinnitus and acquired cataracts in both eyes were war caused;

·                    bilateral knee osteoarthrosis, right hip osteoarthrosis, lumbar spondylosis and spondylolytic spondylolisthesis were not related to service;

·                    disability pension was payable at 50% of the general rate with effect form 16 March 2005.

10                  Mr Newson applied to the Veterans Review Board for review of the rejection of his knee and back problems.  He also sought a review of the assessment of his pension rate.  On 19 July 2006 the Board affirmed the delegate’s decision.  Mr Newson then applied to the Tribunal.

11                  Before the Tribunal, Mr Newson withdrew his claim in respect of spondylosis.  He also requested the Tribunal to remit the assessment of his claim to the Commission.

12                  The review conducted by the Tribunal was therefore confined to the issues of whether Mr Newson’s lumbar spondylosis, bilateral knee osteoarthrosis and right hip osteoarthrosis were war-caused.  The present appeal concerns its findings in relation to bilateral knee osteoarthrosis and right hip osteoarthrosis.

RELEVANT LEGISLATION

13                  Part II of the Act establishes a scheme that provides inter alia for the payment of pensions to veterans who have become incapacitated from war-caused injury or war-caused disease: ss 13(1)(b) and 13(1)(d).

14                  The veteran may make a claim for a pension: s 14.  The applicant is required to consider and determine claims for pension: ss 18 and 19.

15                  Section 120 of the Act prescribes the standard of proof to be applied when making determinations under the Act. The general provision is found in s 120(4), which requires the applicant to determine matters other than those to which ss 120(1) and (2) apply ‘to its reasonable satisfaction’.  A different standard of proof is prescribed in ss 120(1) and (2) for claims arising out of operational service; those provisions do not apply to the present case, because Mr Newson did not render operational service.

16                  Section 120(4) is affected by s 120B, which applies to any claims made after 1 June 1994.  Section 120B(3) relevantly provides:

120B(3)  In applying subsection 120(4) to determine a claim, the Commission is to be   reasonably satisfied that … a disease contracted by a person … was war-caused .. only if:

(a)       the material before the Commission raises a connection between the … disease … of the person and some particular service rendered by the person; and

(b)              there is in force:

            (i)         a Statement of Principles determined under subsection 196B(3) ….; or

(ii)                 ….

            that upholds the contention that the … disease … is, on the balance of probabilities, connected with that service.

17                  Section 196B provides that the Repatriation Medical Authority established under s 196A has functions that include determining Statements of Principle: see subs 196B(3).

THE RELEVANT STATEMENT OF PRINCIPLES

18                  As a general rule, the Tribunal determines matters by applying the law in force as at the date of its decision, rather than the law that existed at an earlier time.  However, the Court concluded in Repatriation Commission v Keeley (2000) 98 FCR 108 at [46] per Lee and Cooper JJthat:

‘…Parliament intended that the review of a decision on a claim made pursuant to a Statement [of Principles] more beneficial to a claimant than the terms of a Statement that replaced the former Statement after the decision has been made, is to be conducted as if the former Statement has not been revoked.’

19                  It follows that the Tribunal may apply either the Statement of Principles in force at the time when the delegate’s decision was made, or the Statement of Principles that is in force on the date when it determines the matter.  The Statement of Principles that is more beneficial to the veteran must be preferred.

20                  In the present case, the Tribunal applied the Statement of Principles in force at the time of the original decision (Instrument No 82 of 2001) rather than the Statement of Principles in force at the time of its decision (Instrument No 32 of 2005) on the basis that the earlier statement of principles was more beneficial to Mr Newson (at paras [10], [59] and [62] of the Tribunal’s Reasons).

21                  The Statement of Principles No 82 of 2001 relevantly provides:

Factors that must be related to service

    4.    Subject to clause 6, at least one of the factors set out in clause 5 must be related to any relevant service rendered by the person.

Factors

    5.    The factors that must exist before it can be said that, on the balance of probabilities, osteoarthrosis …. is connected with the circumstances of a person’s relevant service are:

….

(j)         for osteoarthrosis of a hip or knee joint lifting loads of at least 35kg while weight bearing to a cumulative total of 168 000 kg within any 10 year period, before the clinical onset of osteoarthrosis in that joint, and where such physical activity has ceased, the clinical onset of osteoarthrosis has occurred within the 25 years immediately following such activity; or

(k)                for osteoarthrosis of a knee joint, kneeling or squatting for at least one hour each day on more days than not for at least two years before the clinical onset of osteoarthrosis in that joint, and where such physical activity has ceased, the clinical onset of osteoarthrosis has occurred within the 25 years immediately following such activity; ….

22                  In relation to cl 4 of the Statement of Principles extracted in [21] above, it is relevant to note the Tribunal’s observation at para [9] of its reasons that the reference in subs 196B(2) of the Act to a ‘particular kind of injury, disease or death (being related) to … service’ is expounded in subs 196B(14) to provide relevantly, in effect, that a factor causing the injury is ‘related to service rendered by a person’ if it resulted from an occurrence that happened while the person was rendering that service, or if it arose out of, or was attributable to that service.

THE TRIBUNAL’S REASONING AND THE COMMISSION’S SUBMISSIONS

(A)       Mr Newson’s right hip

23                  The Tribunal found that clinical onset of osteoarthrosis in Mr Newson’s right hip occurred ‘…. before 1991, but not as early as 1981: probably the mid 1980s’ at [50] and [51].

24                  The Tribunal first considered Mr Newson’s right hip claim against the current Statement of Principles (Instrument No 32 of 2005).  The factor in cl 5(i) required the veteran to have lifted at least 168,000 kilograms within ‘any ten year period’ before the clinical onset of osteoarthrosis in the hip, and the clinical onset of osteoarthrosis in that hip to have occurred within the 25 years following that period.

25                  The Tribunal made the following observations in relation to the application of the factor in cl 5(i) of Instrument No 38 of 2005:

‘56.   In our view, “any 10 year period” provides flexibility in cases where, for example, significant weights are only lifted towards the end of a veteran’s service.  The remaining weight may be lifted in the veteran’s post-service work, as long as the service portion of the lifting is a material contribution to the required weight.  Alternatively, if the heavy lifting occurs intermittently throughout a veteran’s service, the 10 year calculations may start at any time during service which is most advantageous to the veteran, providing that the service portion of the lifting is a material contribution to the required weight.

57.   On this view, the clinical onset of the veteran’s osteoarthrosis of the right hip would need to have occurred no later than 1980; that is, 1946 (the last full year of service) plus 9 years to make the 10 year period, plus an additional 25 years.  This would be the most generous possible formula.  We note that the bulk of the veteran’s service lifting occurred between 1943 and 1945.

58.   As discussed above, we were reasonably satisfied that the clinical onset of Mr Newson’s hip condition was in the mid 1980s.  However, based on the above considerations, we are not reasonably satisfied that Mr Newson met all criteria for factor (5)(i) in Instrument No.32 of 2005, notably that the clinical onset of his condition was not within the 25 years following the period.’

26                  The Commission’s submissions on appeal to this Court were effectively that the Tribunal should have come to the same result in its application of the factor in cl 5(j) of Instrument No 82 of 2001.  However, the Tribunal reasoned to a different result.  At paras [59] and [60] the Tribunal reasoned:

‘Mr Newson’s evidence was that his heavy work did not cease until his change of jobs in 1967.  On that basis, we are reasonably satisfied that the clinical onset of his hip condition in the mid 1980s was within 25 years of the cessation of the activity i.e., heavy lifting in 1967.  Further, we are reasonably satisfied that Mr Newton lifted weights of at least 35 kilograms, to a cumulative total of 168,000 kilograms, between 1943 and 1953.  His heavy lifting did not cease until 1967, and the clinical onset of osteoarthrosis in the hip occurred within the 25 years immediately following such activity.

We therefore find that Mr Newson meets factor (5)(j) in Instrument No.82 of 2001.’

27                  The Tribunal offered no further elaboration of its reasoning, confining it to a determination of the following issues:

·                    whether Mr Newson had lifted the specified cumulative total weight while weight bearing within a ten year period – the Tribunal held that he had done so, and that this had occurred between 1943 and 1953;

·                    whether ‘such physical activity’ had ceased – the Tribunal held that it had ceased, and that cessation had occurred in 1967.

·                    whether the clinical onset of osteoarthrosis had occurred within the 25 years immediately following ‘such activity’ – the Tribunal held that it had, and that clinical onset had occurred in the mid 1980s.

28                  On its appeal to this Court, the Commission submitted that cl 4 of the Statement of Principles required, relevantly, that factor 5(j) ‘be related to any relevant service rendered by the person.’  Mr Newson’s period of eligible service commenced on 3 November 1942 and ended on 6 January 1947.  The Commission submitted that the Tribunal made no reference to cl 4 in its reasons; it made no attempt to explain how Mr Newson’s work as a carpenter/joiner during the two decades after his discharge were related to his eligible service, though it is clear that the Tribunal took that period of employment into account when making its findings.  According to the Commission, the inference is irresistible – the Tribunal overlooked cl 4, and erred in law by failing to take it into account.

(B)       Mr Newson’s knees

29                  Prior to the Tribunal hearing, the parties had agreed that clinical onset of Mr Newson’s bilateral knee osteoarthrosis had occurred in 1999.  The Tribunal found that this agreement was consistent with an x-ray report that was tendered in evidence before it, and accepted that clinical onset was ‘at least 1999’ at [61].

30                  Applying Statement of Principles 82 of 2001, at [64] and [65] the Tribunal reasoned:

‘We were reasonably satisfied that Mr Newson was kneeling or squatting for at least one hour each day, on more days than not, for at least the two years before 1999 (the date of clinical onset of osteoarthrosis of the knees).  He had continued in that activity from the time of his service, ceasing only on his retirement in 1989.  The clinical onset of osteoarthrosis in 1999 has therefore occurred within the 25 years immediately following such activity.

We therefore find that Mr Newson meets factor (5)(k) in Instrument 82 of 2001.’

31                  The Tribunal offered no further elaboration of its reasoning, confining it to a determination of the following issues:

·                    whether Mr Newson had knelt or squatted at the required frequency for at least two years before clinical onset – the Tribunal held that he had, and that this had occurred ‘from the time of his service’ until 1989.  The Tribunal’s reference to ‘at least the two years before 1999’ in [64] appears to be a typographical error – the Tribunal presumably intended to say ‘at least two years before 1999.’

·                    whether ‘such physical activity’ had ceased – the Tribunal held that it had ceased, and that cessation had occurred on his retirement in 1989.

·                    whether the clinical onset of osteoarthrosis had occurred within the 25 years immediately following ‘such activity’ – the Tribunal held that it had, and that clinical onset had occurred in 1999.

32                  On its appeal to this Court, the Commission submitted that cl 4 of the Statement of Principles required, relevantly, that factor 5(k) ‘be related to any relevant service rendered by the person.’  Mr Newson’s period of eligible service commenced on 3 November 1942 and ended on 6 January 1947.  The Commission submits that the Tribunal made no reference to cl 4 in its reasons.  It made no attempt to explain how Mr Newson’s work as a carpenter/joiner for the two decades after his discharge, and his subsequent work for the Sydney County Council from 1967 to 1989 were related to his eligible service.  Once again, it is clear that the Tribunal took the respondent’s period of employment as a carpenter/joiner and as an SCC employee into account when making its findings.  According to the Commission, once again, the inference is irresistible – the Tribunal overlooked cl 4, and erred in law by failing to take it into account.

ANALYSIS

33                  There is, in my view, a fundamental problem with the Tribunal’s reasoning process which infects both the conclusion that Mr Newton meets the factor in cl 5(j) (right hip) in Instrument 82 of 2001 as well as its conclusion that he meets the factor in cl 5(k) (both knees).

34                  Before dealing with this, I would observe that there is an important difference between both factors which should be borne in mind.  The factor in cl 5(j) requires the lifting of loads of at least 35kg while weight bearing to a cumulative total of 168,000 kg within any ten year period.  In other words, the cumulative total may be reached within a shorter period, say five years, but achieving it within a longer period, say 12 years, would not be sufficient.  On the other hand, the factor in cl 5(k) requires kneeling or squatting for at least one hour each day on more days than not for at least two years, which is the minimum period over which it may be satisfied.  I would read that requirement as requiring two contiguous years.

35                  As a matter of construction, the periods referred to in the factors in cll 5(j) (‘within any 10 year period’) and (k) (‘for at least two years’) must encompass at least part of a period of relevant service for the requirement of cl 4 of Instrument No 82 of 2001 to be met; otherwise there is no relationship between the injury/disease and the relevant service.  Moreover, that part of the period of relevant service must contribute to the requirements of each factor, in the case of the factor in cl 5(j) to the total weight lifted over the period not greater than 10 years and, in the case of the factor in cl 5(k), to the kneeling or squatting time requirement in one of the two years.

36                  I think the Tribunal recognised the need for this relationship in its reasons at [56] and [57].  While the Tribunal’s observations there are directed to the factor in cl 5(i) of Instrument No 32 of 2005, there are no substantive differences between the relevant terms of the factor in cl 5(i) of Instrument No 32 of 2005 and the same terms of the factor in cl 5(j) of Instrument No 82 of 2001.

37                  If one were to take the last five years of Mr Newson’s relevant service (1946) as being the starting point, the last year in which the requirements of the factor in cl 5(j) of Instrument No 82 of 2001 (and the factor in cl 5(i) of Instrument No 32 of 2005) could be met would be 1955 (at the end of 10 years); and the last year in which the requirements of the factor in cl 5(k) of Instrument No 82 of 2001 (and the factor in cl 5(l) of Instrument No 32 of 2005) could be met would be 1947 (at the end of two years).

38                  Where the Tribunal’s process of reasoning appears to have fallen into error is in its construction of the factors in cll 5(j) and (k) of Instrument No 82 of 2001 as to when the period of 25 years, within which clinical onset must occur, first starts.  Under the current Statement of Principles in Instrument No 32 of 2005, it is clear that in the case of the factors in cll 5(i) and (l), the period of 25 years first starts immediately following the 10 year or lesser period and the two year period respectively.  The Tribunal was of the view that the start date under the factors in cll 5(j) and (k) of the previous Statement of Principles in Instrument No 82 of 2001 did not occur until physical activity of the generic kind referred to in the factors, ‘heavy lifting’, in the case of cl 5(j), and ‘kneeling and squatting’, in the case of cl 5(k), actually ceases even if that cessation does does not occur until years after the expiration of the 10 year or lesser period in the case of the factor in cl 5(j) and the expiration of the two-year period in the case of the factor in cl 5(k).  Hence, the Tribunal’s finding, that Mr Newson’s ‘heavy lifting’ only ceased in 1967 led it to the conclusion that the 25 year period within which clinical onset must occur in the case of the right hip only then commenced; and the finding that Mr Newson’s ‘kneeling and squatting’ only ceased in 1989 led it to the conclusion that the 25 year period within which clinical onset must occur in the case of both knees only then commenced.

39                  In my opinion, this process of reasoning is predicated on an erroneous construction of the references to ‘such physical activity’ in both cll 5(j) and (k) of Instrument No 82 of 2001.  It is not a reference to physical activity of that generic kind such as ‘heavy lifting or ‘kneeling and squatting’; the reference is to ‘such physical activity’ and, so understood, is a reference back to the physical activity meeting the anterior terms of the factors in cll 5(j) and (k).  As indicated in [35] above, this in turn requires the relevant periods therein referred to -‘within any 10 year period’ and ‘for at least two years’ – to encompass at least part of a period of relevant service so as to provide a relationship to meet the requirements of cl 4 that the factor must be related to any relevant service rendered by the person.  Such physical activity ceases, at the latest, at the end of the 10 year period in the case of the factor in cl 5(j) of Instrument No 82 of 2001 and, in the case of the factor in cl 5(k) of that instrument, at the end of the two year period; in other words, in the case of the factor in cl 5(j) in 1955 and in the case of the factor in cl 5(k) in 1947.

40                  So considered, there is no difference in result in the application of the factors in cll 5(j) and (k) of Instrument No 82 of 2001 from the result in the application of the factors in cll 5(i) and (l) of Instrument No 32 of 2005.  In the facts of the present case, for Mr Newson to meet the factor in cl 5(j), clinical onset of osteoarthrosis of the right hip would have had to occur by 1980, and the Tribunal found that it only occurred in the mid 1980s; for Mr Newson to meet the factor in cl 5(k), clinical onset of osteoarthrosis of both knees would have had to occur by 1972, and the Tribunal found it only occurred in 1999.

41                  The appeal must be allowed with costs.

Associate:

Dated:         31 March 2008