FEDERAL COURT OF AUSTRALIA

Vulich v Repatriation Commission [2013] FCA 1370

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

2.    The applicant pay the costs of the respondent.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    Mr Vulich is a Vietnam veteran. He joined the army in 1967 at the age of 17. He served until 1973. In the period September 1970 to March 1972, he engaged in operational service in Vietnam. Mr Vulich suffers from the following war caused disabilities:

    injuries to both shoulders;

    alcohol abuse; and

    depressive disorder.

2    From April 2010, Mr Vulich has been in receipt of a disability pension at 100% of the general rate. The relevant assessment period commenced on 29 January 2010. In May 2010, he lodged an application to review the decision of the Repatriation Commission to grant him a pension at 100% of the general rate and sought a pension at the special rate. In late May 2010, the Veterans’ Review Board (“the Board”) affirmed the decision of the Repatriation Commission. Mr Vulich then applied to the Administrative Appeals Tribunal (“the Tribunal”) to review the Board’s decision. The Tribunal affirmed the Board’s decision. Mr Vulich now appeals pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) from the decision of the Tribunal.

The legislative context

3    A veteran is entitled to a pension at the special rate if he or she qualifies under s 24 of the Veterans’ Entitlements Act 1986 (Cth) (“the VE Act”). The issue for determination in this appeal is whether Mr Vulich satisfied the criteria in s 24(1)(c) and 24(2)(b) of the VE Act.

4    Section 24(1)(c) provides:

This section applies to a veteran if:

…

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

5    Section 24(2)(b) provides:

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

…

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

The issues before the Tribunal in summary

6    There were two issues before the Tribunal which focused on the provisions quoted above. The first was whether Mr Vulich could satisfy the “alone test” in s 24(1)(c). That is the first limb of s 24(1)(c). The second was whether he satisfied the “substantial cause test” in s 24(2)(b). That is also relevant to the second limb of s 24(1)(c). Satisfaction of each test depended on the Tribunal’s assessment of facts relevant to Mr Vulich’s remunerative work that his war-caused injuries and diseases prevented him from performing.

The Smith diversion

7    This matter was heard by the Court on 8 August 2013. During the course of her submissions, counsel for the respondent Repatriation Commission referred the Court to the judgment of Gordon J in Smith v Repatriation Commission [2012] FCA 1043; (2012) 131 ALD 63. Counsel told the Court that a Full Court had reserved its judgment in an appeal from her Honour’s judgment in Smith. Counsel said that the decision of the Tribunal the subject of the current appeal was published before Gordon J gave judgment in Smith. Counsel submitted that, had the Tribunal followed Smith, it would not have applied the first limb of s 24(1)(c) of the VE Act in the way it did. Counsel agreed with the Court that there may be some benefit in the Court reserving its judgment in this matter until after the Full Court delivers judgment in the Smith appeal. Counsel for Mr Vulich did not dissent from that approach.

8    During the hearing, on 8 August 2013, the Court asked counsel for the Repatriation Commission whether, if the Full Court agrees with the approach of Gordon J on the correct construction of s 24 of the VE Act, it would be prudent to remit the matter. After some discussion, counsel said as follows:

Even if the Full Court upholds Gordon J’s decision…there is still the second limb – the loss limb – and the Tribunal does address that and does make a finding – a conclusion – in respect of 24(2)(a)(ii) and unless that finding is overturned, Mr Vulich doesn’t satisfy both limbs and so his case would fail at the Tribunal anyway.

9    On 8 August 2013, the Court considered it prudent to await judgment in the appeal from Smith. With the benefit of reflection, reading the transcript of the discussion on 8 August 2013 and re-reading the decision of the Tribunal the subject of the appeal, it no longer has that view. This matter, as the reasons below reveal, can be determined irrespective of the outcome of that appeal.

Second limb of s 24(1)(c)

10    The Court now turns to consider the question whether, even if the Tribunal did not apply the proper approach to the first limb of s 24(1)(c) of the VE Act, did it apply the proper approach to the second limb of that provision? When the second limb of s 24(1)(c) of the VE Act is read together with the aspect of s 24(2)(b) which relates to it, the following issues are raised for resolution:

    By reason of the veteran’s war caused incapacity alone, has he suffered a loss of earnings on his own account that he would not be suffering from if free from that incapacity?; and

    Is that incapacity the substantial cause of his inability to obtain remunerative work?

11    The Tribunal found at [38] of its reasons for decision that Mr Vulich would be continuing to seek remunerative work but for the effects of his alcohol abuse and chronic depression.

12    At [57], the Tribunal found that Mr Vulich’s alcohol abuse was not a factor in his inability to obtain a response to his numerous job applications between 1997 and 2005. At [58], the Tribunal found his depression was not a factor in his inability to obtain work during the period in which he was seeking work. At [59], the Tribunal was satisfied that Mr Vulich’s shoulder condition only had a minor impact on his inability to find work.

13    The Tribunal at [66] found that Mr Vulich’s age and his time out of paid work were factors in his inability to obtain work. At [68], it did not accept that Mr Vulich’s time out of work was, to any great extent, a function of his accepted disabilities. In its conclusion on this topic, at [75] the Tribunal said:

Mr Vulich’s age, time out of work, and the labour market in his region are the substantial causes for his inability to obtain work. It follows that Mr Vulich is prevented from obtaining remunerative work for some reason other than his accepted disabilities.

14    Even if the Tribunal erred in its application of the first limb at s 24(1)(c) of the VE Act, Mr Vulich needed to satisfy both limbs of that provision. The Tribunal decided, as can be seen from the above discussion, that Mr Vulich did not satisfy the second limb.

Questions of law raised in the appeal

15    The first question of law raised in the appeal concerns the correct application of the “alone” test in the first limb of s 24(1)(c) of the VE Act. It is not necessary to answer that question to resolve the current matter. The second question of law was not pressed.

16     The third question of law raised in the appeal is:

Does the decision maker need to give reasons or adequate reasons as to why the Applicant was not entitled to the Special Rate of pension due to his inability to perform work as a self-employed woodworker, such an ability being caused by his war-caused incapacities alone.

17    In his oral submissions, counsel for Mr Vulich submitted that the Tribunal should have focused on his client’s woodworking activity to see if his incapacities prevented Mr Vulich from obtaining work as a self-employed woodworker and whether, but for the incapacities, he would still have been woodworking. At [49], the Tribunal referred to a submission made on behalf of Mr Vulich concerning the option of Mr Vulich returning to woodwork but for his incapacities. The Tribunal did not focus merely on woodworking in considering the second limb of s 24(1)(c) of the VE Act but on the range of work open to Mr Vulich. The Tribunal was not obliged to name specifically all the potentially available types of work open to Mr Vulich but for his war-caused incapacities.

18    The Court accepts the submission of counsel for the Repatriation Commission that under s 43(2B) of the AAT Act, the Tribunal is required to give written reasons for its decision that “shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based”. The obligation is to make findings on material questions of fact. If it was not material to pay particular attention to Mr Vulich’s woodworking activity, then the Tribunal was not required to make specific findings about it, other than the fact that it occurred and when it did. As the Court said in Hill v Repatriation Commission [2004] FCA 832; (2004) 207 ALR 470, at [28], the obligation is to adequately disclose a reasoning process to show how the Tribunal went about its task and why it reached its conclusion. It did so in the matter subject to appeal.

19    The above analysis of the Tribunal is consistent with it taking a broad view of the remunerative work undertaken by Mr Vulich in light of his history of engaging in a broad range of activities. It would be unfair to criticise the Tribunal’s failure to give particular attention to Mr Vulich’s woodworking activity when it was dealing with a work history based largely on employment rather than self-employment. That is why the main focus of the submissions and evidence in the Tribunal proceeding was on Mr Vulich’s inability to find work as an employee.

Conclusion

20    The findings made by the Tribunal on the question of the application of the second limb of s 24(1)(c) of the VE Act were open to it on the material before it. Given that that is so, the decision of the Tribunal would stand even if Ground 1 were made out. Accordingly, there is no utility in the Court waiting for the appeal judgment in the Smith litigation. Equally, there is no utility in remitting the matter to the Tribunal on the basis of the correctness of the judgment of Gordon J at first instance in Smith, given that both limbs of s 24(1)(c) are required to be satisfied. The instant appeal must be dismissed with costs.

Associate:

Dated:    17 December 2013