FEDERAL COURT OF AUSTRALIA

Richmond v Repatriation Commission [2014] FCA 272

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The decision of the Tribunal be set aside and the matter be remitted to the Tribunal, differently constituted, for determination according to law.

3.    The respondent pay the applicant’s costs.

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

REASONS FOR JUDGMENT

introduction

1    The principal issue in this appeal is whether the Administrative Appeals Tribunal (“the Tribunal”) erred in holding that the applicant, a veteran, was not eligible for a pension at a higher rate because it misconstrued s 24(1)(c) of the Veterans’ Entitlements Act 1986 (Cth) (“the Act”) and the questions identified by the Full Court in Flentjar v Repatriation Commission (1997) 48 ALD 1 (“Flentjar”).

2    The applicant, Geoffrey Richmond, is a veteran who, at the time of the Tribunal’s decision and at the hearing before the Federal Court, was aged 68. The applicant served in the Australian Army from 2 February 1966 to 1 February 1968.

3    The applicant suffers from a number of medical conditions, including the following, which the respondent, the Repatriation Commission, accepts as war-caused: hyperkeratosis, basal cell carcinoma, bilateral sensorineural hearing loss, bilateral tinnitus, non melanotic malignant neoplasm of the skin, and, most significantly to this appeal, alcohol dependence and generalised anxiety disorder.

4    The applicant, whose entitlement to a service disability pension at 70 per cent of the general rate is acknowledged, sought but was denied a higher special rate pension.

5    By amended notice of appeal filed by consent on 22 November 2013, the applicant appeals, pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”), from the decision of the Veterans’ Appeals Division of the Tribunal given on 20 June 2013. The Tribunal affirmed the decision of the Veterans’ Review Board, which, on 10 November 2011, affirmed the decision of the respondent, given on 14 February 2011, that the applicant was not entitled to a special rate pension.

6    The applicant alleged that the Tribunal erred in that it:

(a)    misconstrued s 24(1)(c) and the questions in Flentjar, as it:

(i)    concluded that the applicant’s war-caused conditions alone did not prevent him from continuing to undertake remunerative work but made no finding that there was any other preventative factor;

(ii)    failed to consider whether the “alone” test was satisfied in relation to the assessment period as required;

(iii)    failed to consider whether the “alone” test was satisfied in relation to the occupations constituting the applicant’s relevant remunerative work, as opposed to particular jobs the applicant had held;

(iv)    erroneously conflated factors which would prevent or contribute to preventing the applicant from undertaking remunerative work with factors inducing the applicant to give up the work; and

(v)    failed, in determining whether the criteria of s 24(1)(a) were satisfied, to ask the “hypothetical question” required by relevant authority;

(b)    used the consequences of the applicant’s war-caused disability as a reason to deny his entitlement;

(c)    failed to accord the applicant procedural fairness, in that it did not consider or address his material submission that the frustration he experienced as a teacher was the consequence, rather than independent, of his war-caused anxiety disorder; and

(d)    failed to provide adequate reasons for its decision.

7    The respondent denied that the Tribunal erred as alleged.

8    It contended that:

(a)    the Tribunal properly construed the “alone” test and was entitled to conclude that it was not satisfied on the basis of factors which caused the applicant to decide to discontinue work, rather than factors which disabled him from continuing to undertake work. Further, any failure specifically to consider the relevant issues in the context of the assessment period was immaterial;

(b)    the Tribunal was not required to pose the hypothetical question in the context of the third Flentjar question;

(c)    the Tribunal considered and rejected the applicant’s submission and evidence that his frustration with teaching was a consequence of his war-caused condition; and

(d)    the Tribunal’s reasons were adequate.

9    The applicant relied on submissions and a chronology filed on 15 November 2013 and submissions in reply filed on 3 December 2013.

10    The respondent relied on submissions filed on 26 November 2013.

A Special rate pension under section 24(1)(c) of the act

11    A special rate pension is a higher rate of pension payable to a veteran who is, among other things, unable to work due to his or her accepted war-caused conditions alone. In order to qualify for a special rate pension, a veteran must satisfy the criteria prescribed in s 24 of the Act.

12    The provisions governing entitlement to a special pension appear in the context of the wider statutory regime for the payment of veteran’s pensions, which was summarised by Spender J in Repatriation Commission v Alexander (2003) 75 ALD 329; [2003] FCA 399 (“Alexander”) as follows:

[9]    …

•    the Commonwealth is liable to pay a pension where a veteran has become incapacitated from war-caused injury or war-caused disease (s 13);

•    a veteran may make a claim for a pension (s 14);

•    a veteran who is in receipt of a pension may make an application for an increase in the rate of pension (s 15);

•    the Repatriation Commission is required to consider and determine the claim or application of a veteran (s 18);

•    the Repatriation Commission is required to consider the rate or rates at which a pension would have been payable during the assessment period, and also the rate at which the pension is payable: s 19(5C). The assessment period commences on the day on which a claim or application is received, and ends on the day when the claim or application is determined: s 19(9).

[10]    A pension under the Act may be paid at the general rate (s 22), the intermediate rate (s 23), or the special rate (s 24).

13    Section 24 of the Act relevantly provides:

24    Special rate of pension

(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; …

14    In Flentjar, Branson J (with whom Beaumont and Merkel JJ agreed) set out four questions which a decision-maker should consider and address in applying s 24(1)(c) of the Act (at 4-5):

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 own account that he would not be suffering if he were free of that incapacity?

Background

15    The applicant’s employment history, as set out by the Tribunal, is as follows:

(1)    After leaving school, the applicant completed a five-year apprenticeship, qualifying as a boilermaker/structural steel tradesperson.

(2)    After two years of national service, the applicant worked in his trade for approximately 11 years, including nine years at Alcoa.

(3)    In the late 1970s, the applicant became a trade teacher, obtaining a Certificate of Technical Teaching followed by a Diploma in Technical Teaching four years later.

(4)    From approximately 1979 until 1989, the applicant taught at technical schools in the Geelong region.

(5)    From 1989 to 1994, the applicant was Curriculum Development Officer at the Gordon Institute.

(6)    From 1995 to 1996, the applicant was self-employed as an industry-training consultant.

(7)    From 1996 to 1997, the applicant moved to New South Wales where he ran his own business as a cruise boat operator. He returned to Victoria because he and his wife’s parents were unwell, his children were living in Victoria and he did not like the humidity during summer in New South Wales.

(8)    From April 1997 to 21 January 2005, the applicant worked as a teacher at Goulburn Ovens Institute of TAFE (“Goulburn Ovens TAFE”) teaching metal fabrication and welding to apprentices generally 16 to 20 years of age and, in the last year of his employment, undertaking online work.

(9)    On about 19 December 2004, the applicant tendered his resignation which was accepted on 24 December 2004. He informed the Tribunal that he changed the word “resignation” to “retirement” on advice from the human resources section of the Goulburn Ovens TAFE in order to secure pro-rata long service leave. He ceased work on 21 January 2005, his 60th birthday and obtained an age service pension with effect from 23 February 2005.

(10)    Between 26 June and 9 July 2005, the applicant worked for approximately three weeks as a casual teacher at the Gordon Institute.

(11)    In late 2005, the applicant visited the office of Melbourne River Cruises in relation to an advertisement for the position of coxswain, Marine Engineer driver, but apparently did not apply for, and was not offered, the position. The applicant informed the Tribunal that he continued to look in the newspapers for available positions but had not applied for any job.

(12)    The applicant had not worked since his casual work at the Gordon Institute in mid-2005.

16    It was common ground that, on 21 March 2007 (and not on 15 August 2007 as was stated by the Tribunal) the applicant (who was then under the age of 65) applied under s 15 of the Act for an increase in his pension to a special rate payable under s 24 of the Act. He was unsuccessful, as the respondent and the Veterans’ Review Board did not accept that the applicant’s psychiatric condition (which he described as post-traumatic stress disorder) was a war-caused condition.

17    The applicant lodged a claim with the Tribunal. On 30 August 2010, the applicant and the respondent settled the dispute on the basis that the applicant suffered from the war-caused diseases of generalised anxiety disorder and alcohol dependency with effect from 15 August 2007, but not post-traumatic stress disorder. The parties’ agreement was submitted to, and endorsed by, the Tribunal. The matter was remitted to the respondent for calculation of the rate of pension to which the applicant was entitled.

18    On 14 February 2011, the respondent determined that the applicant was entitled to a disability pension at 70 per cent of the general rate.

19    On 4 April 2011, the applicant applied to the Veterans’ Review Board for a review of the respondent’s decision, claiming that he was entitled to a higher, special rate pension.

20    On 10 November 2011, the Veterans’ Review Board affirmed the respondent’s decision that the applicant was not eligible for a special rate pension.

21    On 1 December 2011, the applicant applied to the Tribunal for review of the respondent’s decision and, on 20 June 2013, the Tribunal affirmed the respondent’s decision.

22    On 11 July 2013, the applicant appealed to the Federal Court of Australia. The applicant filed an amended notice of appeal by consent on 22 November 2013.

the tribunal’s Decision

The evidence before the Tribunal

23    The Tribunal set out background to the application and noted the applicant’s accepted war-caused medical conditions, including alcohol dependency and generalised anxiety disorder. The Tribunal stated:

5.    In deciding whether Mr Richmond is eligible for pension at the special rate, the Tribunal needs to consider:

•    Is Mr Richmond unable to undertake remunerative work for more than 8 hours per week?

•    When and why did Mr Richmond stop working?

•    Do Mr Richmond's accepted war-caused conditions alone prevent him from working?

24    The Tribunal set out the applicant’s employment history.

25    The Tribunal referred to the applicant’s written statement dated 1 December 2011, which stated that, while teaching at Goulburn Ovens TAFE, where he taught metal fabricating and welding to apprentices between 1997 and early 2005, he had experienced “friction with the students, management and colleagues” and “ceased employment with Goulburn Ovens TAFE because of an inability to cope with [his] duties due to [his] emotional state”.

26    The Tribunal referred to the applicant’s oral evidence that whilst working at Goulburn Ovens TAFE he was “100 per cent on tenterhooks, always anxious, uptight, tense”.

27    The Tribunal referred to the applicant’s evidence that he experienced chest pains, palpitations and shaking hands related to anxiety, was prescribed medication after experiencing a panic attack in 2001 and again experienced palpitations in 2002. The applicant stated that towards the end of his teaching he was unable to undertake certain welding processes because his hands shook.

28    The Tribunal noted that while working at Goulburn Ovens TAFE, the applicant lived at properties about 300 kilometres away and drove to Shepparton during the week to teach, returning home at weekends. Towards the end of his employment at Goulburn Ovens TAFE he did some online work but did not particularly enjoy it. The applicant testified that he first considered ceasing work in around early 2000.

29    The Tribunal observed that, in his exit survey when he left Goulburn Ovens TAFE, the applicant did not mention any threats or other difficulties he had experienced.

30    The Tribunal further noted that the applicant had taken very little sick leave while at Goulburn Ovens TAFE although he did not concede that this was because he was coping well with the work.

31    The Tribunal observed that when it asked the applicant how he felt about his teaching career the applicant responded:

Before I ... left teaching at Geelong and I thought it was good, and then I experienced difficult times with students early in the piece when I started at Goulburn Ovens, so much so I just walked out on a class, probably not the student, but anyway I walked out, I just walked out on the class and left them without telling anyone. You know, of that period of eight years that I was there, I just found it more difficult to get on with students and staff, management. I’m sure, you know, I’m aware that things have to change, but I don’t know whether I could adapt.

...

I just seem to have problems with students, dealing with students. I don’t know whether it was their attitude or mine. Staff, I had trouble with my own staff. I don’t know why I got into trouble with them, and management, I had trouble accepting management’s policies and practices. I was just a bit grumpy, I suppose maybe I was a grumpy old bear or something ...

32    The Tribunal noted the applicant’s evidence that after leaving Goulburn Ovens TAFE in mid-2005, he obtained a sessional teaching position at the Gordon Institute in Geelong after seeing a newspaper advertisement. After two to three weeks at the Gordon Institute, however, he decided that he could not continue, despite being offered as much work as he wanted, because he was not enjoying the work and “getting uptight still”.

33    The Tribunal observed that the applicant gave evidence that after leaving the Goulburn Ovens TAFE he regularly looked for work in the Geelong Advertiser and visited a Melbourne Cruise company about the position of coxswain which he saw advertised. He realised however, that he was unsuited for, and did not formally apply for, the position, which he was not offered.

34    The Tribunal noted the evidence of Norm Dixon, the applicant’s former colleague, who was teaching at the Gordon Institute when the applicant left the Goulburn Ovens TAFE. Mr Dixon testified that he contacted the applicant and invited him to join the Gordon Institute’s casual teaching pool, which included several persons aged over 60. Mr Dixon agreed that many TAFE teachers were concerned about a decline in the standards of conduct.

35    The Tribunal considered evidence from medical practitioners, including the applicant’s doctor in Shepparton, Dr Hook, who first saw the applicant on 20 June 2002 and last saw him on 22 February 2005. Dr Hook had noted the applicant’s anxiety and depression at various times and testified that the applicant suffered from “some form of post-traumatic stress disorder and alcohol dependency, anxiety, including claustrophobia and panic, and related depressive symptoms”.

36    Dr Hook concluded that in February 2005 he believed that the applicant was medically unfit to continue his occupation, as school teaching could be “very stressful” and was, given the applicant’s symptoms, “totally inappropriate”.

37    The Tribunal considered the evidence of the applicant’s current doctor, Dr Hales, who saw the applicant about four times per year. Dr Hales described the applicant’s psychiatric issues as predominantly anxiety with a milder element of depressive symptoms.

38    In oral evidence, Dr Hales told the Tribunal that the applicant’s poor concentration, low tolerance for stress and related symptoms impeded his ability to work.

39    The Tribunal considered the report dated 22 August 2012 of an occupational physician, Dr Horsley, who stated that the applicant’s physical accepted disabilities had “no impact on capacity for work as do his non-accepted disabilities”.

The Tribunal’s findings

40    Under the general heading “Do Mr Richmond’s accepted war-caused conditions alone prevent him from undertaking remunerative work?” the Tribunal noted that both parties agreed, and it found, that the applicant satisfied ss 24(1)(a) and 24(1)(b) of the Act.

41    The Tribunal set out the relevant legislation and the four questions identified in Flentjar.

42    In response to the first Flentjar question, it found that the remunerative work undertaken by the applicant was as “a trade teacher, boilermaker and boat operator”.

43    It found that the answer to the second Flentjar question was “yes”, based on the evidence from medical practitioners that the applicant was prevented from working more than eight hours per week in any of his previous roles.

44    Having answered the second Flentjar question favourably to the applicant, the Tribunal did not expressly state that it was proceeding to consider the third Flentjar question. At paragraph 51, however, it noted that there were “also other factors to be taken into account in relation to [the applicant’s] employability apart from his accepted war-caused conditions”.

45    The Tribunal noted Nicholson J’s observations in Forbes v Repatriation Commission (2000) 101 FCR 50; [2000] FCA 328 (“Forbes”) at [39] that:

… the question whether the veteran has been prevented by reason of the war-caused condition “alone” can only be answered by reference to all the circumstances in which the war-caused condition exists.

46    The Tribunal cited Spender J’s observations in Alexander (at [22]) to the effect that the “alone” requirements in s 24(1)(c) would not be satisfied if non-service related conditions were a factor (even if of secondary importance) in preventing the veteran from continuing to undertake remunerative work.

47    The Tribunal also cited the Full Court’s statement in Repatriation Commission v Hendy (2002) 76 ALD 47; [2002] FCAFC 424 (“Hendy”) that under s 24(1)(c), the decision maker is required to take into account any factor that plays a part or contributes to a veteran being prevented from continuing to engage in remunerative work. The Full Court in Hendy stated at [37], as quoted by the Tribunal:

The decision-maker is required to consider the effect, contribution and relative weight to be attached to any or all of those factors during the assessment period. … Moreover, having considered any or all of the factors which may have contributed to the veteran’s incapacity, the tribunal is then required to determine whether it is the veteran’s war-caused injury or war-caused disease, or both, alone which prevent the veteran from continuing to undertake remunerative work.

48    The Tribunal then stated that counsel appearing for the respondent had “suggested that there were a number of other factors, not only his accepted war caused conditions which contributed to [the applicant’s] decision to cease remunerative work he had previously been engaged in”, including:

[The applicant’s] 60th birthday on the day of his resignation from Goulburn Ovens; his dissatisfaction with the conduct of students and management practices in the TAFE system; his tiring of weekly commute between the Geelong area and Shepparton; and his wish and that of his wife to be closer to their children and grandchildren.

49    Counsel for the respondent had also “noted reported conversations with doctors in the years preceding his resignation back as far as 2000 that he was considering retirement due to various non-war-caused conditions”.

50    The Tribunal referred to the applicant’s counsel’s submission that the accepted war-caused conditions, particularly the applicant’s “anxiety state”, had had an impact on his inability to work.

51    The Tribunal then discussed medical evidence about why the applicant was unfit for work or could not work. The evidence of two medical witnesses (Dr Hales and Dr Hook) was that the applicant was unfit mainly due to his anxiety condition, while a third medical witness, Dr Velakoulis, a consultant psychiatrist, considered that post-traumatic stress disorder (from which the parties had previously agreed the applicant did not suffer and thus was not an accepted war-caused condition) and alcohol dependence were primary reasons why the applicant could no longer work.

52    The Tribunal stated that it was not satisfied that it was a coincidence that the applicant chose his 60th birthday to cease employment at Goulburn Ovens TAFE, notwithstanding the applicant’s evidence that the two events were unrelated.

53    The Tribunal next considered the two to three week period in mid-2005 when the applicant worked at the Gordon Institute after leaving Goulburn Ovens TAFE. It found that while the applicant’s wish not to continue at Gordon Institute may have been partly due to his accepted war-caused condition of generalised anxiety disorder, he became disillusioned and frustrated at the staff, students and learning environment, as “he apparently discovered that things were not much different” there from at Goulburn Ovens TAFE.

54    Further, the Tribunal noted that the applicant was reported as saying that the position at the Gordon Institute should be reserved for someone younger. The Tribunal appeared implicitly, although not expressly, to find that the applicant made the reported comment, as it observed that it was “an indication that the age factor may have been another reason for ceasing at the Gordon Institute”.

55    The Tribunal stated that it was not satisfied that the applicant sought out the Gordon Institute position after seeing a newspaper advertisement or that he had made a genuine attempt to seek work, “as set out in s 24(2)(b) of the Act”, when he visited the cruise company office in 2005.

56    The Tribunal then referred to the third Flentjar question and stated:

[62]    In respect of question 3, [the applicant] has emphasized the impact of his accepted war-caused conditions on his inability to work. He lodged the application which is the subject of this review in August 2007, more than two and a half years after he had resigned from Goulburn Ovens and more than two years after his short resumption of teaching at the Gordon Institute in mid-2005. He was 62 years old at the start of the assessment period and is now 68 years of age. It is now eight years since he stopped working and he has not undertaken remunerative work since lodging the claim that the Tribunal is reviewing.

57    The Tribunal concluded:

[63]    The Tribunal is not satisfied that [the applicant’s] accepted war-caused disabilities are the sole factors that have prevented him from working for more than eight hours per week during the assessment period. The Tribunal finds that [the applicant’s] age and frustration at the teaching environment were two of the additional factors adding to his decision to stop working. His leave records show that he was a conscientious employee. He did not take time off because of his accepted war conditions except during 2002 when his chest pains were under investigation. The Tribunal finds that [the applicant] ceased work as a trade teacher due to his accepted disabilities but also because of his age.

[64]    The answer to the third Flentjar question is no.

[65]    There is no evidence that [the applicant] has sought any work since turning 65 years in January 2010 (during the assessment period). The Tribunal is not satisfied that he meets s 24(2)(b) of the Act.

the appeal

The amended notice of appeal

58    The applicant’s amended notice of appeal enumerated the following questions of law:

1    Whether the Tribunal misapplied s 24(1)(c) of the Veterans’ Entitlements Act 1986 (Cth) (Act) and the decision in Flentjar v Repatriation Commission (1997) 48 ALD 1.

2    Did the Tribunal fail to accord procedural fairness to the applicant by failing to respond to a substantial, clearly articulated argument that the applicant’s frustration at the teaching environment was an aspect or expression of his inability to cope with trade teaching because of his war-caused psychiatric injury.

3    Whether the Tribunal complied with its statutory duty under s 43(2) of the Administrative Appeals Tribunal Act 1975 (Cth).

59    The applicant’s amended notice of appeal set out the following grounds of appeal:

1    The Tribunal misapplied s 24(1)(c) of the Act and the decision in Flentjar v Repatriation Commission (1997) 48 ALD 1 by asking itself the wrong question and/or identifying a wrong issue when it found that:

(a)    the applicant’s age and frustration at the teaching environment added to his decision to stop working; and

(b)    the applicant ceased work also because of his age,

and these matters were factors that had prevented the applicant from working more than eight hours a week during the assessment period.

2    The Tribunal erred in the application of s 24(1)(c) of the Act in that it:

(a)    failed to enquire into the hypothetical position that would have obtained if the applicant was not incapacitated due to his war-caused disability; and

(b)    erred in using consequences of the applicant’s war-caused disability as a reason to deny entitlement to the special rate of pension.

3    The Tribunal failed to accord procedural fairness to the applicant by failing to respond to a substantial, clearly articulated argument that the applicant’s frustration at the teaching environment was a consequence of his war-caused psychiatric injury.

4    The Tribunal failed to provide adequate reasons for its decision.

Ground 1

The Tribunal misapplied s 24(1)(c) of the Act and the decision in Flentjar v Repatriation Commission (1997) 48 ALD 1 by asking itself the wrong question and/or identifying a wrong issue when it found that:

(a)    the applicant's age and frustration at the teaching environment added to his decision to stop working; and

(b)    the applicant ceased work also because of his age,

and that these matters were factors that had prevented the applicant from working more than eight hours a week during the assessment period.

The parties’ submissions

60    The applicant primarily alleged that the Tribunal failed to understand the requirements of s 24(1)(c) and in particular confused, conflated and misapplied the third and fourth questions in Flentjar, which it was bound to consider and address.

61    Most importantly, the applicant alleged that although the Tribunal held that the third question in Flentjar should be answered “no” it made no findings to support that conclusion. Accordingly, its conclusions did not conform to its findings and betrayed a misapprehension of the statutory tests.

62    The applicant alleged that the Tribunal did not, as required by the third question in Flentjar, consider and determine whether there were other factors which prevented (or contributed to preventing) the applicant, during the assessment period, from continuing to undertake remunerative work that the veteran was undertaking (which it identified as a trade teacher, boiler maker and boat operator). Instead, it discussed only why the applicant had decided to stop working in particular jobs, most significantly, his teaching posts at two different trade colleges and as a boat operator, at a time prior to the commencement of the assessment period, which the Tribunal did not accurately identify.

63    The respondent submitted that the Tribunal correctly understood and applied s 24(1)(c) and the questions in Flentjar.

64    In written submissions, the respondent characterised the applicant’s complaint as the Tribunal’s failure expressly to state that the factors that had caused the applicant to stop working also prevented him from continuing to work. In the respondent’s submission, it was, however, clear that the Tribunal found (although it failed expressly to state) that the factors which caused the applicant to stop working and not genuinely to seek further employment after 21 January 2005, had prevented him from continuing to undertake the relevant work. The findings on those factors thus supported the Tribunal’s answer to the third Flentjar question.

65    The respondent submitted that the “alone” test in the first limb of s 24(1)(c) and the third Flentjar question could be defeated not merely by additional factors that disabled or precluded a veteran from continuing to work but also by reasons, inducements and incentives for the applicant’s election or choice to cease work, even if they were not disabling.

66    The respondent submitted that, in such a context, the applicant’s choice not to work, or to take a step ultimately incompatible with continuing to do so, amounted to a factor preventing him or her from continuing to undertake the relevant work.

67    The respondent conceded that the Tribunal misstated the commencement of the assessment period as August 2007 rather than March 2007. It submitted that, nevertheless, as a matter of substance, the misstatement was counterbalanced by the Tribunal’s other comments, which made clear that it had correctly identified the assessment period. The Tribunal correctly stated that the assessment period began more than two and a half years after the applicant resigned from teaching at Goulburn Ovens TAFE and more than two years after his short resumption of teaching at the Gordon Institute. It also stated that the applicant turned 62 at the start of the assessment period. The respondent submitted that although, in fact, the applicant turned 62 in January, not March, 2007, the minor temporal difference was immaterial.

68    The respondent also submitted that the Tribunal’s failure expressly to refer to factors in the assessment period itself was not material. The Tribunal considered the applicant’s work history at length and it could be assumed that the factors which the Tribunal found caused the applicant to cease work prior to the assessment period were the same factors that continued to be relevant during and throughout the assessment period, “because he didn’t resume work”.

Consideration

69    Section 24(1)(c) may be divided into limbs, each of which are qualified or amplified by other provisions of s 24 (see Forbes at [12]-[16]).

70    The first limb of s 24(1)(c) is:

(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 ...

71    That limb is read subject to the application of s 24(2)(b), which states:

For the purposes 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.

72    Section 24(2)(b) is ameliorative, as a veteran who has not been engaged in remunerative work may still satisfy the alone criterion in s 24(1)(c) if he or she satisfies s 24(2)(b).

73    In Smith v Repatriation Commission (2012) 131 ALD 63; [2012] FCA 1043 (“Smith v Repatriation Commission”), Gordon J described s 24(2)(b) as follows:

[18]    Before turning to its ameliorative effect, some aspects of the section should be noted. It operates when the veteran has not been engaged in remunerative work. Next, if the conditions are satisfied, it operates as a deeming provision. It creates a fiction -- it treats a veteran not engaged in remunerative work as “having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking”.

[19]    Section 24(2)(b) operates to ameliorate the effect of s 24(1)(c) in two important ways:

(1)    it extends the class of veterans entitled to make an application for a pension at the special rate to include veterans who have not been engaged in remunerative work; and

(2)    it provides that the veteran’s war-caused injury or war-caused disease need not be the sole cause but must be a “substantial cause” of his or her inability to obtain remunerative work.

74    In Smith v Repatriation Commission, Gordon J did not accept that s 24(2)(b) was intended to extend to a veteran with a work history (at [41]).

75    The second limb of s 24(1)(c) is:

(c)     the veteran ... 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; …

76    That limb is to be read in conjunction with s 24(2)(a), which provides:

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

...

77    There is a further requirement in s 24(1)(d) that s 25 does not apply to the veteran, which, as was common ground, it did not in this case.

78    The different functions of subparagraphs (b) and (c) of subsection 24(1) were explained by Spender J in Alexander as follows:

[12]    Section 24(1)(b) addresses the severity of incapacity from war-caused injury or war-caused disease. It imposes a requirement, for the special rate of pension with which s 24 is concerned, that the veteran be totally and permanently incapacitated, which is defined by s 24(1)(b) to be an incapacity from war-caused injury or war-caused disease or both to be 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.

[13]    Section 24(1)(b) thus addresses the extent of the veteran’s war-caused incapacity. Section 24(1)(c) is directed at a quite different question, causation. Section 24(1)(c) requires that the veteran’s war-caused incapacity, and only that war-caused incapacity, prevented the veteran from continuing to undertake remunerative work that the veteran was undertaking.

[14]    Section 24(1)(c) is a “sole cause” requirement: the subsection contains the requirement that incapacity from war-caused injury or war-caused disease or both “alone” prevents a veteran from continuing to undertake remunerative work that the veteran was undertaking.

79    Section 19(5C) of the Act requires the respondent to assess the rate or rates of pension which would have been payable to an applicant from time to time during the assessment period. As Gordon J stated in Smith v Repatriation Commission (at [9]), s 19(5C) “introduces the notion that the respondent’s inquiry is restricted to the ‘assessment period’”. The “assessment period” is defined in s 19(9) to mean the period starting on the application day and ending when the claim or application is determined. The “application day” is defined as the day on which the application was received.

80    The words expressing the “alone” test central to the first limb of s 24(1)(c) and the third Flentjar question are, as recognised by Dowsett J in Moorcroft v Repatriation Commission (1999) 58 ALD 143; [1999] FCA 862 (“Moorcroft”), ambiguous, and may either (at 148):

1.    … look to the extent of the war-caused condition to ascertain whether it is actually preventing the veteran from working in his previous employment; or

2.    … exclude a claim, where, notwithstanding such a condition, other factors (including medical conditions) prevent such employment.

81    While Dowsett J preferred the first interpretation (on the basis that the second appeared to leave little room for the impact of s 24(2)(a)), as discussed below, the weight of authority endorses the second interpretation.

82    In Flentjar, Branson J (with whom Beaumont and Merkel JJ agreed) articulated the four questions set out at paragraph 14 above, which are relevant to determining whether the requirements of s 24(1)(c) are satisfied.

83    The Full Court in Flentjar dismissed an appeal from the decision of Spender J, who held that the Tribunal had erred in holding that a veteran had satisfied the requirements of s 24(1)(c) of the Act and was accordingly entitled to a special rate pension.

84    The veteran in Flentjar had retired as a taxi owner/driver aged 54 due to his war-caused irritable bowel condition and had sold both his taxi licence and the cab in 1970. He then worked for a brewery and as a painter until he retired at 62. He applied for a pension for adenocarcinoma of the colon on 7 August 1991 when he was aged 74 years and 11 months. It was not disputed that the veteran had then been, from 7 August 1991 until February 1994, prevented by age limits imposed by the taxi authority from working as a taxi driver. When the authority lifted the restriction to permit persons over 70 to drive a taxi subject to medical fitness, the veteran was over 77 years of age.

85    The Tribunal accepted that the veteran satisfied the requirements of ss 24(1)(a) and 24(1)(b) of the Act. It concluded that he also satisfied s 21(1)(c) because, although aged 77, but for his war-caused disease of irritable bowel, he would have been medically fit and able to obtain a taxi driver’s certificate.

86    Branson J, having identified the four relevant questions, found that the Tribunal did not address the first question and failed to give “proper, genuine and realistic consideration” to the fourth Flentjar question.

87    First, the Tribunal failed clearly to identify the relevant “remunerative work” that the veteran was undertaking, which was a reference to “a type of work which the veteran previously undertook and not to any particular job” (at 4). The failure to address that primary question had, her Honour observed, created ongoing confusion as to the real issues in the case.

88    Secondly, Branson J observed that, as Spender J correctly found, the Tribunal failed to address the crucial issue of whether the veteran (had he been free of his war-caused incapacity) would probably have worked as a taxi driver or taxi owner/driver in the assessment period.

89    Branson J observed that it was not self-evident that, but for his war related incapacities, the veteran would have continued to drive a taxi into his advanced years.

90    Her Honour held the Tribunal failed to give proper, genuine and realistic consideration to the fourth question, “which throws up for consideration the question of what [the veteran] probably would have done if he had none of his service disabilities” (at 5). Branson J noted that if the veteran’s relevant remunerative work were taxi driving, the second question would require consideration of possible impediments being given to his re-entering the workplace as a taxi driver during the assessment period, which commenced when he was almost 75 years of age.

91    Branson J stated (at 5):

[If the veteran’s] war-caused incapacities were the only factors preventing [him] from continuing to undertake the work of a taxi driver or taxi owner-driver, [the fourth question] would involve consideration of whether, having been legally disqualified from driving a taxi for more than 7 years, [he] would have sought to re-enter the workforce as a taxi driver or taxi owner-driver at the age of 77 when such disqualification was lifted.

92    In Forbes Nicholson J observed that Dowsett J’s view (in Moorcroft) that s 24(1)(c) was directed at whether the war caused condition was actually preventing the veteran from working in his previous employment had not been followed in other authorities (at [34]). His Honour stated:

32    In Cavell v Repatriation Commission (1988) 9 AAR 534 at 539, Burchett J agreed with Davies J in Re Easton and Repatriation Commission (1987) 6 AAR 558 at 570–571 the word “alone” should not have substituted for it other words in the absence of ambiguity. He saw the requirement of the word “alone” as it appears in s 24(1)(c) as requiring a practical decision whether the veteran’s loss of remunerative work is attributable to his or her service-related incapacities, and not to something else as well. He regarded that as a decision not to be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide.

33    Burchett J also referred to a statement by the Tribunal in Cavell that it followed from the use of the word “alone” in s 24, that any factor having employment consequences which played a part in the applicant’s inability to work or to obtain and hold remunerative employment, is sufficient to displace the applicant’s case for pension at the special rate. Burchett J regarded that statement as revealing clearly an application of the statutory test in an unexceptional manner to the material in evidence before that Tribunal. Those remarks address the third question identified in Flentjar and are, correctly in my view, relied upon for the respondent in this application. They do not provide support to the applicant’s contentions. Nor do I consider that reference to Repatriation Commission v Strickland (1990) 22 ALD 10 at 18 assists the applicant’s case.

93    Nicholson J also noted that Dowsett J’s preferred approach was dicta and made no reference to Flentjar (at [34]). His Honour noted (at [35]) that Tamberlin J in Jackman v Repatriation Commission (unreported, Federal Court of Australia, Tamberline J, No NG 521 of 1996, 30 June 1997) had endorsed Burchett J’s approach in Cavell v Repatriation Commission (1988) 9 AAR 534.

94    In Turnbull v Repatriation Commission (unreported, Federal Court of Australia, Merkel J, VG 7 of 1996, 21 May 1997), Merkel J held that, as the applicant’s non-war-caused pain and disability played a part in preventing him from engaging in remunerative work, although the war-caused injuries had a more substantial effect, both contributed to his loss of earnings and this warranted refusal of the application under s 24(1)(c) of the Act (at 7).

95    More recently, in Willis v Repatriation Commission (2012) 202 FCR 323; [2012] FCA 399 (“Willis”), Bromberg J stated (at [22]):

Although Dowsett J [in Moorcroft] preferred the first interpretation, the preponderance of authority (which I will follow) supports the second: Cavell v Repatriation Commission (1988) 9 AAR 534 at 538-539; Repatriation Commission v Alexander (2003) 75 ALD 329 at [22]; Repatriation Commission v Van Heteren (2003) 37 ALD 533 at [24]; and generally, Flentjar v Repatriation Commission (1997) 26 AAR 93, and [Repatriation Commission v Hendy (2002) 76 ALD 47].

96    The four questions articulated by Branson J in Flentjar have been endorsed in subsequent authority as embodying the correct approach to the application of s 24(1)(c).

97    In Peacock v Repatriation Commission [2004] FCA 1449 (“Peacock”), for example, Dowsett J regarded consideration of the Flentjar questions essential to the proper application of s 24(1)(c).

98    In Peacock, Dowsett J set aside the decision of the Tribunal, which had found that the veteran did not satisfy s 24(1)(c) of the Act and hence was not entitled to a special pension.

99    In Peacock, the Tribunal, in response to the first Flentjar question, found that the veteran’s previous work was of a clerical or administrative nature. In response to the second Flentjar question, the Tribunal was not satisfied that the veteran was prevented from undertaking such work because of his war-caused injuries or diseases. (Dowsett J held that such a finding appeared inconsistent with the respondent’s concession and the Tribunal’s finding that the veteran satisfied s 24(1)(b), although the latter did not raise an identical question (at [33]).)

100    In Peacock, the Tribunal, in response to the third Flentjar question, found that (even were the second Flentjar question answered positively) the veteran’s war-caused injuries alone did not prevent him from continuing to undertake the work. Dowsett J observed that this conclusion was based on its findings that another factor was that the veteran had decided, in any event, to retire from his contract position, access his superannuation benefit and relocate to Queensland.

101    Dowsett J concluded that the Tribunal had, in several respects, misunderstood both s 24(1)(c) and the Flentjar decision. First, it had apparently considered the situation in 2000 when the veteran ceased work, rather than the claim period (at [33]).

102    More importantly, while the Tribunal’s treatment of the third Flentjar question was probably also affected by the error relating to the claim period, it erred in concluding that the veteran’s access to superannuation benefits was a factor preventing him from continuing to work (at [33]). Dowsett J stated “[s]uch access may be an incentive to retire, but it cannot prevent work” (at [33]).

103    Dowsett J considered that the Tribunal had, under the aegis of the third Flentjar question, probably considered the fourth Flentjar question, which he analysed as follows:

34    The fourth Flentjar question requires a consideration, not of the veteran’s incapacity, but of whether that incapacity is causing a loss of remuneration. In practice that often requires a consideration of whether the veteran, had he not suffered his war-caused conditions, would have been earning remuneration during the claim period. If a veteran has previously stopped work, it may be necessary to ascertain whether that would have occurred irrespective of his incapacity. Much of the discussion at [29] – [32] of the Tribunal’s reasons concerned this question, although the Tribunal’s language suggests that it was there considering the third, and not the fourth, Flentjar question. It concluded, at [31], that one of the reasons for the applicant’s retirement in 2000 was the availability of his superannuation benefits. The Tribunal inferred from this that by the date of claim, he had retired, with no intention of resuming work. It was said to follow that ‘it was not his war-caused injuries or diseases, alone, which prevented him from continuing to undertake his previous remunerative work …’.

(emphasis in original)

104    His Honour reiterated:

35    As I have said, the availability of superannuation benefits may have induced the applicant to retire in 2000, but such availability did not prevent him from performing work in 2004. Further, even if he was not incapacitated for work in 2000, he may well have been so incapacitated by 2004. This aspect of the Tribunal’s reasoning seems to reflect a further misunderstanding of s 24 and of the decision in Flentjar.

36    The Tribunal should have considered whether the applicant would have retired in 2000 or between then and 2004 had he not been suffering the war-caused conditions from which he now suffers, to the extent to which they were then manifest. The applicant claimed that prior to 1997, and until 2000, he coped with his work, but with difficulty. He asserted that Mr Howard had “protected” him by finding work which was within his limited capacity. It is likely that the Tribunal rejected that assertion. However it did not expressly accept or reject the applicant’s claim that he had difficulty in performing his duties and the suggestion that his efforts to do so caused him to experience difficulties in other aspects of his life. The applicant claimed that as a result of these matters, he decided to retire at age 55 when his superannuation benefits became available. If that claim is accepted at face value, two alternative inferences are open. The first is that the opportunity to retire at age 55, with his superannuation benefits was, itself, attractive to him and therefore contributed to his decision to retire at that time, without regard to his war-caused conditions. Such a view might lead to the conclusion that even in the absence of the applicant’s incapacity, he would not have been working for remuneration in 2004. The alternative inference is that early retirement was of no interest to him as such but offered him an opportunity to escape the difficulties which he was experiencing in his work. In that case, the Tribunal might well have inferred that in the absence of his incapacity, the applicant would have been working for remuneration in 2004. It seems, however, that the Tribunal did not directly address the fourth Flentjar question.

(emphasis in original)

105    In my opinion, Dowsett J’s analysis in Peacock is persuasive.

106    It is well established that, in the context of the first Flentjar question, the Tribunal must consider the remunerative work that the veteran was undertaking. Such work “does not mean a particular job with a particular employer but the substantive remunerative work that the veteran had undertaken in the past”: Hendy at [36].

107    The inquiry under s 24(1)(c) is directed at the assessment period, which commences on the day that the application was received.

108    The authorities in my view establish that if there is a non war-caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing, the “alone” test will not be satisfied.

109    However, a factor which prevents or contributes to preventing the veteran from continuing to undertake the remunerative work, but is itself the consequence of the veteran’s war-caused condition, will not constitute an independent preventative factor for purposes of defeating the “alone” requirement in s 24(1)(c).

110    In the present case, the Tribunal recognised that it should consider and determine the questions in Flentjar. It considered and determined the first and second questions.

111    Although the Tribunal did not then expressly state that it would consider the third question in Flentjar, it seems apparent from its preceding citation of and quotations from the authorities of Forbes, Alexander and Hendy, and its answers to the first and second questions in Flentjar, that in paragraphs 51-56 the Tribunal was purporting to carry out the task outlined in Hendy in relation to the third Flentjar question.

112    Accordingly, the Tribunal was required to consider and determine whether there were any factors other than the applicant’s war-caused condition that played a part in, or contributed to, the veteran’s being prevented, during the assessment period commencing on March 2007, from continuing to engage in remunerative work as a trade teacher, boiler maker and boat operator. It was also required, having considered any or all of the factors which contributed to a veteran’s incapacity, to determine “whether incapacity from the relevant condition alone prevents a veteran from continuing to undertake remunerative work”: see Hendy at [37].

113    In the present case, the Tribunal’s ultimately negative answer to the third Flentjar question in paragraph 64 necessarily depended on findings that there were factors other than the applicant’s war-caused conditions that prevented, or contributed to preventing, him from continuing to undertake the relevant remunerative work of a trade teacher, boiler maker and boat operator.

114    Between introducing what was clearly intended to be a discussion of matters relevant to the third Flentjar question and reaching its conclusion on that issue at paragraph 64, the Tribunal, in my opinion, made no finding, expressly or implicitly, that there was any other factor which prevented or contributed to preventing the applicant from undertaking remunerative work. Rather, the Tribunal considered factors which caused or contributed to the applicant’s “decision to cease remunerative work” including some of the matters, such as the applicant’s attaining 60 years of age and his dissatisfaction with the conduct of students and management practices in the TAFE system, referred to at paragraph 54 of its reasons.

115    At paragraph 55, the Tribunal recorded that the applicant’s counsel emphasised that the accepted war-caused conditions, particularly the applicant’s “anxiety state”, had had an impact on his inability to work.

116    The Tribunal did not expressly or implicitly recognise any material distinction between, on the one hand, factors which cause, or contribute to causing, an inability or incapacity to continue to undertake work and, on the other hand, incentives or reasons for the applicant deciding not to continue it. The Tribunal appeared to treat the two concepts interchangeably, or at least, proceeded on the basis that a factor of the latter kind was fatal to the satisfaction of the “alone” test in the third Flentjar question.

117    In my opinion, the Tribunal erred in treating, in the context of the third Flentjar question, a factor acting as an incentive or influencing a decision voluntarily to cease to work as equivalent to a factor which prevents, or contributes to preventing, a veteran from continuing to undertake the relevant remunerative work. As Dowsett J recognised in Peacock, the third Flentjar question concerns the latter, not the former.

118    The language, structure and context of s 24(1)(c), in my view, indicates that contrary to the respondent’s submission, the “alone” test in the first limb is defeasible only by factors additional to the veteran’s war-caused condition which prevent or contribute to preventing, the veteran’s continued undertaking of the relevant work. To prevent an activity, according to its ordinary meaning, is to prohibit, disable or restrain, rather than to induce or provide a reason or incentive for action which a person remains capable of taking. The third Flentjar question, although similar to the question in s 24(1)(b) is not identical. It does not follow that because the requirements of s 24(1)(b) are satisfied, those of the third Flentjar question are also satisfied. The first limb of s 24(1)(c) refers to, an incapacity (from war-caused conditions) which “prevents”. That language indicates a factor which imposes an involuntary barrier to the relevant activity. Whether such an incapacity alone prevents an activity, in my view, necessarily requires consideration of whether there are any other factors which impose an involuntary barrier.

119    The first limb of s 24(1)(c) and the third Flentjar question thus require consideration of whether there are any other factors preventing, in the sense of hindering or disabling, the veteran’s continued undertaking of the relevant work, and not whether there are any other reasons generally for stopping work.

120    The relevance of inducements and incentives voluntarily to decide not to continue to undertake work is, in my view, as Dowsett J held in Peacock, confined to the fourth Flentjar question.

121    In Flentjar and Hendy, the question whether an incentive or inducement voluntarily to cease work despite being capable of continuing did not arise, and was hence not specifically addressed. However, the tenor and reasoning of those authorities support Dowsett J’s analysis in Peacock.

122    In Flentjar, the applicant’s age was, for a part of the assessment period, clearly a factor preventing him from working as a taxi driver, as he was prohibited due to the age limit imposed by the relevant authority. That prohibition was subsequently lifted during the assessment period. The Full Court in Flentjar clearly distinguished between factors which prevented the veteran from undertaking work (such as the age limit) and elective factors which might cause him not to seek work. Branson J noted “the difference between [the veteran’s] capacity to drive at the age of 77 and the likelihood that he would have chosen to do so to produce income” (at 3). Branson J regarded matters of choice as relevant to the fourth question (at 5).

123    In Forbes, Nicholson J did not appear to consider that elective factors would “prevent” a veteran from continuing to work. He considered that “any factor having employment consequences which played a part in the applicant’s inability to work or to obtain and hold remunerative employment, is sufficient to displace the applicant’s case for pension at the special rate” (emphasis added).

124    Similarly, in Hendy, the language and analysis is consistent with the view that the third Flentjar question is focussed on factors which render a veteran unable to work, rather than electing not to do so.

125    In the present case, the Tribunal’s discussion of medical evidence at paragraph 56 left open the possibility that the applicant’s war-caused condition was the main, but not the sole, cause of the applicant being unfit to continue to work. It remained unclear, however, whether the work referred to in the medical evidence was a particular job or the identified occupations.

126    The Tribunal, did not refer again to the medical evidence or determine whether there was a non war-caused medical condition that prevented or contributed to preventing the applicant from continuing to undertake the relevant work.

127    Rather, the Tribunal stated that it was not satisfied (despite the applicant’s evidence that his ceasing work at Goulburn Ovens TAFE was not related to turning 60 years of age) that it was a coincidence that the applicant chose his 60th birthday to cease employment there.

128    The Tribunal’s finding that the applicant chose to cease work at 60 years of age (when he could access certain retirement benefits) was not equivalent to a finding that the applicant’s age was a factor preventing, or contributing to preventing him, from continuing to work.

129    In contrast to Flentjar (where during the assessment period age was initially a factor preventing the veteran from working as a taxi driver), in the present case, there was no suggestion that the applicant’s age prohibited or disabled him from continuing to work, whether in the TAFE colleges in which he was last employed or in the range of occupations identified by the Tribunal in paragraph 49 of its decision.

130    Similarly, the Tribunal’s implicit finding at paragraph 59 that the applicant’s dissatisfaction with the staff, students and teaching at the Gordon Institute and his sentiment that the position (although readily available to persons of the applicant’s age) should be reserved for someone younger, is not tantamount to a finding that his dissatisfaction or his age were factors that prevented the applicant from continuing to work either at the Gordon Institute or in the other relevant occupations. Rather, on a fair reading, the Tribunal did not view the applicant’s age and dissatisfaction as contributing to his inability to continue the work but as reasons for deciding to stop work.

131    The Tribunal noted at paragraph 62 that the applicant had emphasised the impact of his war-caused conditions on his inability to work and at paragraph 63 concluded that it was not satisfied that they were the sole factors that had prevented him from working for more than eight hours per week during the assessment period. However, it immediately thereafter stated that it found that the applicant’s “age and frustration at the teaching environment were two of the additional factors adding to his decision to stop working”. The conjunction of the observations fortifies the conclusion that the Tribunal did not distinguish between factors which prevented (in the sense of disabling) the continuation of work from factors which contributed to a decision not to continue.

132    In my opinion, contrary to the respondent’s submission, the Tribunal’s reference to the applicant’s decision to stop working was not a surrogate finding that the applicant’s age and frustration were factors that prevented him from continuing to undertake the identified remunerative work.

133    That conclusion is fortified by the Tribunal’s observation that the applicant was a conscientious employee who did not take much time off due to his war-caused conditions, which indicates that the Tribunal did not view the frustration as a disabling war-caused condition that prevented the applicant from working but, rather, as a reason why he chose to do so.

134    The Tribunal further concluded in paragraph 63 that the applicant “ceased work as a trade teacher due to his accepted disabilities but also because of his age”. The evidence before the Tribunal, which it had discussed in some detail, established, however, that age was not an impediment to or prohibition on the applicant’s continued employment in the TAFE colleges.

135    The Tribunal’s treatment of the third question in Flentjar, in my opinion, evidenced the same misunderstanding, and largely replicated the same error, as occurred in Peacock.

136    Further, the Tribunal addressed only the reasons for the applicant’s ceasing work as a trade teacher and to some extent as a boat operator. Leaving to one side the distinction between a factor preventing continued work and a factor inducing the veteran to cease work, the Tribunal also failed to address the inquiry to the relevant occupations as required by Flentjar and similar authorities.

137    The Tribunal did not make clear whether the applicant’s frustration at modern teaching conditions and his advancing age (which it identified as additional factors leading it to answer the third Flentjar question “no”) were relevant only to trade teaching (or the particular institutes at which the applicant had been recently employed) or were also relevant to the other two occupations.

138    Further, the Tribunal did not address the situation during the assessment period which commenced in March 2007, as it was required to do. Despite its misstatement of the commencement date, the Tribunal did not significantly mistake the assessment period, but its consideration of relevant factors was limited to those up to and including mid-2005.

139    The Tribunal did not state, and it cannot be assumed, that the factors remained unchanged during the assessment period. As held in Peacock, although particular factors may have induced the applicant to cease work in 2005 it could not be assumed that he was not prevented by war-caused conditions alone from working during the assessment period.

140    If and in so far as, contrary to the above, the Tribunal was purporting to address the fourth, rather than the third, Flentjar question, the Tribunal did not make that clear. It also failed to ask the hypothetical question (discussed below) which on any view applied to the fourth Flentjar question and failed to consider the assessment period or the range of relevant occupations.

141    In my opinion, the error alleged in ground 1 was established.

Ground 2(a)

The Tribunal erred in the application of s 24(1)(c) of the Act in that it:

(a)    failed to enquire into the hypothetical position that would have obtained if the applicant was not incapacitated due to his war-caused disability; …

The parties’ submissions

142    The applicant submitted that the Tribunal erred in failing to pose and address the hypothetical question or comparison of the position which would obtain if the veteran did not have the war-caused incapacity, as required by the authorities. The applicant contended that there was no warrant for restricting the hypothetical question to the fourth question in Flentjar or the second limb of s 24(1)(c).

143    The respondent did not deny that the Tribunal failed to pose the hypothetical question, but contended that it was unnecessary to do so in relation to the first limb of s 24(1)(c) or the third Flentjar question, which appeared to focus on factual matters.

144    The respondent submitted that the reference in Hendy to a hypothetical question was “en-passant” but ultimately appeared to concede that, if there were such a requirement, it applied only to the second limb of s 24(1)(c) and/or the fourth Flentjar question.

Consideration

145    Given my finding in relation to ground 1 of the appeal, the determination of this ground may be unnecessary. As stated above, the Tribunal failed properly to consider the third Flentjar question. The Tribunal did not address the fourth Flentjar question but that may have been necessary had it correctly addressed the third Flentjar question. Nevertheless, for completeness, I consider ground 2(a).

146    In my opinion, contrary to the respondent’s submission, the hypothetical question is also applicable, potentially at least, to the third Flentjar question and the first limb of s 24(1)(c). It is clearly relevant to the fourth Flentjar question.

147    The hypothetical question was described by Beaumont J (with whom Northrop and Spender JJ agreed) in Repatriation Commission v Smith (1987) 15 FCR 327 (“Repatriation Commission v Smith”).

148    In Repatriation Commission v Smith, the Tribunal held that a 71 year old veteran who had retired as a foreman-plumber when aged 63 and applied for a special pension when aged 69, satisfied the requirements of s 24(1)(c). The Tribunal accepted that the veteran retired when, due to retrenchment of other staff, he could no longer work only as a foreman and felt unable, due to war-caused incapacity, to perform heavier manual work. The Tribunal nevertheless concluded that the veteran could have sought and obtained lighter casual plumbing work which was available to older workers.

149    The Full Court held that the Tribunal erred, as it applied the wrong standard of proof.

150    Beaumont J, in that context, stated at 337:

As has been said, the question posed by s 24(1)(c) is one of hypothetical fact. The Tribunal must attempt an assessment of what the respondent probably would have done if he had none of his service disabilities. The starting point is an examination of the prospects of employment, including self-employment, in southern Tasmania in early 1985 for a healthy sixty-nine-year-old plumber. …

It may be accepted that it was open to the Tribunal to find that on retirement from employment at sixty-five years, some plumbers seek casual work elsewhere. But it does not, of course, necessarily follow that the respondent would have done so.

151    The influential reference to the hypothetical question in Repatriation Commission v Smith was, in the context of that case, potentially applicable to both the third and the fourth questions in Flentjar as it went to the probable availability of work and the likelihood that the veteran would seek it.

152    Nor did Full Court in Hendy restrict the application of the hypothetical question to the fourth Flentjar question or the second limb of s 24(1)(c).

153    In Hendy, the Full Court allowed an appeal from the decision of the primary judge, who held that the Tribunal erred in failing to consider the veteran’s last work as a part-time, “light duties”, truck driver, which should have precluded its conclusion that his war-caused post-traumatic stress disorder prevented him from undertaking remunerative work.

154    The primary judge thought that the Tribunal also erred by relying on labour market forces to defeat the veteran’s claims, as in the circumstances, the veteran’s difficulty in re-entering the labour market at an advancing age after a long absence was a mere consequence of his service-related disability.

155    The Full Court held that, contrary to the decision of the primary judge, the Tribunal was entitled to hold that a veteran did not satisfy s 24(1)(c). The Full Court considered that the Tribunal was entitled, on the evidence, to conclude that even without his knee condition (which was not war-caused) the veteran was incapable of undertaking remunerative work for more than eight hours per week, thus satisfying s 24(1)(b). It also found, however, under s 24(1)(c), that the knee condition was an additional factor preventing the veteran from continuing to undertake the remunerative employment. While acknowledging that the veteran’s knee condition could have supported a different conclusion, the Full Court found that the Tribunal’s conclusion was open to it (at [35]).

156    The Full Court did not consider that, on a fair reading of the Tribunal’s reasons, the labour market forces identified as preventing the veteran from obtaining work were merely a consequence of his war-related conditions. Accordingly, it had not erred in relying on that factor to defeat the veteran’s claim.

157    The Full Court observed at [37]:

The consideration of what a veteran would probably have done, absent the service disabilities, is a hypothetical exercise. The language of s 24(1)(c) of the Act directs attention to the question of whether incapacity from the relevant condition alone prevents a veteran from continuing to undertake remunerative work. The provision does not contemplate that other factors are only to be taken into account if they, of themselves, prevent the veteran from working. The decision-maker is required to take into account any factor that plays a part or contributes to a veteran’s being prevented from continuing to engage in remunerative work. If a period of time elapses after a veteran ceases remunerative work and before the commencement of the assessment period, lack of recent work experience, time out of the workforce and increasing age will be relevant for consideration under s 24(1)(c) of the Act. The decision-maker is required to consider the effect, contribution to, and relative weight to be attached to any or all of those factors during the assessment period. So long as the tribunal performs this exercise, the conclusions drawn from the assignment of the relative impact the various factors on the ability of the veteran to continue in remunerative work is not reviewable, except in exceptional circumstances. Moreover, having considered any or all of the factors which may have contributed to a veteran’s incapacity, the tribunal is then required to determine whether it is the veteran’s war-caused injury or war-caused disease, or both, alone which prevent the veteran from continuing to undertake remunerative work. Error on the part of the tribunal is determining whether the veteran’s war-caused injury or war-caused disease is the sole determinant in the prevention of continued remunerative work is, similarly, not open to review.

(emphasis in original)

158    The Full Court in Hendy did not limit its introductory observation at paragraph 37 that “[t]he consideration of what a veteran would probably have done, absent the service disabilities, is a hypothetical exercise” to any particular Flentjar question or limb of s 24(1)(c). Hendy itself was a case in which the fourth Flentjar question was not considered as it was unnecessary to do so (given that the “alone” test in the third Flentjar question was not satisfied). The discussion at paragraph 37 indicates that the Full Court had in mind the first limb of s 24(1)(c) and/or third Flentjar question, particularly in a context where the veteran (who had been out of the workforce for some time before the commencement of the assessment period) had a consequent lack of recent work experience and advancing age.

159    Hendy thus recognises that where, at the commencement of the assessment period, the veteran has already been out of the workforce for some time, whether factors such as lack of recent experience or advanced age during the assessment period should be treated as defeating the alone test may depend on an assessment of what the veteran would have done prior to the assessment period but for his war-caused illness, which is necessarily hypothetical. If, for example, the veteran would not have left the workforce or moved to a different area but for the war-caused condition, such factors would be a consequence of the condition rather than an independent preventative factor.

160    In Byrne v Repatriation Commission [2001] FCA 1134 (“Bryne”), Gyles J took the view that the hypothetical question was applicable to the third Flentjar question (at [11]). Gyles J allowed an appeal from the Tribunal’s decision that the veteran did not satisfy s 24(2)(b) and hence s 24(1)(c), as his “war-caused disabilities were not the substantial cause of his inability to work”.

161    Gyles J noted that there were “real difficulties in construing s 24(2)(b) of the Act, whether alone or in conjunction with s 24(1)(c)”(at [6]).

162    His Honour stated that the only issue he addressed in the case was whether incapacity from war-caused injury or disease was the substantial cause of the veteran’s inability to work (at [6]).

163    Gyles J went on to state that the Tribunal had counted against the applicant the high unemployment in an area to which he had moved as a consequence of his war-caused disease (at [8]).

164    Gyles J stated at [10]:

In order to judge the effect of the incapacity, it is necessary to compare the position of the [veteran] as he is with the position he would be in without without the relevant incapacity. … That process enables the true effect of war-caused incapacity upon the ability of the applicant to obtain work to be assessed.

165    Gyles J recognised that although Flentjar concerned s 24(1)(c) rather than s 24(2(b), the third Flentjar question was similar, although not identical to the issue before him. His Honour did not read Branson J’s discussion in Flentjar as excluding “what is described as a hypothetical exercise” in relation to the third Flentjar question (at [11]). Gyles J considered that in substance, the same error occurred in Byrne as in Flentjar, albeit in relation to different provisions, as in each case the decision-maker failed to compare the position that the veteran was in with the position he would be in without the relevant incapacity.

166    In Tomlin v Repatriation Commission (unreported, Federal Court of Australia, Whitlam J, NG 950 of 1995, 1 August 1997) (“Tomlin”), the issue was what elections or choices the veteran would have made in any event, as opposed to the factors which prevented or contributed to preventing him from working. Whitlam J found no error in the Tribunal’s conclusion that the veteran failed to satisfy s 24(1)(c) in circumstances where although, except for his war-caused disabilities, he could have continued to obtain work as a hospital porter at the age of 68 (when he lodged his application), he would probably not have continued to work in any event, because he would have retired and moved to a different area.

167    Whitlam J considered that the “hypothetical fact” referred to in Repatriation Commission v Smith did not relate to an imagined life for “the hypothetical man”, but to the particular veteran, and “[t]he Tribunal was bound to engage in speculation as to what the applicant would have done at the application date if he had none of the war-caused disabilities” (at 2).

168    In Forbes, Nicholson J referred to the statement in Repatriation Commission v Smith (at 337), “… the question posed by s 24(1)(c) is one of hypothetical facts” but considered that it was dicta, relevant to the “second limb” of subparagraph (1)(c) and the fourth question identified in Flentjar” (at [31]).

169    Analysis of the relevant authorities nevertheless, in my view, indicates that the hypothetical question is not limited to the fourth question or the second limb of s 24(1)(c). The hypothetical comparison may be less consistently relevant to the third question, but will clearly be so where factors such as having been long out of the workforce prior to the assessment period could play a causal role in preventing the veteran from working during the assessment period. If the veteran would not have been out of the workforce but for the war-caused illness, that factor should not be treated as an independent preventative factor to defeat the “alone” requirement.

170    In the present case, although the applicant had been out of the workplace for years prior to the assessment period, the Tribunal, while purporting to discuss the third Flentjar question, considered factors which contributed to the applicant’s decision to stop work in 2005 and it did not address the assessment period. Accordingly, the possibility that advancing age and lack of recent experience were additional preventative factors did not arise. The Tribunal’s failure to ask the hypothetical question in relation to the third Flentjar question to which it was potentially relevant or in relation to the fourth Flentjar question (which it did not consider) was a consequence of, and was subsumed in, its antecedent error in relation to the third Flentjar question identified in ground 1.

171    In my opinion, the allegation in ground 2(a) is established.

Grounds 2(b) and 3

(2)    The Tribunal erred in the application of s 24(1)(c) of the Act in that it:

    …

(b)    erred in using consequences of the applicant’s war-caused disability as a reason to deny entitlement to the special rate of pension.

(3)    The Tribunal failed to accord procedural fairness to the applicant by failing to respond to a substantial, clearly articulated argument that the applicant’s frustration at the teaching environment was a consequence of his war-caused psychiatric injury.

172    Grounds 2(b) and (3) may be conveniently considered together.

173    The authorities establish that a consequence of a war-caused condition may not be relied on to exclude a veteran from satisfying the alone test in s 24(1)(c).

174    Under ground 2(a), the applicant alleged in essence, that the Tribunal fell into that error by relying on the applicant’s frustration to defeat the “alone” requirement.

175    Under ground 3, the applicant submitted that the Tribunal’s failure to consider and address his material submission that his frustration was a consequence of his war-caused condition, together with the evidence in support, constituted a denial of procedural fairness.

176    In my opinion, ground 2(a) is not established, as there is no basis on which the Court can conclude that the applicant’s frustration was the consequence of his war-caused condition. It seems apparent that the Tribunal did not treat the frustration as a consequence of the war-caused condition, albeit it did not make an express finding.

177    The respondent did not appear, however, to dispute that the Tribunal failed expressly to address the applicant’s argument that his frustration was a consequence of his war-caused disability. Rather, the respondent submitted that it could be inferred from the reasons that the submission was considered, but not accepted.

178    As I understood the respondent’s submission, the Tribunal’s consideration of the applicant’s submission and evidence could be inferred from its finding (at [51]) that there are also “other factors to be taken into account in relation to [the applicant’s] employability apart from his accepted war-caused conditions” and went on to observe that he was a conscientious employee, his incapacity from accepted conditions was not such that he required regular sick leave and that age played a part in his decision not to continue working. The respondent further submitted that the Tribunal addressed the factual matters set out by the applicant.

179    The respondent submitted that the Tribunal’s consideration of the applicant’s submission on frustration was demonstrated by its observation at paragraph 55 that:

Ms Spencer, appearing for [the applicant], emphasized the impact of his accepted war-caused conditions on his inability to work. She emphasised the deterioration in [the applicant’s] anxiety state, during 2004 in particular.

180    The respondent also relied on paragraph 59 where the Tribunal stated:

[The applicant] worked for two-to-three weeks in mid-2005 at the Gordon Institute at the invitation of his a [sic] former colleague, Mr Dixon. [The applicant] said that he found the work difficult and did not want to continue, this may well have been partly due to his accepted condition of generalised anxiety disorder. However, having become disillusioned and frustrated by staff, students and the learning environment at Goulburn Ovens, he apparently discovered that things were not much different at the Gordon Institute. [The applicant] was reported as saying that the position should be reserved for someone younger, an indication that the age factor may well have been another reason for ceasing at the Gordon Institute.

181    Finally, the respondent submitted that any failure to consider the submission in relation to frustration would have no effect given the Tribunal’s finding that the applicant elected to retire at age 60 and age could not be said to be a war-caused factor.

182    The relevance of this ground of appeal is overtaken by my findings in relation to grounds 1 and 2(a).

183    Nevertheless, for completeness, I observe that there is a distinction between the Tribunal’s failure to accept the applicant’s frustration as part of his war-caused condition (which can perhaps be inferred) and its failure to consider the applicant’s submissions and evidence on that question. In my opinion, the Tribunal’s above observations were too oblique and equivocal to establish that the Tribunal recognised and considered the applicant’s submissions and associated evidence in relation to the applicant’s frustration.

184    In my opinion, the allegation in ground 2(b) was not established.

185    In my opinion, the allegation in ground 3 was established.

Ground 4

The Tribunal failed to provide adequate reasons for its decision.

186    Section 43 of the AAT Act provides:

43    Tribunal’s decision on review

…

Tribunal must give reasons for its decision

(2)    Subject to this section and to sections 35 and 36D, the Tribunal shall give reasons either orally or in writing for its decision.

(2A)    Where the Tribunal does not give reasons in writing for its decision, a party to the proceeding may, within 28 days after the day on which a copy of the decision of the Tribunal is given to that party, request the Tribunal to give to that party a statement in writing of the reasons of the Tribunal for its decision, and the Tribunal shall, within 28 days after receiving the request, give to that party such a statement.

(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.

187    In Willis, Bromberg J summarised the effect of relevant authority on s 43(2) of the AAT Act and stated:

11    A more expansive observation about the content and purpose of the duty to provide adequate reasons was given in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, where at [69] McHugh, Gummow and Hayne JJ (with whom Gleeson CJ agreed) said:    

It ensures that a person who is dissatisfied with the result at which the Tribunal has arrived can identify with certainty what reasons the Tribunal had for reaching its conclusion and what facts it considered material to that conclusion. Similarly, a court which is asked to review the decision is able to identify the Tribunal’s reasons and the findings it made in reaching that conclusion.

12    The requirements of s 430 of the Migration Act 1958 (Cth) with which the Court was there dealing with are broadly similar to those of s 43(2B) of the AAT Act. A number of decisions of this Court have applied the reasoning of Yusuf to s 43(2B) of the AAT Act: see the cases cited in [Civil Aviation Safety Authority v Central Aviation Pty Ltd (2009) 253 ALR 263] at [29].

13    The authorities have also made some cautionary remarks. It would be wrong for the courts to construe reasons in any overly critical spirit: ARM Constructions Pty Ltd v Deputy Commissioner of Taxation (1986) 10 FCR 197 at 203-204 (Burchett J). Reasons should not be construed in an over zealous fashion: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 (Brennan CJ, Toohey, McHugh and Gummow JJ). The Court ought not be concerned merely with looseness in language or with unhappy phrasing: Oak Valley (Maralinga) Inc v Aboriginal and Torres Strait Islander Commission (1999) 98 FCR 1 at [22] (O’Loughlin J). There is no requirement that reasons provide an unarguable logical progression to a conclusion: Repatriation Commission v Hendy (2002) 76 ALD 47 at [39] (Whitlam, Emmett and Stone JJ).

14    In Our Town FM Pty Ltd v Australian Broadcasting Tribunal (1987) 16 FCR 465, Wilcox J applied what he called the homespun test of Woodward J stated in Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500. His Honour noted that what is required is that the decision-maker articulate the reasons for the decision, including by providing an explanation or particulars of the conclusions reached: at [481]-[483]. In Oak Valley at [26], O’Loughlin J held that it was insufficient for a decision-maker simply to set out the conclusions which had been reached without identifying the findings of fact that it made during the course of those deliberations.

188    In the present case, the Tribunal’s answer to the third Flentjar question did not follow from its findings. While that was probably the result of an erroneous conflation of the requirements of the third and fourth Flentjar questions, the Tribunal did not sufficiently explain its reasoning to admit of certainty on that question. The Tribunal did not make clear whether it deemed it unnecessary to address the fourth Flentjar question and if not, why not. To the extent that it purported to address the second limb of s 24(1)(c) by reference to s 24(2)(a), as Dowsett J recognised in Moorcroft, acceptance of the now predominant view of the first limb of s 24(1)(c) gives little effect to s 24(2)(a). Moreover, the Tribunal merely stated a bald conclusion and did not expose its reasoning or stated on which of the alternative criteria in s 24(2)(a) it relied.

189    It follows from the foregoing that, in my opinion, the Tribunal’s reasons were inadequate, as they fail sufficiently to demonstrate how it dealt with and addressed the third and fourth questions in Flentjar.

190    In my opinion, the error alleged in ground 4 is established.

conclusion

191    The appeal should be is allowed.

192    The respondent should pay the applicant’s costs of the appeal.

Associate:

Dated:    25 March 2014