FEDERAL COURT OF AUSTRALIA

McKenzie v Repatriation Commission (No 2) [2014] FCA 1007

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The decision of the Administrative Appeals Tribunal made on 11 April 2013 be set aside and in lieu thereof:

(a)    it be declared that the veteran’s death was war-caused within the meaning of s 8 of the Veterans’ Entitlements Act 1986 (Cth); and

(b)    it be ordered that the Respondent pay the Applicant a widow’s pension pursuant to the Act with effect from 7 July 2009.

3.    The Applicant’s costs of the appeal, including reserved costs, be paid by the Respondent.

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

REASONS FOR JUDGMENT

A.    INTRODUCTION

1    This judgment concerns the question of relief in a claim made by the applicant, Dawn McKenzie, for a widow’s pension under the Veterans’ Entitlements Act 1986 (Cth) (“the Act”). The respondent, the Repatriation Commission (“Commission”), opposes Mrs McKenzie’s application.

2    I handed down reasons for judgment on 25 July 2014 (“the earlier reasons”) in which I found for Mrs McKenzie on the question or questions of law before the Court (McKenzie v Repatriation Commission [2014] FCA 777). In the earlier reasons I set out my preliminary view that if the matter is remitted to the Tribunal for rehearing only one result is reasonably open, and that the Court should make a factual finding under s 44(7) of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”). These reasons must be read in conjunction with the earlier reasons.

3    I directed the parties to provide further submissions as to relief and in particular to provide submissions on the following questions:

(a)    What if any factual assessment or finding is necessary before the Court (or the Tribunal) may now form an opinion on whether SoP No 41 upholds the asserted hypothesis?

(a)    Whether sufficient evidence is presently before the Court to allow it to make the necessary factual assessment or finding?

(b)    Whether the Court should order that some of the evidence before the Tribunal, and if so what parts of it, be placed before the Court?

(c)    What is the precise scope of the remaining necessary factual enquiry?

(d)    Given the Tribunal’s statement at [63], if step 3 of the decision-making process described by the Full Court in Repatriation Commission v Deledio (1998) 83 FCR 82 (“Deledio”) at 97-98 (“the Deledio process”) is decided in favour of Mrs McKenzie are there any other matters necessary to be decided before the claim can be finalised?

CONSIDERATION

4    I will address the issues by reference to the parties’ submissions on these questions.

What if any factual assessment or finding is necessary before the Court (or the Tribunal) may now form an opinion on whether SoP No 41 upholds the asserted hypothesis?

5    At [71]-[72] of the earlier reasons, in addressing whether the Tribunal had misapplied s 120(3) of the Act, I said:

[71]    … In my view:

(a)    Mrs McKenzie’s evidence that Mr McKenzie told her that he smoked 10-15 cigarettes per day which commenced while he was on operational service and continued until about 1952;

(b)    Janene McKenzie’s evidence that Mr McKenzie told her that he was a “keen smoker”, that he smoked anything that he could get his hands on, that on his return from service he smoked at work to the point that it was inconvenient, and that he smoked “a lot”; and

(c)    the evidence in Mr McKenzie’s letters home of his consumption of cigarettes and other tobacco products while he was on service;

clearly points to or raises that Mr McKenzie consumed five pack years of cigarettes or other tobacco products which is the minimum provided by SoP No. 41. In my view the Tribunal’s decision that the material before it did not point to that conclusion was made on the facts as found by it and not on the facts as raised by the evidence.

[72]    Further, in my view the Tribunal’s conclusion that there was “no material” was plainly wrong. Although the Tribunal ascribed little value to it, there was evidence by Mrs McKenzie, supported by the evidence of Janene McKenzie and Mr McKenzie’s letters, which pointed to his having smoked five pack years of cigarettes or other tobacco products. Taking into account all of the evidence before the Tribunal the conclusion that there was no material pointing to his having done so was not reasonably open to it: see Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 451 per Gleeson CJ, Gummow and Callinan JJ.

6    Mrs McKenzie points to these paragraphs and submits that no further factual finding by the Tribunal could displace my conclusion that there is material pointing to Mr McKenzie having consumed five pack years of cigarettes or other tobacco products, which is the minimum provided by SoP No 41. She argues that, given these conclusions, no further factual finding or assessment is necessary.

7    The Commission submits that it follows from my conclusions that the hypothesis raised by Mrs McKenzie fitted within the applicable SoP, and was therefore a reasonable hypothesis under s 120(3) of the Act. The Commission contends however that the Court could only properly form that factual conclusion “after consideration of the whole of the material before it”: s 120(3) of the Act; Collins v Administrative Appeals Tribunal and Another (2007) 163 FCR 35 (“Collins”) at [48(e)] per Allsop J (approved by Lindgren and Emmett JJ). In this submission the Commission seems to contend that my conclusions are erroneous on the basis that they were made without the benefit of considering the whole of the material before the Tribunal.

8    The Commission argues that the matter must be remitted to the Tribunal to allow a decision to be made following consideration of all of the evidence.

9    I do not accept Mrs McKenzie’s contention that no further factual finding is necessary. My conclusions were expressed in setting out my view that the Tribunal had misapplied s 120(3) of the Act (and step 3 of the Deledio process) and I expressly left open (at [83]) the question of whether the Court should make factual findings under s 44(7) of the AAT Act.

10    However, as I will explain, I consider the Court should make a factual finding under s 44(7) for reasons that include those which underpinned my conclusions at [71]-[72] of the earlier reasons.

Whether sufficient evidence is presently before the Court to allow it to make the necessary factual assessment or finding?

11    The Commission contends, and I accept, that s 120(3) of the Act mandates consideration of the “whole of the material” before the decision-maker. It argues that a decision based on less than the whole of the material would fail to meet this legislative requirement.

12    It contends that there were 39 items of evidence before the Tribunal and says that Part C of the Appeal Book contains only a small subset of that material. The Commission submits that “the whole of the material” and “the unique qualities of [the] evidence in a viva voce context” including “the demeanour of [Mrs McKenzie] and the flow of cross-examination and examination in chief” are not before the Court.

13    The thrust of the Commission’s contention is that, unless the whole of the material that was before the Tribunal is before the Court, the Court will fall into error if it makes a factual finding under s 44(7).

14    I do not accept this contention. Firstly, the Commission advances no authority in support of it. Subsections 44(7) and (8) of the AAT Act provide:

Federal Court may make findings of fact

(7)    If a party to a proceeding before the Tribunal appeals to the Federal Court of Australia under subsection (1), the Court may make findings of fact if:

(a)    the findings of fact are not inconsistent with findings of fact made by the Tribunal (other than findings made by the Tribunal as the result of an error of law); and

(b)    it appears to the Court that it is convenient for the Court to make the findings of fact, having regard to:

(i)    the extent (if any) to which it is necessary for facts to be found; and

  (ii)    the means by which those facts might be established; and

(iii)    the expeditious and efficient resolution of the whole of the matter to which the proceeding before the Tribunal relates; and

(iv)    the relative expense to the parties of the Court, rather than the Tribunal, making the findings of fact; and

(v)    the relative delay to the parties of the Court, rather than the Tribunal, making the findings of fact; and

(vi)    whether any of the parties considers that it is appropriate for the Court, rather than the Tribunal, to make the findings of fact; and

  (vii)    such other matters (if any) as the Court considers relevant.

(8)    For the purposes of making findings of fact under subsection (7), the Federal Court of Australia may:

(a)    have regard to the evidence given in the proceeding before the Tribunal; and

  (b)    receive further evidence.

15    As Branson J said in Comcare v Etheridge (2006) 149 FCR 522 at [17] the power is:

…available to be exercised after the Court has given consideration to the questions of law which constitute the subject matter of the appeal. If the answers to those questions, or any of them, lead to relief being granted to the applicant, the limited power to find facts which is vested in the Court by s 44(7) may be exercised, where it is convenient to do so having regard to the factors identified in the subsection, to avoid the need for the matter to be remitted to the Tribunal for further consideration.

16    The power to make factual findings is only to be exercised in the limited circumstances described in s 44(7), but these circumstances do not include any requirement to have the same evidence before the Court as was before the Tribunal. It does though include a requirement that the evidence be sufficient to make the finding.

17    Secondly, in an effort to address any evidentiary deficiencies I directed the parties to provide submissions as to whether some of the evidence before the Tribunal should be placed before the Court, and if so what parts of the evidence. Notwithstanding the direction, other than in respect of two matters of little significance, the Commission did not identify any evidence of significance that was before the Tribunal and is not before the Court. That is, given an opportunity to identify the evidence which indicated that it was inappropriate for the Court to make a factual finding under s 44(7) the Commission failed to do so. It simply reiterated its argument that it is necessary for all of the evidence to be before me.

18    I see it as likely that the Commission took this approach because there was little or no evidence of significance regarding Mr McKenzie’s cigarette or tobacco product consumption that is not before the Court. The quantity of Mr McKenzie’s consumption of cigarettes and other tobacco products was central in the hearing before the Tribunal. The Tribunal set out a detailed summary of the evidence (at [5]-[24]) which is before me.

19    The transcript of the relevant parts of Mrs McKenzie’s examination in chief and cross examination on 11 February 2013, which includes cross-examination recording her earlier evidence on 3 November 2011, is in Part C of the Appeal Book. Her evidence as to the number of cigarettes Mr McKenzie smoked per day was uncertain and inconsistent but she expressly testified at one point that Mr McKenzie told her that he smoked 10 to 15 cigarettes per day. I note in passing that Mrs McKenzie’s evidence should be seen in the context that she suffered a stroke in 2007 and relevantly related to conversations she had with her now deceased husband many decades earlier.

20    Given the availability of the transcript I can see nothing in the Commission’s point that “the flow of cross-examination and examination in chief” is not before me. I accept the Commission’s submission that the medical evidence is not, but there is no dispute as to that evidence. There is no dispute that Mr McKenzie died of cardiomyopathy to which his treatment for oesophageal cancer contributed.

21    Nor do I see it as significant that I have not had the benefit of observing Mrs McKenzie’s demeanour in the witness box. The Tribunal did not base any of its conclusions on Mrs McKenzie’s demeanour and in my view nothing turns on it.

22    I note that in Byrne v Repatriation Commission (2007) 97 ALD 359 (“Byrne”) at [4]-[6] Gyles J considered it inappropriate for a judge to make factual findings pursuant to s 44(7) of the AAT Act in circumstances where there was minimal evidence before court on the issue in question. His Honour also noted that, if determination of the relevant factual finding is remitted to the Tribunal rather than determined by the Court, the parties may be able to adduce fresh evidence on the matter. His Honour said:

In my opinion, the matter should be remitted to the Tribunal for decision. … I do not consider that this Court can, or should, make factual findings pursuant to s 44(7) in this appeal based upon snippets of evidence which were not directed to the issue in question. The Tribunal could well take the view that, if the hypothesis in question is to be properly considered, it should receive fresh evidence directed to it.

23    However the case before me is not akin to Byrne. Mrs McKenzie has twice been required to give evidence of the relevant conversations and should not be required to do so again. No other “fresh” evidence is available. This is not a case where only “snippets” of the evidence is before the Court.

24    It is likely that all available evidence of significance regarding the extent of Mr McKenzie’s cigarette and tobacco consumption is before me. I say this because of the Tribunal’s detailed summary of evidence and because, given the opportunity to identify the evidence that was not before the Court, the Commission did not identify any evidence of significance.

25    Thirdly, the Commission apparently misunderstands the decision-maker’s task at step 3 of the Deledio process. The Commission contends that the Court will be making “factual findings in a dark hole” if it does so in the absence of “the unique qualities of [the] evidence in a viva voce context” including “the demeanour of [Mrs McKenzie]”. However, it is not the task of the Tribunal at step 3 to make assessments of the demeanour of witnesses, evaluate their evidence, and resolve any inconsistencies or contradictions in the evidence. As Lindgren J said in Collins at [8] resolution of evidentiary conflict is impermissible in step 3.

26    The task of the decision-maker at step 3 is to form an opinion as to whether the material before it points to or raises Mr McKenzie having consumed the required minimum quantity of five pack years of cigarettes or other tobacco products. The Commission’s contentions boil down to the proposition that the decision-maker is required at step 3 to decide whether to believe Mrs McKenzie’s evidence that Mr McKenzie told her that he smoked 15 to 20 cigarettes per day.

27    However, “belief” is not to be addressed at step 3. If it was there is a risk that the decision-maker would rule against a claim because he or she was not persuaded that the evidence is true. That would defeat the protection for veterans and their dependents provided by the reverse criminal standard of proof in s 120(1) of the Act: Dixon v Repatriation Commission (1999) 59 ALD 315 at [25] per Wilcox J.

Is it appropriate to make a factual finding under s 44(7) in the present circumstances?

28    In my view, to use the expression in the AAT Act, it is “convenient” for the Court to make a factual finding in relation to step 3 of the Deledio process.

29    First, the evidence has been fully traversed by the Tribunal and there is little dispute between the parties as to the primary facts. The dispute really goes to the conclusions to be drawn from those primary facts. While the finding that I will make is inconsistent with the conclusion drawn by the Tribunal, I consider that conclusion arose from its erroneous view of the law.

30    Second, having regard to subs 44(7)(b)(i), in my view a factual finding is necessary as my earlier conclusions were expressed in identifying the Tribunal’s error of law rather than as a factual conclusion.

31    In Repatriation Commission v Butcher (2007) 94 ALD 364 at [19] the Full Court examined the exercise of discretion under s 44(7) of the AAT Act. The Full Court held that:

… In cases where a wrong principle has been applied by an administrative tribunal, it will generally follow that the matter should be referred back, except in cases where it would be futile to do so or where there could be no other outcome.

For the reasons that underpinned my conclusions at [71] of the earlier reasons I consider the evidence plainly points to or raises that the asserted hypothesis fits within the template of SoP No 41. On my view of the present case there is only one outcome reasonably open if the matter is referred back to the Tribunal.

32    Third, having regard to subs 44(7)(b)(ii), the facts underpinning the finding are clear. The Court has before it:

(a)    the transcript of Mrs McKenzie’s examination and cross examination as to what Mr McKenzie told her about his consumption of cigarettes and other tobacco products;

(b)    the Tribunal’s detailed summary of the evidence as to Mr McKenzie’s consumption of cigarettes and other tobacco products, particularly:

     (i)    Mrs McKenzie’s evidence as to what Mr McKenzie told her;

     (ii)    Janene McKenzie’s evidence as to what her father told her; and

     (iii)    contemporaneous letters from Mr McKenzie to his family.

I note again that the Commission did not identify any significant evidence that is not before me.

33    In Hall v Repatriation Commission [2007] FCA 2109 (“Hall”) at [2]-[4] Gyles J emphasised, and I accept, that a cautious approach is appropriate when deciding whether to exercise the discretion under s 44(7) of the AAT Act. But, as his Honour explained, in cases where the findings of primary fact have already been made by the Tribunal a finding of fact that is made by a court is often likely to be a “benign use of s 44(7)”.

34    In the present case the findings of primary fact are largely before me in the Tribunal’s summary of the evidence, and the factual assessment involved in deciding that this points to or raises the asserted hypothesis fitting the template in SoP No 41 is a conclusion based on those findings. In these circumstances there is no absence of caution in exercising the discretion.

35    Fourth, having regard to subs 44(7)(b)(iii), (iv) and (v), there can be no question that the expeditious and efficient resolution of the whole of the matter will be best achieved if the court makes the necessary findings of fact. Nor can there be any question the Court making the finding, rather than the Tribunal, will reduce the expense to the parties and reduce delay: Hall at [4].

36    Mrs McKenzie’s claim has been heard by the Tribunal on two occasions already, and on each occasion Mrs McKenzie has been successful in an appeal to the Court. The expense to the parties and the delay in the resolution of the matter will be substantially reduced if the Court makes the necessary finding of fact.

37    Fifth, having regard to subs 44(7)(b)(vi), the applicant seeks that the Court and not the Tribunal should make the necessary finding.

38    Although it really involves mixed questions of fact and law, to the extent that step 3 of the Deledio process involves a factual assessment it is appropriate to find, pursuant to s 44(7), that the hypothesis asserted by Mrs McKenzie fits within the template of SoP No 41. It is common ground that the asserted hypothesis fits within the template of SoP No 23 and it therefore fits within both applicable SoPs. Step 3 of the Deledio process is to be decided in favour of Mrs McKenzie.

39    The Tribunal held at [63] of its decision that, had the asserted hypothesis fitted within the applicable SoPs, it would not have been satisfied beyond a reasonable doubt that Mr McKenzie’s death was not war-caused. In those circumstances, both parties accept that step 4 of the Deledio process must be decided in favour of Mrs McKenzie.

40    Therefore Mrs McKenzie is eligible for a widow’s pension under the Act. I make the orders that she seeks.

Associate:

Dated:    16 September 2014