FEDERAL COURT OF AUSTRALIA

Sheldon v Repatriation Commission [2014] FCA 1388

THE COURT ORDERS THAT:

1.    The Tribunal’s decision dated 17 April 2014 be set aside.

2.    The case be remitted to the Tribunal to be heard and decided again.

3.    The respondent pay the applicant’s costs of and incidental to the appeal.

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

REASONS FOR JUDGMENT

1    Before the Court is an appeal from a decision of the Administrative Appeals Tribunal (“the Tribunal”) in which the Tribunal decided to affirm a decision of the Veterans Review Board denying the applicant a pension at a rate higher than the “general rate” under the Veterans’ Entitlements Act 1986 (Cth) (“the Act”).

Background

2    The applicant, Mr John Sheldon, is a veteran within the meaning of the Act. Mr Sheldon suffers a number of conditions, in particular lumbar spondylosis. It is not in dispute that those conditions are war-caused. The applicant operationally served in the Australian regular army between 1966 and 1967. After discharge he pursued semi-skilled occupations.

3    In 1974, the applicant purchased a backhoe and commenced operating the backhoe as a business venture of his own. For the most part Mr Sheldon operated as a sole trader, but more recently he conducted business through a trust structure of which the trustee was a company controlled by him. Mr Sheldon continued operating the backhoe in his own business until 1978, when he bought a front-end loader truck. In 1986 the applicant resumed operating his business using a backhoe, which he continued to do until around July 2009.

4    In July 2009 the applicant sold the backhoe and a truck used to transport it to a company referred to in the Tribunal’s reasons as “Broadwater”, which was controlled by a Mr Moar, a plumber. The applicant had undertaken considerable work for Mr Moar as a subcontractor over the 23 years prior to selling his backhoe and had considerable experience in operating a backhoe in aid of plumbing and drainage works. As part of the overall agreement with Mr Moar, the applicant agreed to operate the backhoe for at least 12 months, effectively as an employee of Broadwater. The applicant was paid $35 per hour but was not guaranteed any particular number of hours. The applicant continued as an employee until November 2011, when he claimed to be unable to continue on account of pain in his back and knees. The applicant described the situation that prevailed when he commenced as an employee in his evidence to the Veterans’ Review Board as follows:

When – when I – basically, it was a machine hire company that I worked for. There was very little requirement to hop off the machine and do the work. But when I sold the machine and went to work with the plumber, he has a requirement. But all the civil – civil people basically force you to do manual labour as well. It’s – it’s – it’s – the whole scene out there is changing all the time. Whereas before you could just operate a machine; they don’t want that any more. You’ve got to be – they call it multi-task, and you have to hop off the ground. They put a lot of concrete in the front buckets and that. A lot of this is to do with the excavator has – technology has changed – the excavators come and the backhoes have become the support machines. So once you went into the supporting role instead of the front-line role the physical labour has come in.

5    Time sheets compiled by the applicant for the period March to November 2011 showed that the applicant was working considerable hours over the period, in some weeks in excess of 35 hours. The Tribunal noted that the average hours worked on the days when work was available was generally in excess of six hours and was in one week as high as 9.5 hours. On more than half the weeks in that period the applicant worked in excess of 20 hours per week and when he did not work, the reasons stated were “no work”, “wet” or “work stop”.

Application for increase to disability pension

6    In September 2010 the applicant made an application to the respondent, the Repatriation Commission, seeking an increase in his disability pension, to either the “special rate” or, alternatively, the “intermediate rate” under the Act. The respondent declined the increase sought.

7    The applicant lodged an application for review of the December 2010 decision with the Veterans’ Review Board (“the Board”) in February 2011.

8    The application for review of the December 2010 decision came before the Board for hearing in September 2012. On 11 September 2012 the Board decided it was not satisfied the applicant qualified for a pension at the special rate.

9    On 13 November 2012 the applicant applied to the Tribunal for review of the 11 September 2012 decision. On 17 April 2014 the Tribunal affirmed the Board’s decision.

Criteria for establishing the rate of pension

10    Part II, Div 4 of the Act sets out three pension rates and the respective criteria for each rate. These are the general rate (s 22), the intermediate rate (s 23) and the special rate (s 24). It was not in dispute that the applicant qualified for and had been receiving the general rate. Each of s 23 and s 24 contain six criteria for establishing whether a veteran is entitled to the respective rate.

11    For the intermediate rate, these criteria are set out in s 23 as follows:

23    Intermediate 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’s incapacity from war caused injury or war caused disease, or both, is, of itself alone, of such a nature as to render the veteran incapable of undertaking remunerative work otherwise than on a part time basis or intermittently; and

(c)    the veteran is, by reason of incapacity from 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 from that incapacity; and

(d)    section 24 or 25 does not apply to the veteran.

12    Section 23(1)(b) is to be read with s 23(2) which provides:

(2)    Paragraph (1)(b) shall not be taken to be fulfilled in respect of a veteran who is undertaking, or is capable of undertaking, work of a particular kind:

(a)    if the veteran undertakes, or is capable of undertaking, that work for 50 per centum or more of the time (excluding overtime) ordinarily worked by persons engaged in work of that kind on a full-time basis; or

(b)    in a case where paragraph (a) is inapplicable to the work which the veteran is undertaking or capable of undertaking--if the veteran is undertaking, or is capable of undertaking, that work for 20 or more hours per week.

13    The criteria for the special rate as set out in s 24 are:

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; and

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

14    Section 24(1)(c) is to be read with s 24(2) which provides:

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

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

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

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

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

15    It was accepted before the Tribunal and in this Court that the applicant had established the requirements of subs (aa), (aab), (a) and (d) of each of s 23(1) and s 24(1). The question for the Tribunal was whether the applicant satisfied s 24(1)(b) and (c) entitling him to the special rate or, alternatively, s 23(1)(b) and (c) entitling him to the intermediate rate.

16    It is also important to note s 28 of the Act, which sets out the matters to which regard must be had in considering whether s 24(1)(b) or s 23(1)(b) apply. It states:

28    Capacity to undertake remunerative work

In determining, for the purposes of paragraph 23(1)(b) or 24(1)(b), whether a veteran who is incapacitated from war caused injury or war caused disease, or both, is incapable of undertaking remunerative work, and in determining for the purposes of section 24A whether a veteran who is so incapacitated is capable of undertaking remunerative work, the Commission shall have regard to the following matters only:

(a)    the vocational, trade and professional skills, qualifications and experience of the veteran;

(b)    the kinds of remunerative work which a person with the skills, qualifications and experience referred to in paragraph (a) might reasonably undertake; and

(c)    the degree to which the physical or mental impairment of the veteran as a result of the injury or disease, or both, has reduced his or her capacity to undertake the kinds of remunerative work referred to in paragraph (b).

Decision of the Tribunal

17    The Tribunal found, in summary, that:

    The applicant was capable of working at least 10 hours per week as a backhoe driver.

    The applicant’s skills and qualifications were as a backhoe driver and his experience was entirely in that area.

    As a self-employed backhoe driver the applicant was able to confine himself to the role of driver and was not expected to work outside that narrow field, specifically manual labour associated with the plumbing work on which he was undertaking the backhoe work.

    The applicant’s work situation changed when he sold his backhoe and became, in effect, an employee.

    The evidence did not permit a finding that the applicant possessed skills, qualifications or experience that would have allowed him to undertake work outside the role of backhoe operator.

    The applicant appeared to have made a conscious choice to limit the ambit of the work he performed.

    The applicant was capable of performing the kinds of remunerative work that a person with a backhoe operator’s skills, qualifications and experience might reasonable undertake.

    The evidence did not establish that the applicant’s war-caused conditions reduced his capacity to undertake work as a backhoe operator.

    The Tribunal could not be satisfied that the applicant was at that time, or during the assessment period, totally and permanently incapacitated as that expression is used in s 24(1)(b) of the Act. This conclusion is sufficient to dispose of the matter and require that the Commission’s decision be affirmed.

    It was the work of operating the backhoe solely that the applicant was undertaking. His war-caused conditions did not prevent him from continuing that work because he remained capable of doing it.

    The question of s 24(1)(c) must be answered adversely to the applicant.

    The ameliorating provisions of s 24(2)(b) of the Act could not assist the applicant as it requires the veteran to have been “genuinely seeking to engage in remunerative work”. At the highest the applicant appeared to have made enquiries with two potential employers in the week that he ceased working but has not otherwise demonstrated that he was seeking to engage in remunerative work.

    The decision under review ought be affirmed.

Questions of law and grounds of appeal

18    The applicant’s amended notice of appeal filed 4 June 2014, as further amended following an oral application to amend during the course of the hearing, states the following questions of law for this Court to determine:

1.    Did the Tribunal fail to consider whether the Applicant satisfied the requirements of s 23 of the Veterans’ Entitlements Act 1986 (Cth) so as to qualify for the “intermediate” rate of pension?

2.    Did the tribunal misconstrue the phrase “remunerative work that the veteran was undertaking” in s 24(1)(c) or the phrase “remunerative work” in s 24(1)(b) of the Veterans’ Entitlements Act 1986 (Cth) or otherwise adopt an unduly narrow approach to that phrase by considering the particular duties in which the Applicant had been engaged rather than the type of employment undertaken by the Applicant?

19    The grounds relied on in the amended notice of appeal, which refer to the questions, are as follows:

1.    As to the first question of law, the Tribunal’s decision should be set aside because:

a.    Before the Tribunal, the Applicant’s case contended that he satisfied each of the requirements of s 23(1) of the Veterans’ Entitlements Act 1986.

b.    As a result of s 19(5B) of the Veterans’ Entitlements Act 1986, the Tribunal was required to assess whether the Applicant as (sic) entitled to the rate of pension specified in s 23.

c.    The Tribunal failed to consider or make findings in respect of any relevant provision of s 23(1).

d.    If the Tribunal had considered and made findings in respect of the relevant provisions of s 23(1), it is possible that a different result might have been achieved.

2.    As to the second question of law, the Tribunal’s decision should be set aside because:

a.    For the purposes of s 24(1)(c) of the Veterans’ Entitlements Act 1986, the Tribunal was required to determine what was the relevant “remunerative work that the veteran was undertaking”.

b.    Section 24(1)(c) required the Tribunal to consider the type of employment undertaken by the Applicant rather than the particular duties in which he had been engaged.

c.    The Tribunal erred by considering the particular duties that the Applicant had been engaged in as a back hoe operator instead of considering the type of employment he had undertaken, leading it to find that the remunerative work undertaken by the Applicant was “back hoe operator solely” rather than simply “back hoe operator”.

20    Relying on those grounds, the applicant seeks the following orders:

1.    The Tribunal’s decision dated 17 April 2014 is set aside.

2.    The case is remitted to the Tribunal to be heard and decided again.

3.    The respondent is to pay the applicant’s costs of and incidental to the appeal.

Question 1: did the Tribunal fail to consider whether the applicant satisfied the requirements of s 23 of the Act?

21    In relation to this issue the applicant submitted that:

    In Smith v Repatriation Commission [2014] FCAFC 53, the Full Court held that it may be an error of law for the Tribunal to only consider the criteria in s 24 without considering whether s 23 could be satisfied.

    The Tribunal in the present case identified that the applicant relied on an alternative argument that he satisfied s 23 of the Act. However, the Tribunal then made no further reference to s 23.

    The Tribunal did not consider or make findings about whether the applicant satisfied paragraph 23(1)(b).

    Although s 23(1)(c) and s 24(1)(c) are in identical terms, they operate in relation to different types of incapacities. The Tribunal did not grapple with the composite test posed by paragraphs (b) and (c) in each subsection, or the difference in the composite test in s 23(1) as opposed to s 24(1).

    In relation to the applicant’s work capacity, the Tribunal accepted the evidence of Dr Blair Christian and said that Dr Christian “expressed the view, with logical reasons to explain it, that Mr Sheldon was capable of working at least 10 hours per week as a backhoe driver”.

    Although the Tribunal said it was not satisfied the applicant’s “war-caused conditions reduced his capacity to undertake work as a backhoe operator”, this was said expressly in the context of a consideration of paragraph 24(1)(b) of the Act referring to an incapacity to work more than eight hours per week. The Tribunal’s findings must be looked at in the context of this and the evidence of Dr Christian.

    The Tribunal’s findings at [17] of its written reasons cannot be taken as a finding made under paragraph 23(1)(b) of the Act.

22    The respondent submitted, in summary:

    It acknowledged that the Tribunal did not conclude explicitly that s 23(1) did not apply to Mr Sheldon, however such a conclusion was implied in the reasons of the Tribunal.

    Smith v Repatriation Commission actually supported the respondent’s contention. To qualify for the intermediate rate under s 23(1)(b) the veteran’s incapacity from war-caused injury must alone be of such a nature as to render the veteran incapable of undertaking remunerative work otherwise than on a part-time basis or intermittently.

    The Tribunal preferred the evidence of Dr Christian to Dr Sharwood, and found that Mr Sheldon was capable of working at least 10 hours per week as a backhoe driver.

    The Tribunal found that Mr Sheldon’s sale of his business and becoming, in effect, an employee, were additional factors in him being prevented from continuing to engage in the work of a backhoe operator.

Smith v Repatriation Commission

23    Both parties referred me to Smith v Repatriation Commission, a decision of the Full Court of the Federal Court which post-dated the decision of the Tribunal before me and in which the Full Court had examined, in detail, s 23 and s 24 of the Act. It is convenient to examine that decision before turning to the matter before me.

24    In Smith v Repatriation Commission the appellant was a veteran who had served in Vietnam. He had been diagnosed as suffering post-traumatic stress disorder and other maladies as a result of his war service. Mr Smith had been granted a general rate of pension pursuant to s 22 of the Act.

25    After leaving the armed forces and from June 1974 until 1979, Mr Smith worked as an electrical mechanic with an electrical contractor. In 1979 he worked in the coal mining industry in Queensland as an electrical contractor. In 1982 Mr Smith suffered a serious workplace injury which resulted in serious damage to his legs, including amputation of his left leg above the knee. Five years later Mr Smith and his wife purchased a property of some 500 acres in Victoria to conduct a wool and beef farming business. In 1998 he returned to Queensland, working as an electrical fitter/mechanic servicing underground mining equipment. In 2000 he returned to Victoria and worked in various jobs.

26    Mr Smith and his family commenced a feed lot business on their property in Victoria but abandoned it in 2006 because it was not making a profit.

27    In 2009 Mr Smith applied for an increase in his pension beyond the general rate. A delegate of the Repatriation Commission ruled that he was not entitled to a pension at either the intermediate rate under s 23 or the special rate under s 24. Mr Smith then unsuccessfully applied for review of the delegate’s decision to the Veteran’s Review Board, and thence to the Tribunal. The Tribunal ruled that Mr Smith was not entitled to a disability pension at the special rate. No consideration appeared to be given, and no ruling was made, by the Tribunal as to whether Mr Smith was entitled to a pension at the intermediate rate.

28    Each member of the bench in Smith v Repatriation Commission delivered an independent decision, although Rares J generally agreed with the reasons of Buchanan J. The Court was unanimous in deciding that the appeal should be allowed and the matter remitted for further consideration by the Tribunal of the whole of Mr Smith’s application. While each case must turn on its own facts, key points emerging from the judgment relevantly include:

    Section 23(1)(c) and s 24(1)(c) refer to differing degrees of incapacity or effects of a war-caused injury on a veteran. Section 23 addresses a lower level of incapacity in a veteran.

    It is a question of fact whether the war-caused injury alone brought about the veteran’s situation of being unable to engage in work.

    It is necessary to consider whether s 24(1) applies to the circumstances of a veteran prior to considering the applicability of s 23(1) because of the operation of s 23(1)(d).

    The expression “continuing to undertake remunerative work that the veteran was undertaking” in s 23(1)(c) and s 24(1)(c) must operate in respect of the pre-incapacity work of the veteran, including the hours and nature of the work, that the veteran was engaged in and the consequent loss of income attributable to his or her reduced ability to perform at that level after, and by reason of, the effects of the injury.

    The expression “continuing to undertake remunerative work that the veteran was undertaking” must be construed in a realistic and practical way.

    The times may vary at which incapacity from war-caused injury operates to prevent a veteran from continuing to undertake remunerative work.

    Section 24(1)(b) and (c), when read together, states a composite test containing a series of conditions.

    Section 24(2)(b) is applicable notwithstanding that the veteran has engaged in remunerative work since becoming incapacitated. The test in s 24(2)(b) is one to be applied at the time when the assessment is required to be made under s 19(5C).

    A veteran who has not been engaged in remunerative work at a particular point in time (ie before or during the assessment period) may nevertheless satisfy s 24(1)(c) by demonstrating that there has been a genuine effort to engage in remunerative work (which effort would continue but for the incapacity), and that the incapacity is the substantial cause of an inability to obtain remunerative work. In that circumstance, the veteran is treated as having been prevented from continuing to undertake remunerative work earlier undertaken (I note in particular Buchanan J at [51]).

    In circumstances where s 24(1)(b) (total incapacity) is satisfied, it follows that s 23(1)(b) will also be satisfied as it is a lesser test directed at a lower entitlement.

    Section 24(1)(c) and s 23(1)(c) apply conditions to be satisfied which are expressed in the same terms.

    There may be circumstances where a particular fact situation which defeated recognition in accordance with s 24(1)(c) might nevertheless justify recognition under s 23(1)(c) (I note in particular Buchanan J at [57]).

Consideration

29    I am satisfied that the answer to the first question of law posed by the applicant should be answered in the applicant’s favour.

30    First, and notwithstanding its findings concerning s 24, the Tribunal was required by s 19(5C) and s 19(6) to assess whether Mr Sheldon had an entitlement to an intermediate rate of pension pursuant to s 23 of the Act at any time during the assessment period. In this respect I note comments of the Full Court in Smith v Repatriation Commission, in particular Buchanan J at [71] and [74] and Foster J at [194].

31    Second, the respondent sought to rely on Smith v Repatriation Commission to support its submission that there was no need for the Tribunal to consider s 23 having dismissed Mr Sheldon’s claim under s 24. In Smith v Repatriation Commission the Tribunal was satisfied that Mr Smith was rendered incapable of working more than eight hours per week due to his war-caused condition alone and that he satisfied s 24(1)(b) of the Act. As Buchanan J observed in that case at [63], it therefore followed that Mr Smith’s circumstances satisfied s 23(1)(b). Although the majority considered it would have made no difference to the decision of the Tribunal had it separately addressed the requirements of s 23 (Buchanan J at [58] and [65], Rares J agreeing), nonetheless the Full Court ordered the matter be returned to the Tribunal. This was because, inter alia, the Tribunal in that case had not only erred in failing to properly consider s 23, the Tribunal had also incorrectly approached the issue concerning the period during which Mr Smith had (or had failed to obtain) remunerative work.

32    However the particular circumstances in Smith v Repatriation Commission at [58] and [65] are distinguishable from those in the case before me. In the present case the Tribunal was satisfied that Mr Sheldon was able to work more than eight hours per week, and therefore did not satisfy s 24(1)(b). More to the point, in this case it is by no means clear that Tribunal was satisfied that Mr Sheldon was able to work for 20 or more hours per week as contemplated by s 23(1)(b) and s 23(2). At [14] the Tribunal said:

Dr Christian saw Mr Sheldon in May 2013, again for the purposes of a medico-legal report. He expressed the view, with logical reasons to explain it, that Mr Sheldon was capable of working at least 10 hours per week as a backhoe driver. I prefer his opinion to that of Dr Sharwood.

33    While this is a valid finding of the Tribunal, it is clearly a finding made by reference to s 24 of the Act, as is clear from the succeeding paragraphs of the Tribunal’s reasons for decision.

34    The respondent referred to the following observations of the Tribunal at [17]:

The evidence of Dr Christian, which I accept, is that Mr Sheldon was capable of performing the kinds of remunerative work that a person with a backhoe operator’s skills, qualifications and experience might reasonably undertake. The evidence does not satisfy me that his war-caused conditions reduced his capacity to undertake work as a backhoe operator.

35    The respondent submitted further that this was an unqualified finding of fact that Mr Sheldon was capable of performing remunerative work as a backhoe operator, and that it followed that the Tribunal would most likely make the same finding again. However the sentence following these observations in the Tribunal’s Reasons for Decision was:

Thus, I am not satisfied that Mr Sheldon is, or was during the assessment period, totally and permanently incapacitated as that expression is used in s 24(1)(b) of the Act.

36    In my view the “finding of fact” referred to by the Tribunal cannot be considered unqualified. It does not support a finding of fact referable to the application of s 23 of the Act. It is entirely possible that the Tribunal could, after consideration, find in Mr Sheldon’s favour in view of the requirements of s 23 of the Act. The failure of the Tribunal to consider Mr Sheldon’s case in that context was an error of law, warranting an order that the decision of the Tribunal be set aside.

37    While this finding suffices to allow the appeal and order the matter returned to the Tribunal, for completeness I will also consider issues raised by the applicant in respect of the second question of law posed by the applicant’s amended notice of appeal.

Question 2: did the Tribunal misconstrue the phrase “remunerative work that the veteran was undertaking” in s 24(1)(c) or the phrase “remunerative work” in s 24(1)(b) of the Act or otherwise adopt an unduly narrow approach to that phrase by considering the particular duties in which the applicant had been engaged rather than the type of employment undertaken by the applicant?

38    In respect of this issue the applicant submits, in summary:

    The reference to “remunerative work” is a reference to the type of work which the veteran previously undertook and not to any particular job.

    The Tribunal found as facts that Mr Sheldon’s skills and qualifications were as a backhoe operator, his experience was entirely in that area, and that his ability to confine himself to that role and not engage in manual labour changed when he sold his backhoe and became an employee.

    The Tribunal noted Mr Sheldon’s evidence that the employment scene in relation to backhoe operation had changed over the years, and backhoe operators were now expected to multi-task.

    The Tribunal in its Reasons for Decision made the same error as was apparent in Repatriation Commission v Butcher [2007] FCAFC 36, because it did not consider in the general sense required by the subsection the type of employment undertaken by the veteran, but rather the particular duties in which he had been engaged.

    Alternatively the Tribunal excluded from consideration the issue whether the employed backhoe operator work (including manual labour) that Mr Sheldon undertook from July 2009 until November 2011 was itself “remunerative work”.

39    The respondent submitted, in summary, that:

    The decision in Butcher did not assist the applicant because that case stood for the proposition that an unduly narrow meaning attributed to the term “remunerative work” would result in a veteran being more likely to meet the requirements of s 24 of the Act.

    The Tribunal made a finding of fact that Mr Sheldon was a backhoe operator, which was open on the material before it (and indeed so claimed by Mr Sheldon).

    The Tribunal found there were reasons other than Mr Sheldon’s war-related condition which prevented him from continuing to undertake remunerative work, primarily Mr Sheldon’s decision to sell his backhoe and become an employee.

    Finally, the respondent submits that the ground relevant to this question is an attempt to relitigate factual findings of the Tribunal, in particular the nature of Mr Sheldon’s remunerative work.

Consideration

40    The phrase “remunerative work” is not defined in the Act. In Butcher at [7] however the Full Court said:

It is settled law that the subsection requires consideration of ‘remunerative work’ by having regard not to particular tasks and duties involved in specific jobs, but rather to the type of substantive work undertaken by the veteran considered at a higher level of generality: see Banovich v Repatriation Commission (1986) 69 ALR 395 at 402; Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225; and Repatriation Commission v Hendy [2002] FCAFC 424; (2002) 76 ALD 47 at 54.

41    At [16] in its Reasons for Decision the Tribunal noted that the evidence did not permit a finding that Mr Sheldon possessed skills, qualifications or experience that would allow him to undertake work outside the role of backhoe operator. The Tribunal continued:

I appreciate that a narrow approach ought not be taken to the construction of s 28(a) and (b) of the Act but Mr Sheldon appeared to have made a conscious choice to limit the ambit of the work he performed. No doubt he had some expertise that would have permitted him, absent his disabilities, to perform some manual labouring tasks however I am not satisfied that the hypothetical person with his skills, qualifications and experience would have been able to undertake remunerative work outside of backhoe operating.

42    I am satisfied in principle that the Tribunal’s assessment of Mr Sheldon being able to perform remunerative work only as a backhoe operator was a finding open to the Tribunal on the facts of the case and within the scope of s 23 and s 24 of the Act. There is always a risk that a finding as to the type of remunerative work which a veteran was undertaking or is capable of undertaking, could lead the fact finder to equate “remunerative work” with “occupation” contrary to the reasoning of the Full Court in Repatriation Commission v Connell [2011] FCAFC 116 at [23]. However as a threshold issue the Tribunal clearly and properly identified the skills, qualifications and experience of Mr Sheldon, and accordingly the type of employment which Mr Sheldon had previously undertaken or was capable of undertaking, namely “backhoe operating”.

43    Where in my view the Tribunal erred was that, as the applicant has correctly submitted, in its process of reasoning the Tribunal then took an unduly restrictive approach to “remunerative work” for the purposes of considering whether Mr Sheldon’s circumstances satisfied s 23 or s 24. In this respect the Tribunal fell into the type of error described by the Full Court in Butcher at [13], where:

… the tribunal paid regard not to the substantive remunerative work that the veteran had undertaken in the past, but to particular tasks performed by the veteran during the course of his employment. The tribunal did not consider, in the general sense required by the subsection, the type of employment undertaken by the veteran but rather the particular duties in which he had been engaged.

(emphasis added.)

44    I also note the comments of the Full Court in Repatriation Commission v Hendy [2002] FCAFC 424 where the Court said at [36]:

The tribunal’s task was to assess what the veteran probably would have done, if he had none of his service disabilities during the assessment period. The requirement to consider “remunerative work that the veteran was undertaking” does not mean a particular job with a particular employer but the substantive remunerative work that the veteran had undertaken in the past.

45    In particular the Tribunal appeared to equate (and confuse) the particular tasks which Mr Sheldon had performed while giving himself restricted duties in his own business, with the more onerous tasks Mr Sheldon was required to perform while employed as a backhoe operator by a third party. The Tribunal did not have regard to the undisputed evidence of Mr Sheldon that, because of changes over the years in the manner in which backhoe operating was performed, the role of backhoe operator usually involved more than merely driving a backhoe (which is the task he was able to perform), and that in the present day the duties of a person employed in backhoe operating also usually included an element of manual labour which with Mr Sheldon had difficulties.

46    In this respect while the Tribunal identified Mr Sheldon as a “backhoe operator”, the Tribunal failed to identify the nature of the substantive work which, realistically and practically, was required of persons with the skills, qualifications or experience of someone like Mr Sheldon. I note comments of Rares J in Smith v Repatriation Commission where his Honour observed:

[17]    It is important that a beneficial provision like s 24(1)(c) be construed in a practical way. This is particularly so in today’s world, where forms of work and occupations are subject to constant change as technology eliminates or reduces some occupations and creates new ones. The expression “continuing to undertake remunerative work that the veteran was undertaking” in s 24(1)(c) must be construed in a realistic and practical way so as to avoid underlying technical constraints on its application to a veteran whose income earning capacity has been completely or significantly impaired.

(emphasis added.)

47    It follows that, in summary, the Tribunal approached the phrase “remunerative work” in Mr Sheldon’s case from the limited perspective of the particular (and restricted) duties performed by Mr Sheldon while he was self-employed, rather than the substantive remunerative work in which he had been engaged, and which (on the evidence) had been subject to change in the industry. In summary in misconstruing the phrase “remunerative work”, the Tribunal:

    did not construe the phrase in a beneficial and practical way, as explained by Rares J in Smith v Repatriation Commission; and

    did not have regard to Mr Sheldon’s evidence that, because of his self-employment, in the words of Rares J in Smith v Repatriation Commission at [21], he performed only limited duties given by a “sympathetic employer” to a veteran with a war-caused injury;

    importantly – did not note that Dr Christian – whose evidence the Tribunal accepted – had been asked to address Mr Sheldon’s work capacity solely as a backhoe driver. The experts, including Dr Christian, were not asked to address Mr Sheldon’s work capacity for other duties including manual labour. To this extent the medical evidence could be of only limited assistance to the Tribunal.

48    In my view the reasoning of the Tribunal in construing “remunerative work” in this context evinces an error of law. The second question of law posed by the applicant must be answered in his favour.

Conclusion

49    In the circumstances the appeal should be upheld, and the matter remitted to the Tribunal for rehearing. Costs should follow the event.

Associate:

Dated:    17 December 2014