FEDERAL COURT OF AUSTRALIA

Repatriation Commission v Sharp [2017] FCA 350

ORDERS

THE COURT ORDERS THAT:

1.    The appeal under section 44 of the Administrative Appeals Tribunal Act 1975 (Cth) is dismissed.

2.    Costs are reserved.

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

REASONS FOR JUDGMENT

PERRY J:

1.    INTRODUCTION

1    The respondent, Brian Sharp, served in the Royal Australian Air Force from August 1968 to 31 December 1988 and thereafter was employed in various civilian positions until 20 June 2014 when he ceased work. His service from 7 December 1972 to 31 December 1988 constitutes “defence service” as defined in ss 5Q(1A) and 68 of the Veterans’ Entitlements Act 1986 (Cth) (the Act). Mr Sharp suffers from sensorineural deafness, anxiety neurosis with phobic features, and bruxism, which have been accepted as “defence-caused injuries” as defined in s 73 of the Act.

2    On 17 April 2014, Mr Sharp sought an increase in the rate of pension paid to him to the special rate of pension provided for in s 24 of the Act. A delegate of the appellant, the Repatriation Commission (the Commission), refused that application but increased his pension to 90% of the general rate of pension. That decision was affirmed on 2 July 2015 by the Veterans Review Board.

3    Mr Sharp sought review of the Veterans’ Review Board’s decision in the Administrative Appeals Tribunal (the AAT): Sharp and Repatriation Commission [2016] AAT 719. Before the AAT, Mr Sharp submitted that he was entitled to the special rate of pension, or alternatively the intermediate rate of pension, or that at the least his pension should be increased to 100% of the general rate. The Commission conceded that the evidence would support a finding that Mr Sharp was entitled to a pension at 100% of the general rate. The issue was ultimately therefore whether he was entitled to a pension above the general rate.

4    The AAT set aside the decision of the Veterans’ Review Board on 16 September 2016, substituting instead a decision that Mr Sharp was entitled to a pension as follows:

(1)    at the intermediate rate provided for in s 23 of the Act from 1 May 2014; and

(2)    at the special rate provided for in s 24 of the Act from 20 June 2014.

5    This appeal is on questions of law against the decision of the AAT brought pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) by the Commission. Each of the questions of law concern the manner in which the AAT determined the issue of whether the incapacity due to the defence-caused injuries “alone” prevented Mr Sharp from undertaking the remunerative work that he was undertaking and “alone” are responsible for him suffering a loss of earnings that he would not have suffered otherwise as required by s 24(1)(c) (the “alone test”). Specifically, the AAT is said to have erred in its consideration of whether Mr Sharp’s alcohol consumption constituted a factor preventing him from continuing to undertake his remunerative work for the purposes of determining whether the alone test was satisfied.

6    Finally I note that by correspondence following receipt of Mr Sharp’s written submissions, the Commission abandoned the question of whether the AAT had failed to satisfy the alone test because of his age and related grounds. The Commission was granted leave to file a further amended notice of appeal from a Tribunal omitting those pleadings.

2.    THE STATUTORY SCHEME

2.1    Provisions regarding the entitlement to pensions at different rates

7    Division 4 (ss 21A-29) of Part II of the Act deals with rates of pensions payable for war-caused injuries and war-caused diseases. That division applies by virtue of s 73(1) of the Act to pensions payable under Part IV dealing with defence-caused injuries and defence-caused diseases (as defined in section 70(5)). By s 73(2), for the purposes of applying Division 4 of Part II, a reference to a war-caused injury or disease shall be read as a reference to a defence-caused disease, and to a veteran, as a reference to a member of the Forces. It is therefore by virtue of s 73 that the criteria in ss 23 and 24 for a pension at the intermediate or special rates of pension apply to Mr Sharp with respect to his pension entitlements for his defence-caused injuries.

8    An application may be made under s 15 of the Act for an increase in the pension payable to a veteran who is already in receipt of a pension under Part II of the Act. In such a case, s 19(4A) directs that the application be dealt with in accordance with ss 19(5A), (5B) and (5C) and determined under s 19(5D). The scheme which proceeds thereafter is, as Buchanan J explained in Smith v Repatriation Commission [2014] FCAFC 53]; (2014) 220 FCR 452 at [36] (Smith), “complicated, with a variety of intersecting provisions and requirements to be taken into account.”

9    First, s 19(5B) provides:

The Commission must assess the matters set out in subsection (5C) in accordance with whichever of sections 22, 23, 24, 25, 26 and 30 are applicable in the particular case.

10    For present purposes, therefore, s 19(5B) directs that an assessment must be made in accordance with whichever of s 22 (general rate of pension), s 23 (intermediate rate of pension) or s 24 (special rate of pension) applies to the case in question.

11    Secondly, matters which must be assessed are, by virtue of s 19(5C):

(a)    the rate or rates at which the pension would have been payable from time to time during the assessment period; and

(b)    subject to subsection (6), the rate at which the pension is payable.

12    Thirdly, s 19(6) of the Act in turn provides:

Where the Commission has, pursuant to subsection (5C), assessed that the pension was payable at some time during the assessment period at the rate provided by section 23 or 24 then, subject to section 24A, the rate at which the pension is payable shall not be lower than the rate provided by whichever of those sections applied, or applied most recently, during the assessment period.

13    Finally, s 19(5D) provides that after making an assessment under subsection (5C), the Commission must determine that pension is payable at the rate assessed.

14    The criteria for the payment of the pension at the special rate contained in s 24 of the Act are relevantly as follows:

24 special rate of pension

(1)    This section applies to a veteran if:

…

(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

… 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; …

(Emphasis added)

15    Section 23, which sets out the criteria for the grant of the intermediate rate of pension, is in substantially the same terms save in relation to the maximum hours of work a veteran is able to undertake.

16    It is not in issue that generally speaking, all of the criteria in ss 23 and 24 must be met before an applicant is eligible for payment of the pension at the intermediate or special rate respectively and that the AAT has no discretion in this regard.

17    Buchanan J in Smith helpfully summarised the legislative scheme as follows:

40    The effect of these statutory directions in the present case was that an assessment was required as to whether at any time during the “assessment period” a pension was payable in accordance with s 23 (intermediate rate) or s 24 (special rate). If so, the most recent such entitlement was to be determined as the rate of pension payable. The assessment period commences on the date an application is made and concludes when the decision is made. This means that the entitlement of the veteran is not to be judged only at the time that the application is made. The position must be assessed by reference to any relevant circumstance which occurs up to the time of decision. The entitlement may increase or decrease during that period, but provided that a pension was payable at some time during the assessment period a veteran will receive either the intermediate rate or the special rate, whichever is applicable, or in the case that both are applicable, whichever is the most recently applicable. Because this arrangement applies to applications for increase in pension, it commences from the premise that some level of pension at the general rate is already being paid.

41    The general rate of pension is assessed under s 22 of the Act. First, an assessment must be made under s 21A of the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, according to the provisions of the approved Guide to the Assessment of Rates of Veterans’ Pensions, which is prepared pursuant to the provisions of s 29 of the Act. Assessment of the degree of incapacity is to be determined in increments of 10 percent and is not to exceed 100 percent. Section 22 then provides an entitlement to the general rate of pension at the same percentage of the general rate as the percentage determination of incapacity. The appellant was entitled to the general rate of pension at 100 percent.

2.2    The alone test in sections 23 and 24

18    The principles applicable to the alone test are not in issue.

19    In Smith, Buchanan J at [47] explained the different elements to be established under s 24(1)(b) and (c), namely:

Section 24(1)(b) and (c), when read together, state a composite test containing a series of conditions. First, s 24(1)(b) requires that a veteran be rendered, by the war-related incapacity alone, incapable of working more than eight hours per week. Secondly, s 24(1)(c) requires that the veteran be prevented, by that incapacity alone (i.e. not for other reasons) from continuing earlier remunerative work. Thirdly, s 24(1)(c) requires that prevention for that reason from continuing that work be the cause of a loss of earnings. Fourthly, s 24(1)(c) requires that the loss of earnings would not be suffered but for the incapacity.

20    Shortly thereafter, in Repatriation Commission v Richmond [2014] FCAFC 124; (2014) 226 FCR 21 (Richmond), the Full Court explained that the alone test in s 24(1)(c) “is concerned with whether or not there is more than one cause of the preventative effect that the veteran claims has resulted from his or her war-caused incapacity.” (at [57]). Specifically their Honours held that:

58. … to qualify for the special rate, the preventative effect must arise from the veteran’s war-caused incapacity alone, and not from other non war-caused preventative factors as well. If other non war-caused factors contribute to the preventative effect, even if they are only of secondary importance and not of themselves sufficient to prevent the veteran from engaging in remunerative work, their presence will deny the veteran eligibility for the special rate.

21    In short, s 24(1)(c) requires an applicant to demonstrate that the loss of earnings is the direct result of the war related incapacity and that that incapacity is the sole reason for the loss of earnings.

22    While their Honours observed in Richmond at [65] that this may be seen as a harsh result, they considered that it arises from the plain words of the section. As the Full Court then explained at [65], “[t]he special rate of pension is almost three times higher than the general rate, and the extrinsic materials indicate that the legislature intends the special rate to be reserved for a limited category of veterans.”

23    The correctness of the decision in Richmond was unsuccessfully challenged in Repatriation Commission v Watkins [2015] FCAFC 10, with the Full Court holding at [61] that, not only could it be said that the decision was not “plainly wrong” but the decision in Richmond was correct: see also Summers v Repatriation Commission [2015] FCAFC 36; (2015) 230 FCR 179 (Summers) at [194] (the Court).

3.    THE DECISION OF THE AAT

24    Mr Sharp appeared unrepresented before the AAT. The Commission’s case relevantly relied upon the alleged failure to satisfy the alone test based upon Mr Sharp’s alcohol consumption which had been diagnosed as a substance use disorder by Dr Smith. Dr Smith is a consultant psychiatrist who examined Mr Sharp at the Commission’s request. He wrote a report dated 22 August 2016 and gave oral evidence.

25    As earlier mentioned, the AAT set aside the decision of the Veterans’ Review Board, and in place of that decision determined that Mr Sharp is entitled to the pension at the intermediate rate provided for in s 23 of the Act with effect from 1 May 2014 and at the special rate provided for in s 24 with effect from 20 June 2014.

26    The reasons of the AAT for so finding may be summarised as follows.

27    The AAT relevantly summarised the criteria which Mr Sharp must satisfy under ss 24(1)(b) and (c) of the Act in order to be eligible for the pension at the special rate. No issue is taken with the accuracy of that summary.

28    The AAT set out Mr Sharp’s work history beginning with his career with the RAAF when his anxiety condition began, to the time at which he ceased work in June 2014 with his then employer, the Health Insurance Commission. In the course of explaining that history, the AAT identified difficulties from which he had suffered from time to time in his various employment roles in the government and private sectors with stress and other symptoms: see further below at [59].

29    The AAT then set out the extensive medical evidence dating back to Mr Sharp’s treating psychiatrist in 1989 diagnosing him with a long-standing phobic anxiety state. That evidence included the following:

(1)    the report of Dr R Troup, psychiatrist, dated 17 April 1989 diagnosing Mr Sharp with a long-standing phobic anxiety state and recommending further treatment (AAT reasons that [33]);

(2)    the report of Dr Alan Freed, psychiatrist, dated 12 November 1990 under whose care Mr Sharp was being treated and who wrote that he considered Mr Sharp’s prognosis in respect of his anxiety disorder was only fair, as was his prognosis with respect to episodic excessive alcohol consumption (AAT reasons at [34]);

(3)    the clinical notes of Dr John Saboisky, consultant psychiatrist, in June 2004 (recording among other things depression and excessive alcohol ingestion), September 2005 (recording distress over marital situation and alcohol abuse) and April 2008 (recording the applicant as struggling with nerves and anxiety), together with a report in April 2008 recording that at that time Mr Sharp had been drinking only moderately but was having problems at work affecting his anxiety symptoms (AAT reasons at [35]);

(4)    the work ability report of Dr Thomson dated 19 May 2014 (the applicant’s general practitioner (GP) since 2005), who wrote that from 20 June 2014 Mr Sharp could work less than 8 hours per week only and that she had considered him unfit for work for the past 5 years or so (AAT reasons at [36]);

(5)    a letter from Dr Thomson advising that Mr Sharp was unfit for any kind of work from 20 June 2014 and had been unable to work for a number of years but due to his high work ethic had continued in his previous position to that date. The letter noted Mr Sharp’s ongoing mental health issues described by her as “depression anxiety and PTSD” (AAT reasons at [36]);

(6)    a report from Ms Mary Gianakis, clinical psychologist, dated 18 March 2015 who had treated Mr Sharp in 2012, 2013 and February 2014, focusing among other things on anxiety management skills and behaviour therapy for alcoholism, and also stating that his “anxiety levels [were] through the roof” (AAT reasons at [37]);

(7)    medical reports from his current treating psychiatrist, Dr Myrni Dunda, dated 20 February 2015 advising as to Mr Sharp’s symptoms including panic attacks and profuse sweating, referring to his history of relationship breakdowns and alcohol consumption, and regarding his prognosis as poor (AAT reasons at [38]);

(8)    the report dated 23 August 2016 of Dr Robin Chase, occupational physician, who also gave evidence – Dr Chase considered that Mr Sharp’s subjective distress was continuous and causing him overwhelming distress, and that his accepted disabilities alone were responsible for his incapacity to work while expressing the opinion that he was not genuinely attempting to engage in remunerative employment because of his anxiety disorder and alcohol abuse. However, consistently with Mr Sharp’s case, Dr Chase agreed with the possibility that Mr Sharp was self-medicating with alcohol, noting that his anxiety disorder predated his alcohol abuse (AAT reasons at [39]);

(9)    the evidence of Dr Selwyn Smith, consultant psychiatrist, that Mr Sharp suffers from generalised anxiety disorder and panic disorder agoraphobia, together with substance use disorder which he regarded as a discrete condition (AAT reasons at [41]-[43]; see further below).

30    Under the heading “consideration”, the AAT first quoted relevant passages from Richmond explaining the application of the alone test under ss 24(1)(b) and (c).

31    Secondly the AAT considered whether Mr Sharp satisfied the criterion in s 24(1)(b) of the Act, relevantly, whether his anxiety disorder would of itself render Mr Sharp incapable of undertaking remunerative work for periods aggregating more than 8 hours per week. It is not in issue that the AAT correctly set out what that test required at [46] and [52] of its reasons. The AAT found that, with his skills qualifications and experience, Mr Sharp could reasonably undertake roles associated with change management at a senior level (at [51]). The Commission relied upon the evidence of Dr Smith that in his opinion Mr Sharp has the capacity to work 8 to 20 hours per week which would be significantly enhanced if he ceased his reliance on alcohol, and that he considered Mr Sharp’s alcohol use disorder as the main factor causing him to be impaired at work (as summarised in the AAT’s reasons at [41]). The AAT however preferred the evidence of Dr Thomson and found at [58] that Mr Sharp “…was able to work in roles associated with change management at a senior level for more than 8 but less than 20 hours per week, but that from 20 June 2014 he could not work more than 8 hours per week, in such roles.” In preferring the evidence of Dr Thomson over that of Dr Smith, the AAT took into account among other things that Dr Thomson had been Mr Sharp’s doctor for about 8 years seeing him very regularly, whereas while Dr Smith was a consultant physician, he had formed a view on the basis of one appointment only (at [54]). Furthermore the AAT found that:

55. Dr Smith observed that the applicant’s psychiatric condition affects his ability to work but noted that despite his long-standing psychiatric symptoms, he had been able to work. Dr Smith though, did not refer to the fact that many of the Applicant’s jobs had ended due to his anxiety or because of workplace disagreements.

32    The AAT also found that Dr Smith had overlooked circumstances which led to the cessation of Mr Sharp’s employment, referring to his “long history of failure to cope when work situations became stressful”, the evidence of Dr Thomson advocating for some years that he should leave work, and Mr Sharp’s evidence when he finally accepted that advice and at some personal cost, set in place an orderly exit from his workplace (at [56]). The AAT also found that Dr Thomson’s clinical notes recorded that Mr Sharp’s condition during the transition and succession period where he worked part-time did not improve – a matter which the AAT considered may be indicative of further deterioration (at [57]). There is no challenge on the appeal to the findings by the AAT on this criterion.

33    Thirdly, the AAT considered the criterion in s 24(1)(c), namely, whether Mr Sharp’s incapacity from anxiety neurosis with phobic features was the only factor preventing him from continuing to undertake work and as a result whether Mr Sharp was suffering a loss of earnings from which he would not be suffering if he were free from that incapacity. The AAT set out the principles applicable to the alone test as it appears in the context of s 24(1)(c) at [59]-[61] of its reasons. Again no issue is taken with that articulation of the relevant principles.

34    Finally, for reasons I explain below, the AAT concluded that that the criteria in s 24(1)(c) were met, finding that:

70. I am reasonably satisfied that Mr Sharp’s incapacity from anxiety neurosis with phobic features is the only factor preventing him from continuing to undertake work.

71. I am also satisfied that the applicant has suffered a loss of wages or earnings that he otherwise would not have suffered but for his service-caused conditions.

35    The AAT concluded that it was reasonably satisfied that Mr Sharp met all of the criteria for the intermediate rate of pension from 1 May 2014 when he reduced his hours and at the special rate from 20 June 2014 when he ceased work.

4.    CONSIDERATION

4.1    The issues

36    The further amended notice of appeal identifies four questions of law as follows:

1.    In applying the “alone” test in s 23(1)(c) and s 24(1)(c) of the Veterans’ Entitlements Act 1986 (VEA), did the Tribunal misconstrue that test by limiting its consideration to whether there was a diagnosed medical condition/s which contributed to preventing the respondent from continuing to undertake the relevant remunerative work?

2.    Did the Tribunal fail to consider and resolve a submission which was seriously advanced by the Applicant and worthy of consideration, namely that the Respondent did not satisfy the alone test in s 23(1)(c) or s 24(1)(c) because his substance abuse disorder (which has not been accepted as having been war-caused) were factors which played a role in preventing him for continuing to undertake remunerative work that he was undertaking?

2A.    Whether the Tribunal’s finding of fact in the final sentence of paragraph [67] of its reasons for decision was illogical or irrational having regard to the evidence before it concerning the Respondent’s alcohol consumption at and around the time that he ceased to engage in remunerative work?

3.    Did the Tribunal fail to provide reasons for its decision in breach of its obligation to do so under s 43(2B) of the Administrative Appeals Tribunal Act 1975 (AAT Act)?

37    The Commission’s position with respect to each of these questions was elaborated upon in the grounds contained in the further amended notice of appeal. Ultimately the answer to each question turns upon the proper construction of the AAT’s reasons. In this regard it is important to bear in mind the proper approach to reading the reasons of an administrative decision-maker, as explained by Brennan CJ, Toohey, McHugh and Gummow JJ in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272:

When the Full Court referred to “beneficial construction” [of the delegate’s reasons], it sought to adopt an approach mandated by a long series of cases, the best exemplar of which is Collector of Customs v Pozzolanic [(1993) 43 FCR 280]. In that case, a Full Court of the Federal Court (Neeves, French and Cooper JJ)… said that a court should not be “concerned with looseness in the language… nor with unhappy phrasing” of the reasons of an administrative decision maker. The Court continued: “the reasons for the decision under review are not to be construed minutely and finally with an eye keenly attuned to the perception of error.”

These propositions are well settled. They recognise the reality that the reasons of an administrative decision maker are meant to inform and not to be scrutinised upon over-overzealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed.

4.2    Question of Law 1: alleged misconstruction of the alone test in limiting the consideration to diagnosed medical conditions

4.2.1    The Commission’s submissions

38    First, the Commission contended that the AAT failed to consider whether the inappropriate consumption of alcohol was a factor preventing or contributing to preventing Mr Sharp from continuing to undertake the relevant remunerative work irrespective of whether there was a “diagnostic label” for the alcohol dependence, particularly given that Mr Sharp’s inappropriate consumption of alcohol was accepted by him and by the AAT at [62] of its reasons (ground 1, further amended notice of appeal). As an aspect of this, the Commission submitted that, despite having regard to the evidence relevant to the presence of a substance abuse disorder, the AAT “did not make any express findings in response to the Repatriation Commission’s submissions that Mr Sharp suffered from a discrete, non-accepted disease, which contributed to preventing him from continuing to engage in remunerative work.” As such, the Commission contended that the AAT erred in law in failing to deal with “a submission seriously advanced by a party relevant to the issues before the Tribunal and worthy of consideration”: Brackenreg v Comcare [2010] FCA 724; (2010) 187 FCR 209 at [69]; see also Rand v Comcare [2014] FCA 584; (2014) 140 ALD 666 (Rand) at [30] (Flick J) and, by analogy, Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 at [24] (Dranichnikov) (holding that it is a jurisdictional error to fail to address “a substantial, clearly articulated argument relying upon established facts”,) and Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184; (2003) 236 FCR 593. On the other hand, as Flick J explained in Rand at [32], “[a] party cannot, obviously enough, seek to transform a submission which was perhaps only obliquely or inferentially advanced into a submission as one being ‘worthy of serious consideration’ or as one which was ‘seriously advanced’ by seeking to characterise it on appeal from the Tribunal as a “central contention”.”

4.2.2    The Commission’s and Mr Sharp’s respective positions before the AAT

39    As the Commission accepted, the case which it ran before the AAT was relevantly that a non defence-caused factor contributed to preventing Mr Sharp from continuing to undertake remunerative work, namely, inappropriate consumption of alcohol, and therefore that he did not satisfy the alone test for the purposes of ss 23(1)(c) and 24(1)(c) of the Act. This aspect of the Commission’s case before the AAT relied upon the evidence of Dr Smith who expressed the opinion that Mr Sharp’s alcohol abuse “is a discrete condition from his anxiety disorder” (emphasis added) and that “he fulfils the criteria for ‘alcohol dependence’ and… met all the diagnostic criteria for that condition” (AAT reasons at [42]). As, for example, counsel for the Commission, Mr Hawker, submitted before the AAT:

MR HAWKER: … Turning first to the requirements of the special rate pension in section 24 of the Veterans Entitlements Act there’s really three main points that we would emphasise which I job propose to do now, and then submit how that fits into the actual legislative scheme. That the three key points that we say are disentitling are, firstly, the evidence supports a conclusion that the applicant is capable of working more than eight hours. Secondly, that if not, the alone test is not satisfied, in that there is conditions or a condition or factors other than simply the accepted condition which brings about the incapacity.

SENIOR MEMBER: Namely?

MR HAWKER: The substance use disorder.

MR SHARP: Sorry?

MR HAWKER: The substance use disorder diagnosed by Dr Smith. And the third point is that, further in the alternative, that even if the tribunal is not satisfied of that point against us, the second limb in section 24(1)(c) is not satisfied, in that if there is the incapacity the applicant is not suffering a loss because of it, and that’s on the basis of the qualifying provision in section 24(2)(a)(i), in that the applicant ceased to engage in work for reasons other than incapacity from the accepted condition. So they’re the three points that I wish to make which in our submission are disentitling when you look at the criteria in section 24.

40    Similarly, Mr Hawker, after referring to passages in the decision in Richmond as to the operation of the alone test (see above at [20] and [22]), submitted before the AAT that:

And in that regard I indicated earlier that the substance use disorder that’s been diagnosed by Dr Smith in our submission is applicable in that regard, in that it bears two characteristics. Firstly, it’s in our submission not an accepted condition and, secondly, it does play a role in contributing to a degree of incapacity, as set out in Dr Smith’s report, and as he explained in his evidence yesterday as well.

41    In this regard, Dr Smith also expressed the view that anxiety does not deteriorate over time, Mr Sharp had suffered the condition for most of his life, and there was no indication as to why he suddenly needed to cease work (AAT reasons at [42]). In Dr Smith’s opinion, a reduction in symptoms would be expected but Mr Sharp’s symptoms were fuelled by alcohol and serious family issues. He noted that work had always been positive for Mr Sharp.

42    Against this, Mr Sharp alleged before the AAT that he used alcohol as a coping mechanism or self-medication, rather than that his alcohol abuse was a separate condition and additional cause of his incapacity for the purpose of the alone test (AAT reasons at [62]). Accordingly Mr Sharp submitted that his use of alcohol could not be dissociated from his anxiety disorder and treated as a separate non-defence cause, and therefore that the defence-service incapacities alone were the reason for his demonstrated loss of earnings for the purposes of s 24(1)(c).

4.2.3    Did the AAT consider and make findings upon alcohol consumption as a separate contributing factor?

43    Contrary to the Commission’s submissions, I consider that the AAT did make findings which comprehensively considered and rejected the case put by the Commission, and by accepting Mr Sharp’s characterisation of his alcohol dependence, inferentially rejected any issue raised by the material that alcohol consumption, even if not a diagnosed condition, was a separate contributing factor.

44    First, at [62] the AAT accurately described the Commission’s submission “that the applicant clearly had a non-accepted [i.e. non-defence] disability of alcohol dependence, or as it is currently described, substance abuse disorder.” In this regard the AAT agreed that there were “multiple references to [Mr Sharp’s] inappropriate consumption of alcohol” in the evidence, referring back to medical notes as early as 1990 recording that the applicant had well-established episodic excessive alcohol consumption. However the AAT found that Mr Sharp’s consumption history appeared to have fluctuated significantly over time, including with periods of abstinence, and referred to evidence supporting the view that Mr Sharp used alcohol “to self medicate” and “as a coping strategy”. Thus at [62], the AAT found that:

As early as 1990 Dr Freed, psychiatrist, noted, in addition to the anxiety condition, that the applicant had well established “episodic” excessive alcohol consumption, which, even from that time, tends to support the applicant’s contention that he used alcohol as a coping mechanism, rather than a separate condition. In June 2004 the applicant was treated as an in-patient for depression with suicidal ideation and excessive alcohol ingestion. Another admission the following year also noted alcohol abuse. In 2008 however, he was said to be drinking only moderately, and this had followed his return to work in a responsible position. An analysis of the records of Dr Thomson’s practice from 2004 show multiple entries in relation to alcohol consumption. The consumption history was not consistent, and appears to have significantly fluctuated over time, including with periods of complete abstinence. The applicant’s psychologist, Ms Gianakis recorded in 2012 that the applicant had a dependency on alcohol, using it to self-medicate, and, in 2013 described a reduction in his consumption but that it remained ‘problematic’. She noted that he had periods of only minimal drinking and again referred to alcohol consumption as a coping strategy. In early March 2014 Dr Thomson recorded that the applicant was endeavouring to reduce to 2 beers a day, and by mid-March had achieved that goal. In early May 2014 he was under further stress and was drinking heavily again. The applicant’s current treating psychiatrist, Dr Dunda recorded, amongst the applicant’s current symptoms, a history of relationship breakdowns and “alcohol consumption”.

45    Secondly, at [63] of its reasons the AAT, while referring to Dr Chase’s evidence that in his opinion Mr Sharp was not working because of his alcohol abuse in addition to his anxiety disorder, pointed out that Dr Chase nonetheless conceded that Mr Sharp may have self-medicated with alcohol. Furthermore, while Dr Chase observed with respect to alcohol that there were multiple hospital admissions for “detox”, the AAT found that “[t]his does not accord with the hospital admissions, all of which refer to the Applicant’s anxiety state, with only subsidiary references, if at all to alcohol.” (at [63] (emphasis added)). Moreover the AAT considered that Dr Chase’s view that Mr Sharp failed to take any responsibility for workplace issues was inconsistent with the evidence of Mr Sharp’s immediate supervisor over some years and who the AAT therefore considered was in a better position to assess the applicant’s contribution to the workplace.

46    Thirdly, the AAT considered Dr Smith’s expert evidence. For various reasons which the AAT spelt out carefully in its reasons, it did not accept his evidence. Thus while Dr Smith on the basis of a single appointment (as the AAT pointed out) considered that Mr Sharp suffered from three separate conditions, including substance use disorder which Dr Smith considered was an associated substantial contributor to Mr Sharp’s generalised anxiety disorder, the AAT found that “[t]here was no evidence however that alcohol had played any part in bringing about the Applicant’s generalized anxiety disorder, and the only evidence in that context was that the Applicant self-medicated as a coping mechanism.” (at [64]). The AAT also referred to the fact that Dr Smith had conceded that self-medication with alcohol was a complication of some of the suite of anxiety disorders referred to in DSM III (at [64]) –a concession which I note was consistent with the case put by Mr Sharp. Furthermore, while Dr Smith considered that the applicant’s use of Frisium could be responsible for his excessive sweating, the AAT found that that symptom of his anxiety had predated the prescription of Frisium by years (at [65]).

47    In the fourth place, and importantly to the Commission’s case, at [65] the AAT found that:

While [Dr Smith] considered the applicant fulfils the diagnostic criteria for alcohol dependence” there was, to me, insufficient indication, on what basis he formed that view, especially as the applicant’s long-standing GP, Dr Thompson, did not make such a diagnosis, notwithstanding the applicant’s history of excessive alcohol consumption from time to time as a means of self-medication.

48    Furthermore at [67], as I explain below, the AAT found (in line with its earlier finding at [55]) that Dr Smith’s view that Mr Sharp’s alcohol use disorder was the main factor causing him to be impaired at work was not supported by Mr Sharp’s history. The AAT also found at [68] that Dr Smith’s disagreement with Dr Thomson’s assessment of the applicant’s work ability did not take into account the ongoing deterioration of Mr Sharp’s condition over many years, with Mr Sharp ultimately accepting his doctor’s long-standing advice to give up work.

49    Finally at [69] the AAT did not accept Dr Smith’s view that it was unclear why Mr Sharp had relinquished work when “Dr Thomson’s records and the applicant’s evidence are clear: he simply, after years of struggle, could not continue, and he finally accepted her advice to leave work.”; and considered that Dr Smith’s view that anxiety improves over time and does not deteriorate “appears to be at odds with the applicant’s documented increasing symptomology over the years” (at [69]).

50    In short, it is apparent that in a careful and reasoned manner, the AAT rejected Dr Smith’s diagnosis that Mr Sharp suffered from a separate substance use disorder from his anxiety disorder on the basis that that diagnosis was not consistent with the evidence of the applicant’s long-standing GP, Dr Smith had had only one appointment on the basis of which to assess Mr Sharp, some of Dr Smith’s views were based upon assumptions which were not correct, and his views were not supported by the applicant’s history of job difficulties and job loss. Rather the AAT accepted Mr Sharp’s case that he self medicated with alcohol effectively as a complication, or as a result, of his anxiety disorder, that case being consistent with the evidence of Mr Sharp’s GP, Dr Thomson, and with other evidence.

51    The Commission submitted that “the Tribunal (at least), [at [65] of its reasons] expressed doubt as to the basis for Dr Smith’s diagnosis of ‘alcohol dependence’. It is not clear from the paragraph whether the Tribunal was, in fact, rejecting Dr Smith’s evidence as to diagnosis.” In my view, however, it is plain that at [65] of its reasons the AAT found that it was not satisfied as to the correctness of Dr Smith’s diagnosis in circumstances where the basis for the diagnosis was not sufficiently indicated, meaning that the basis was not sufficiently disclosed by Dr Smith, and it gave that lack of a demonstrated basis for the opinion particular weight, especially in circumstances where Mr Sharp’s long-standing GP had not made that diagnosis. So understood, it is apparent that the AAT did no more than properly undertake its task of weighing up contrary evidence and reach a reasoned view as to which evidence on this issue to accept. It is not the case that the AAT merely expressed doubt about Dr Smith’s evidence without resolving the issue. It is also the case as earlier explained that the AAT had other reasons as to why it did not accept Dr Smith’s evidence.

52    The Commission also submitted that:

In any event, there is nothing in s 23(1)(c) and s 24(1)(c) of the VE Act that confined the operation of the ‘alone’ test to factors to diagnosed medical conditions. Accordingly, even if the Tribunal did intend to reject Dr Smith’s evidence as to diagnosis, it was still required to consider whether Mr Sharp’s use of alcohol was a factor that contributed to preventing him from continuing to engage in remunerative work.

53    Furthermore, while the Commission accepted that its case that Mr Sharp’s alcohol consumption was a separate non-defence factor relevantly rested upon Dr Smith’s evidence that his alcohol abuse was a separate and discrete disorder, the Commission nonetheless submitted that the AAT was under an obligation to consider all of the material before it and not to restrict its case to that articulated by the Commission (relying upon Grant v Repatriation Commission [1999] FCA 1629; (1999) 57 ALD 1 (Grant) at [17]-[18]). That said, the task of the AAT is not open-ended, notwithstanding that its function is inquisitorial. The AAT must comply with the natural justice hearing rule and could not therefore decide a point adversely against a party without affording that party the opportunity to respond. As such, as the Full Court held in Summers at [98], “[t]he Tribunal had an obligation to follow-up and consider any case which might reasonably appear from the materials…” (citing Grant) (emphasis added).

54    In this case, fairly read it is apparent that the AAT for the reasons earlier set out accepted Mr Sharp’s case that the alcohol abuse was the means by which Mr Sharp self-medicated or coped with his anxiety disorder. This explains the finding at [71] that Mr Sharp’s incapacity from the anxiety disorder was the only factor preventing him from continuing to undertake work in June 2014. In conceptual terms, a symptom, complication or consequence of a disorder cannot constitute a separate factor from the disorder itself for the purposes of determining what factor or factors are operating to prevent an applicant from working. The AAT implicitly therefore rejected any proposition arising from the materials that, even if the alcohol abuse did not warrant a separate diagnosis, it was nonetheless a separate factor preventing Mr Sharp from continuing to undertake work. So understood, no error in the AAT’s application of the ‘alone test’ for the purposes of s 24(1)(c) of the Act has been established.

4.3    Question of Law 2: alleged failure to consider whether Mr Sharp did not satisfy the alone test because his substance abuse disorder was a causative factor

55    The Commission alleged by ground 2 of the Amended Notice of Appeal that:

(a) by failing to consider and resolve the submissions advanced on behalf of the [Commission] at hearing that:

iii.    [Mr Sharp] suffered from a separate, non-accepted condition of “substance abuse disorder” and that disorder prevented, or contributed to preventing, [Mr Sharp] from continuing to undertake the remunerative work that he had been undertaking.

the Tribunal failed to consider submissions that were seriously advanced by the Applicant and worthy of consideration.

(Grounds abandoned by the Commission and in strikethrough omitted)

56    It is not in dispute that the Commission seriously advanced submissions that Mr Sharp suffered from a separate, non-accepted condition of substance abuse disorder which prevented him from continuing to undertake his remunerative work. However, it follows for the reasons given with respect to the first question of law that the AAT did in fact consider the Commission’s submissions to this effect and rejected them by a careful consideration of the evidence upon which those submissions relied.

4.4    Question of Law 2A: whether the finding at [67] of the AAT’s reasons is illogical or irrational

57    The AAT found at [67] that:

Dr Smith agreed that the applicant’s psychiatric condition affects his ability to work but noted that, nonetheless, he had in fact been able to engage in work in a productive manner for some years. Dr Smith, in my view, however did not take into account the failure of the Applicant to sustain his roles. Dr Smith considered that the applicant’s capacity for work would be significantly enhanced if he ceased his reliance on alcohol and considered the applicant’s alcohol use disorder as the main factor that causes him to be impaired at work. In my view this is unsupported by the applicant’s history of job difficulties and ultimately, job loss, in circumstances where there was no evidence that, at the time, he was abusing alcohol.

58    The challenge to paragraph [67] by the Commission focused upon the last sentence and in particular the statement that there was “no evidence that, at the time, he was abusing alcohol” (emphasis added). It was said that that statement was not open on the evidence before the AAT and was therefore irrational or illogical (ground 3, amended notice of appeal). This ground expressly proceeded on the basis that the reference to “at the time” at [67] “appears to be the time at which the Respondent [Mr Sharp] stopped working”. That construction was said to be correct on the basis that the reference to “ultimately, job loss” in the last sentence must be a reference to the loss by Mr Sharp of his job on 20 June 2014. In this regard, counsel for the Commission relied in particular upon the fact that the AAT referred to Mr Sharp’s “job loss” in the singular in contrast to the earlier reference in the same sentence in the plural to the “history of job difficulties”. As I later explain, the Commission submitted in the alternative in support of ground 4 that the AAT’s failure to explain what is meant by the phrase “at the time” is unclear and illustrative of the failure by the AAT to explain the basis of its decision.

59    Counsel for Mr Sharp, however, submitted that read in the context of the decision as a whole, the AAT was referring to its earlier discussion of the applicant’s history of job difficulties and earlier job losses, and not to the time at which Mr Sharp stopped working on 20 June 2014. I agree. In my view, fairly read, the last sentence of paragraph [67] was intended to refer to the applicant’s earlier history, i.e., the applicant’s history of job difficulties and ultimately the applicant’s history of job loss. That history, as Mr Sharp submits, is detailed earlier in the AAT’s reasons at [13]-[20] and included relevantly the following.

(1)    During his service with the RAAF, Mr Sharp experienced some events to which he attributed his anxiety condition. He was hospitalised at that time and since then has never been free from his anxiety symptoms (at [14]).

(2)    After he left the RAAF he had a number of roles mainly in the public sector until 1996 when he worked for private company.

(3)    In 2002 to 2003 he operated his own company but it was not successful, he said because of his anxiety issues (at [16]).

(4)    In 2005 he occupied the position of Director of Property, an important position with a government department, but started having problems with his staff and was unable to cope, being anxious and worrying all the time. This contract was terminated (at [17]).

(5)    In 2008 he had a contract position as the National Property Manager for the Family Court but was not successful in applying for permanent position. One of the difficulties was that his flying phobia affected his ability to undertake the interstate visits which the job required and he had experienced panic attacks (at [19]).

60    None of the earlier instances of job losses identified at paragraphs (3), (4) and (5) above identified alcohol abuse as impacting upon Mr Sharp’s capacity to undertake that work but instead were tied to his anxiety.

61    By contrast, the applicant did not “lose” his last job with the Health Insurance Commission. Rather, after a period during which he was experiencing extreme difficulty with his work, he decided to give up work and, instead of ceasing work immediately, commendably undertook transition and succession arrangements despite his difficulties in doing so. Furthermore, as counsel for Mr Sharp emphasised, the AAT found at [62] that, while Dr Thomson’s practice from 2004 shows multiple entries in relation to alcohol consumption, “[t]he consumption history was not consistent, and appears to have significant fluctuated over time, including with periods of complete abstinence.”

62    This construction of [67] of the AAT’s reasons is consistent with its reasons in the context of considering s 24(1)(b) for rejecting Dr Smith’s opinion that Mr Sharp has the capacity to work for at least 8 to 20 hours per week given that he had been able to work despite his long-standing psychiatric symptoms, namely: that Dr Smith had not referred to the fact that “many of the Applicant’s jobs had ended due to his anxiety or because of workplace disagreements” (at [55]). In other words, the AAT seems to have taken the same consideration relevantly into account in rejecting Dr Smith’s opinion as to the extent to which Mr Sharp’s psychiatric condition affected his ability to work both in the context of its consideration of the criteria in s 24(1)(b) and (c) at paragraphs [55] and [67] respectively.

63    That being so, with respect to his earlier history as set out above, Mr Sharp correctly submitted that it was open to the AAT to find that Dr Smith’s opinion that Mr Sharp’s alcohol use disorder was the “main factor” causing him to be impaired at work, was not supported by Mr Sharp’s history of job difficulties and job loss where there was no evidence that at those earlier times when he lost his job he was abusing alcohol. It follows that I do not consider the finding at [67] of the AAT’s reasons to be illogical or irrational.

4.5    Question of Law 3: alleged failure to provide reasons

64    The Commission’s position with respect to the third question of law is set out in ground 4 of the amended notice of appeal alleging that the AAT had failed to provide reasons or adequate reasons in breach of its obligation under s 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) on the following bases:

(a)    the AAT failed to expose the evidence or other material on which its finding at [70] (quoted above at [34]) was based, namely, that Mr Sharp’s incapacity from anxiety neurosis is the only factor preventing him from continuing to undertake work;

(b)    it was not possible to discern the reasoning upon which the finding at [70] was based where the Tribunal at [62] had accepted Mr Sharp’s inappropriate consumption of alcohol; and

(c)    the parties are left to speculate as to the reasons why the finding at [70] was made, particularly given that the alone test will not be satisfied if there is a non defence-caused factor which prevented or contributed to preventing Mr Sharp from continuing to undertake the relevant remunerative work even if it is of secondary weight only and insufficient in itself to prevent Mr Sharp from continuing.

65    Section 43 of the AAT Act imposes an obligation on the AAT to give reasons either orally or in writing for its decision. Section 43(2B) provides that where the Tribunal gives written 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.” In considering the purpose of the equivalent provision under the Migration Act 1958 (Cth), McHugh, Gummow and Hayne JJ in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 at [69] explained that:

It ensures that a person who is dissatisfied with the result at which the Tribunal has arrived at 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.

66    Those words are equally apt to describe the purpose of the obligation to give reasons under the AAT Act, with a failure to provide adequate reasons complying with s 43(2) constituting an error of law. As Kenny, Murphy and Beach JJ said in Summers:

110. … although this was not alleged in the appeal, an error of law may be seen in the Tribunal’s failure to provide adequate reasons for its determination … as required by s 43(2) of the AAT Act. A failure to state reasons for a decision — at least in circumstances where a statement of reasons is a requirement of the exercise of the decision-making process — constitutes an error of law. One of the central objects behind the statutory obligation to give reasons is to expose the Tribunal’s reasoning process which may facilitate appeals on a question of law or judicial review. The Tribunal was required to explain what it decided on the issue of cl. 6(a) and why, and in our view it did not: Preston v Secretary, Department of Family and Community Services (2004) 39 AAR 177 at [21] per Stone J; Hill v Repatriation Commission (2004) 207 ALR 470 at [20] per Mansfield J; Civil Aviation Safety Authority v Central Aviation Pty Ltd (2009) 179 FCR 554 at [49] per Bennett, Flick and McKerracher JJ; Dornan and Others v Riordan and Others (1990) 24 FCR 564 at 573-574 per Sweeney, Davies and Burchett JJ.

67    These principles are not in issue.

68    However, the Commission contended that the AAT had failed to comply with the requirement to provide reasons under s 43(2), submitting that:

33. In the present case, it is not possible to “identify with certainty” the Tribunal’s process of reasoning. The Repatriation Commission is left to speculate as to what the Tribunal decided [in] relation to its submissions that:

33.1 Mr Sharp suffered from a separate, non-accepted disease, namely substance abuse disorder; and

33.2 the substance abuse disorder contributed to preventing him from continuing to engage in repatriation work.

69    The Repatriations Commission also submitted that it was not possible to understand what was meant by the words “at that time” in the final sentence of [67] of the AAT’s reasons.

70    For the reasons earlier given I consider that fairly read in context, the meaning of the final sentence in [67] of the AAT’s reasons is clear. Nor, as the analysis earlier given in these reasons of the AAT’s reasons demonstrates, do I consider that the AAT has failed otherwise to comply with its obligation to provide reasons in accordance with s 43(2B) of the AAT Act.

5.    CONCLUSION

71    For the reasons given above, the appeal under s 44 of the AAT Act by the Repatriation Commission must be dismissed. I will make orders as to costs after affording the parties the opportunity to make submissions on the issue of costs, as requested at the hearing.

Associate:

Dated:    4 April 2017