FEDERAL COURT OF AUSTRALIA
Saxton v Repatriation Commission [2017] FCA 904
ORDERS
Applicant | ||
AND: | Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The appeal under section 44 of the Administrative Appeals Tribunal Act 1975 (Cth) is allowed.
2. The decision of the Administrative Appeals Tribunal given on 29 October 2015 is set aside.
3. On or before 4pm on 14 August 2017, the respondent is to file and serve short written submissions as to costs if so advised.
4. In the event that written submissions are filed and served pursuant to order 3 above, the applicant is to file and serve short written submissions in response on or before 4pm on 21 August 2017.
5. The issue of costs will be determined on the papers.
THE COURT NOTES THAT:
6. The Court will make an order awarding the applicant his costs as agreed or assessed unless the respondent files and serves written submissions pursuant to order 3 above.
7. The parties are to file and serve draft minutes of order otherwise to give effect to these reasons as agreed or, if not agreed, as proposed by each party accompanied by short submissions.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
PERRY J:
1 The applicant, Commander (CMDR) Peter Saxton, served in the Royal Australian Navy (Navy) as a Reservist. He had periods of continuous full time service which included deployments to East Timor. The applicant suffers from a number of medical conditions, including Post Traumatic Stress Syndrome (PTSD), which have been accepted as war-caused injuries under the Veterans’ Entitlement Act 1986 (Cth) (VE Act).
2 By an application to the Repatriation Commission dated 20 May 2013, the applicant sought an increase in his pension in respect of those medical conditions beyond 90% of the General Rate. At that time, the applicant was 67 years of age. His application was refused, as was his application for review to the Veterans Review Board. The Administrative Appeals Tribunal, Veterans’ Appeals Division, (the Tribunal) affirmed the Board’s decision that the applicant did not qualify for the special or immediate rate of pension under the VE Act on the ground that he had not met the criteria in s 24(2A)(g) or s 23(3A)(g) respectively. Those sections relevantly required the applicant to demonstrate that, when he stopped undertaking his “last paid work”, he had been working for his employer or on his own account for a continuous period of at least 10 years before he turned 65.
3 This is an appeal on questions of law under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) from the Tribunal’s decision. By his further amended notice of appeal, the applicant submits that the Tribunal made a number of errors of law, namely:
(1) misconstruing s 24(2A)(d) of the VE Act by failing to find that the applicant’s Navy work alone was his “last paid work” for the purposes of that section;
(2) misconstruing s 24(2A)(g) of the VE Act by:
(a) taking into account only the applicant’s civilian work when assessing that statutory criterion, given that the Tribunal had found that the applicant’s “last paid work” had comprised both his Navy work and his civilian work; and
(b) failing to take into account the applicant’s Navy work, given that the Tribunal had found it was “last paid work”;
(3) failing to take into account a relevant consideration, namely, the applicant’s Navy work, when assessing s 24(2A)(g) of the VE Act, given that the Tribunal had found that work was “last paid work”; and
(4) failing to comply with the requirements of procedural fairness by finding that the applicant’s last paid work was his civilian work, as well as his Navy work, in circumstances where that factual conclusion was not reasonably open on the evidence and no notice was given that the Tribunal would depart from what were, in essence, agreed facts to the contrary.
4 I note that the relevance of the issue identified at [3(1)] above is that s 24(2A)(d) defines the words “last paid work” for the purposes not only of subs (d), but prima facie also for subs (g). It is not the case that the Tribunal refused the applicant’s claim for a higher rate because of any failure to meet the criterion in s 24(2A)(d).
5 For the reasons set out below, the appeal should be allowed. While I have allowed the appeal on the grounds identified at [3(2)] above, I have first considered whether the appeal should be allowed on ground 1 and the related ground 5, because the question of how “last paid work” is construed in s 24(2A)(d) is relevant to the question of how the phrase should be construed in s 24(2A)(g).
2. RELEVANT LEGISLATIVE PROVISIONS
6 Division 4 (ss 21A-29) of Part II of the VE Act deals with rates of pensions payable for war-caused injuries and war-caused diseases.
7 An application may be made under s 15 of the Act for an increase in the pension payable to a veteran such as the applicant who is already in receipt of a pension under Part II of the VE 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).
8 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, 27 and 30 are applicable in the particular case.
9 For present purposes, therefore, s 19(5B) directs that an assessment must be made in accordance with whichever of s 23 (intermediate rate of pension) or s 24 (special rate of pension) applies to the case in question.
10 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.
11 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.
12 Finally, s 19(5D) provides that after making an assessment under subs (5C), the Commission must determine that pension is payable at the rate assessed.
13 The criteria for the payment of the pension at the special rate is contained in s 24 of the Act. Section 24(1) relevantly provides that:
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;…
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;
…
14 As the applicant was over 65 years of age when he applied for the increased rates, it was necessary for him also to satisfy the criteria in s 24(2A) which imposes a more stringent test than that imposed by s 24(1)(c). Section 24(2A) relevantly provides that:
(d) the veteran is, because of incapacity from war-caused injury or war-caused disease or both, alone, prevented from continuing to undertake the remunerative work (last paid work) that the veteran was last undertaking before he or she made the claim or application; and
(e) because the veteran is so prevented from undertaking his or her last paid work, the veteran is suffering a loss of salary or wages, or of earnings on his or her own account, that he or she would not be suffering if he or she were free from that incapacity; and
(f) the veteran was undertaking his or her last paid work after the veteran had turned 65; and
(g) when the veteran stopped undertaking his or her last paid work, the veteran:
(i) if he or she was then working as an employee of another person—had been working for that person, or for that person and any predecessor or predecessors of that person; or
(ii) if he or she was then working on his or her own account in any profession, trade, employment, vocation or calling—had been so working in that profession, trade, employment, vocation or calling;
for a continuous period of at least 10 years that began before the veteran turned 65;…
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 and that it is a criterion of s 23 that s 24 does not apply to the veteran. In this regard, s 23(3A) corresponds with s 24(2A).
16 It was not in issue that generally speaking, all of the criteria in ss 23 or 24 must be met before an applicant is eligible for payment of the pension at the intermediate or special rate respectively, and that the Tribunal has no discretion in this regard. In this case, the Tribunal found that the applicant had not satisfied the criteria in s 24(2A)(g) and s 23(3A)(g).
17 The purpose of s 24(2A) (and its equivalent in s 23(3A)) is to establish an exception for those who have engaged in remunerative work after the age of 65 to the general rule that pensions at the special and intermediate rates will not be granted to veterans over 65: Second Reading Speech, Veterans Affairs (1994-95 Budget Measures) Legislation Amendment Bill 1994 (Cth) (the 1994 Bill) Hansard (HR) 9 June 1994 at 1809; Explanatory Memorandum, 1994 Bill, at 23. In particular, under s 23(3A) and s 24(2A), the circumstances in which veterans over 65 can claim the intermediate or special rate are more limited than for those under the age of 65 by virtue of the more stringent criteria. That notwithstanding, the purpose of s 24(2A) is still to benefit those who have worked past 65 years of age and who otherwise meet the criteria.
3.1 The applicant’s military service
18 The applicant was trained as a property valuer. He also served in the Navy as a Reservist between 1994 and 2013. Over that period of time, the applicant was promoted within the Navy. He rose to the rank of Commander in 2008 and also became a senior officer within the Naval intelligence community, ultimately becoming Director Navy Communication Intelligence Capability Support.
19 The applicant’s evidence before the Tribunal was that he effectively worked full-time for the Navy between 1994 and 2010, including a deployment to East Timor, and worked part-time for the Navy between 2010 and 16 May 2013.
20 The applicant also gave evidence that he held part-time civilian positions between 2006 and 2014. The Tribunal summarised his evidence on his civilian employment history as follows:
9. From about 2006 he also worked 15-20 hours a week as a part time project executive for a developer, but in November 2008 the developer suffered a financial collapse and that work ceased. In October 2009 he secured another part time role with a local firm of financial advisers, working 10-20 hours per week, although the role lasted only 2 months, he said, because he was required to attend the firm’s office.
…
11. Between 2010 and 2013 he said he worked virtually full-time hours - split between his Navy job and his work as a property consultant although, he said, the majority of his income was derived from his Navy work.
…
13. In the latter half of 2012 he also worked for a firm of engineers and property development managers (the developer), averaging about 4-5 hours a week. …
14. At the end of that year he secured other part time work with a real estate agent, working 6-8 hours a week. The work was mainly on Saturdays and proved ‘disastrous’, and he left after a few weeks.
15. In January 2013 he again secured further part time work – about 7 hours a week – as a consultant with the developer. It appears that that work continued for some months, according to his statement – to at least until June.
21 As I later explain, the applicant takes issue with the proposition that it was open to the Tribunal to find that his work continued until at least June 2013, as found by the Tribunal at [15].
22 On 5 February 2013, the applicant requested a transfer to the retirement list, and subsequently retired from the Navy on 16 May 2013, the day after his 67th birthday. After retiring from the Navy, the Tribunal found that:
17. In January 2014 he secured yet another project with the developer for work not exceeding 7 hours per week, according to his employment contract. His project manager role was to ‘resurrect’ a stalled development. He worked in a large dilapidated building with no one else on his floor. He could work in solitude; he could listen to music, exercise and even take his dog to work. He had little contact with his employer until there was a verbal altercation in December 2014 and he resigned. He has not worked since that time.
23 First, it was not in dispute before the Tribunal that the degree of incapacity resulting from the applicant’s accepted war-caused conditions was at least 70% and that the applicant therefore met the test in s 24(1)(a) of the VE Act: Tribunal’s reasons at [34].
24 Secondly, the Tribunal found that of itself alone, the applicant’s PTSD rendered him incapable of undertaking remunerative work for more than 8 hours a week and accordingly that he met the criterion in s 24(1)(b): Tribunal’s reasons at [44].
25 Thirdly, the Tribunal considered that it was necessary for the applicant to demonstrate that his “incapacity from war-caused conditions alone is preventing him from continuing to undertake his last remunerative work that he was undertaking and is therefore suffering a loss of salary or wages or earnings that he would not be suffering if he were free from that incapacity: s 24(2A)(e)”: Tribunal’s reasons at [45] (emphasis in the original). As to the applicant’s last remunerative work, the Tribunal considered that “[o]n a plain reading it is clear that s24(2A)(d) is concerned with any paid work the applicant was undertaking before he lodged his application for an increase in the rate of his pension” (Tribunal’s reasons at [49]).
26 After summarising the parties’ respective submissions on the issue, the Tribunal then found that:
52. The history of CMDR Saxton’s property project work appeared to be on the basis that he was engaged to undertake projects as they arose. Evidence he gave to the VRB and his accounts of his civilian work in Dr Altman’s clinical notes suggest he had averaged around 10 hours per week from March 2012 with the developer. Prior to June 2013 he also wrote that he was working between 10 and 15 hours per week for the developer. He wrote that he had resigned from his significant Navy role and was working in a low key home-based support role for about 13 hours per week. It appears then that before he left the Navy he was working virtually equally in his Navy and civilian roles. It is therefore appropriate to consider his ‘last paid work’ was both the Navy and civilian work.
27 Having so found, the Tribunal was satisfied that the applicant was prevented from continuing his last paid work by virtue of his PTSD from mid-December 2014 and that he suffered a loss of wages or salary of his own account that he would not be suffering if he were free of his incapacity from PTSD. Accordingly the effect of the Tribunal’s decision is that it found that the criteria in ss 24(2A)(d), (e) and (f) were satisfied (at [54] and [58]).
28 However, the Tribunal found that the applicant did not qualify for a special rate pension because he had failed to satisfy s 24(2A)(g) on the grounds that:
59. Subsection 24(2A)(g) provides, in effect, that the veteran must have been working in the same role for a continuous period of 10 years before turning 65.
60. The evidence was that CMDR Saxton commenced property consulting in about 2006 and worked for the developer from possibly about 2010, or for its predecessor from about 2008. In any event, he has neither worked for the same employer (per s24(2A)(g)(i)) nor has been engaged on his own account (per s 24(2A)(g)(ii)), for a continuous period of 10 years that began before he turned 65.
29 The Tribunal concluded that:
61. Consequently, the applicant, not having satisfied all the requirements for the Special Rate, cannot succeed. The same considerations also preclude CMDR Saxton meeting the criteria for the Intermediate Rate.
30 Finally, I note that the Tribunal misstated the legislative requirement at [59] of its reasons, as the respondent pointed out. However, that misstatement was not said by the applicant to have sounded in reviewable error and is properly regarded in my view as mere looseness of language rather than as indicative of reviewable error. The focus of the applicant’s challenge was upon the finding at [60] which formed the basis of the finding at [61] that he did not qualify for the pension at a higher rate.
4. QUESTIONS OF LAW 1 AND 5: CONSTRUCTION AND APPLICATION OF S 24(2A)(d) OF THE VETERANS’ ENTITLEMENTS ACT
31 The applicant challenges the Tribunal’s finding that his last paid work for the purposes of s 24(2A)(d) of the VE Act was his civilian work, as well as his Navy work, on two grounds:
(1) the Tribunal misconstrued s 24(2A)(d) of the VE Act by failing to find that the applicant’s Navy work was the “last paid work” for the purposes of that section, despite the undisputed evidence (ground 1, further amended notice of appeal);
(2) the finding was made in breach of procedural fairness in circumstances where the finding was not reasonably obvious on the evidence and the Tribunal gave no notice to the parties that it would depart from what were, in essence, agreed facts to the contrary (ground 5, further amended notice of appeal).
32 As will be apparent, the question of whether the evidence in question was “undisputed” overlaps to some degree with the question of whether there was a breach of procedural fairness as the latter is also premised upon the proposition that the Tribunal departed from so-called “agreed” or undisputed facts.
4.2 Did the Tribunal misconstrue “last paid work” in s 24(2)(d) of the Veterans’ Entitlement Act?
4.2.1 The parties’ submissions
33 As the applicant pointed out, the phrase “last paid work” is defined in ss 23(3A)(d) and 24(2A)(d) of the VE Act and is picked up in the criteria in subs (e) to (g) inclusive of those provisions. The phrase is not used elsewhere in the VE Act. It was not in issue that a veteran’s “last paid work” within the meaning of s 24(2A) of the Act (quoted at [14]) is “the remunerative work… that the veteran was last undertaking before he or she made the claim or application”, notwithstanding the location in the section of the defining term, “last paid work”: Carter v Repatriation Commission [2001] FCA 992; 113 FCR 314 (Carter) at [24] (Branson J). The term “remunerative work” in turn is broadly defined in s 5Q(1) of the Act to include “any remunerative activity.” In this regard, in Banovich v Repatriation Commission (1986) 69 ALR 395 at 402 the Full Court considered with respect to the predecessor provision to s 24 of VE Act (cl [1](b)(iii) of Schedule 2 to the Repatriation Act 1920 (Cth)) that:
… it is, in our opinion, erroneous to read the phrase “remunerative work that the member was undertaking” as referring to a particular job with a particular employer. The term “remunerative work” is used in the Schedule in a context which indicates an intention to refer to work generally… Consistently with that use, the phrase “remunerative work which the respondent was undertaking” should be read as a reference to the type of work which the member previously undertook and not to any particular job.
34 That being so, the applicant submitted that:
… the undisputed evidence (conceded in oral address) was that:
(a) the applicant ceased his civilian role on 30 April 2013;
(b) the applicant ceased his Navy role on 15 May 2013; and
(c) the applicant made his application on 20 May 2013.
35 Given that evidence, the applicant submitted that the Tribunal misconstrued s 24(2A)(d) by failing to find that his Navy work was the “last paid work” for the purposes of those provisions and therefore for the purposes also of subs (g).
36 Underlying these contentions, as the respondent submits, are two propositions, namely that:
(1) only one remunerative activity can comprise a last paid work; and
(2) the undisputed evidence before the Tribunal establishes that remunerative activity as having been the applicant’s Navy service.
37 The respondent contends that both propositions should be rejected and that no concession to the contrary was made. I agree for the following reasons.
4.2.2 Construction of “last paid work”
38 First, it is true that, by focusing upon “last paid work”, the Full Court in Grant v Repatriation Commission [1999] FCA 1629; (1999) 57 ALD 1 (Grant) considered that s 24(2A)(d) of the VE Act may be more restrictive than s 24(1)(c), the former being confined to the remunerative work that the veteran was “last undertaking before he or she made the claim…”. Nonetheless, nothing in the terms or context of s 24(2A)(d) or s 23(3A)(d) requires that “last paid work” be restricted to a single “remunerative activity” to use the language of the definition of remunerative work in s 5Q(1). To the contrary, to restrict “last paid work” in s 24(2A)(d) to a single remunerative activity would mean that, even where the veteran was plainly undertaking two distinct remunerative activities at the relevant time, the decision-maker would have to disregard the reality of the situation and endeavour to choose which should be treated as the “last paid work”. Yet the provision provides no means by which such a choice could be made. That construction would undermine the purpose of s 24(2A)(d). The sub-section is concerned with the reason which prevented the veteran from continuing to undertake her or his last paid work: see at [64]-[65] below. If on the evidence the veteran was undertaking more than one remunerative activity at the relevant time, then the reason why she or he can no longer engage in either of them is logically relevant to the question of whether the veteran should be compensated for the service related injury.
39 Consistently with this construction, while Grant was not a case where (as here) the Tribunal found that two remunerative activities were being undertaken when the claim was made, nonetheless the Full Court considered that:
9. Determination of the “remunerative work” referred to in s 24(2A)(d) requires the characterisation of the specific remunerative activity or activities that the veteran was last undertaking before making the claim or application rather than of the capacity in which that work was undertaken. The particular capacity in which the work was undertaken is dealt with as a separate criterion in s 24(2A)(g).
(emphasis added)
See also White v Repatriation Commission [2001] FCA 1585; (2001) 114 FCR 494 at 500 (Conti J).
40 Secondly, it is plain from the width of the definition of “remunerative work” as meaning “remunerative activity”, that remunerative activity and, therefore, last paid work, are not limited to full-time employment but rather can embrace activities undertaken pursuant to part-time or casual arrangements. Equally, I can see no reason why it might not embrace a part-time or casual arrangement that operates on an “as needs” basis, that is, where there is an ongoing relationship whereby the employer allocates blocks of work to the veteran from time to time as and when the veteran’s services are required. The applicant submits that this construction would not further the beneficial purposes of s 24(2A). That the VE Act is beneficial legislation is not in issue. As for example, Gray J noted in Counsel v Repatriation Commission [2002] FCAFC 201; 122 FCR 476 (Counsel):
18. The VE Act is beneficial legislation, establishing a system whereby those who rendered war service have their financial and other needs looked after, to the extent to which those needs are not met because of war caused disabilities. It is to be expected that those suffering such disabilities will find that their earning capacity diminishes. The scheme of the VE Act is to compensate them, depending upon the degree of their disabilities and the diminution in their earning capacity.
See also e.g. Counsel at [57] (Carr J); Hill v Repatriation Commission [2004] FCA 832; (2004) 82 ALD 60 (Hill) at [44] (Mansfield J).
41 However, the question of whether the construction would promote the beneficial purpose of the Act is not necessarily answered by whether the Tribunal’s construction would support the applicant’s claim in his particular circumstances where he was found to be undertaking two remunerative activities when he made the claim. In my view that purpose is better promoted by a construction which leaves open the possibility that a person may be regarded as undertaking a remunerative activity for the purposes of the provision even during periods where there is a gap in her or his paid work. Thus, for example, the fact that work may be unavailable from time for time for a veteran in a part-time consultancy role will not necessarily mean that the veteran cannot satisfy the requirement in s 24(2A)(g) of undertaking her or his last paid work for a continuous period of 10 years before turning 65, as the Full Court held in Thomson v Repatriation Commission [2000] FCA 204; (2000) 96 FCR 550 at [12] (Thomson). That being so, I consider that the construction adopted by the Tribunal on this issue must be preferred: see s 15AA(1) of the Acts Interpretation Act 1903 (Cth): see also Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 (Project Blue Sky) at 384 [78] and Certain Lloyd’s Underwriters v Cross [2012] HCA 56; 248 CLR 378 at [23]-[26] (French CJ and Hayne JJ).
4.2.3 Whether the undisputed evidence is that the applicant ceased his civilian work on 30 April 2013
42 Nor do I accept the applicant’s contention that the ‘undisputed evidence” was that he ceased civilian work on 30 April 2013 before he made his claim,.
43 First, notwithstanding passages in the applicant’s evidence in cross-examination before the Tribunal that he “stopped work with PDSA” on 30 April 2013 until January 2014, the applicant’s contention does not take account of the totality of his evidence. In particular, under the heading “June” in his statement dated 24 February 2015 in the Tribunal proceedings, the applicant sought to rebut the suggestion by Dr Mouroukas that he did not have difficulty remaining in the workforce, by explaining that:
• I had retired from the Navy (my primary employment) a month earlier;
• The work I actually undertook (approx.. 10 hour’s week over 7 days with PDSA [i.e. the property developer] on a part time basis) was carried out from home;
…
44 The clear implication from the applicant’s statement was therefore that he considered that his work with PDSA had continued into June 2013 and therefore past the date on which he made his claim. Furthermore, in his oral evidence in chief, the applicant said that his statement was true and that there were no changes or corrections to be made to it. As such, there is no error in the finding at [15] of the Tribunal’s reasons that from his statement it appeared that the applicant’s work as a consultant with the developer continued at least until June.
45 That evidence was also consistent with the information provided by the applicant in his claim form. Specifically, in his claim for a disability pension dated 20 May 2013, the applicant answered “yes” to the question “Are you currently employed?”, identifying his “current employer” as “Property Development Systems Australia” (PDSA). Furthermore, in answer to question 29 in the claim form asking for details of his employment history, the applicant stated that he was employed part-time with PDSA from “2012” to “present”. In addition, in an employment questionnaire dated 13 June 2013, the applicant indicated that he worked between 8 to 12 hours per week “but closer to 8”, giving the name of his current or most recent employer as PDSA, and striking through question 8 which asked “If you are not currently working, when did you cease work and why?”.
46 Secondly, even leaving aside the applicant’s statement and these other documents, I do not accept that the undisputed evidence before the Tribunal established that the applicant’s last paid work was his Navy service. The applicant gave evidence in cross-examination that he worked “spasmodically” for the one organisation, PDSA, “on a demand basis according to whatever work they had on that was within my field or within my capability in their eyes”, agreeing that every time he worked for PDSA there was “a bit of a block at the time”. He also said that he was paid by the hour until the permanent part-time contract with PDSA in January 2014. He further gave evidence that he secured part-time work with PDSA in January 2013 and that there was then a gap from 30 April 2013 until January 2014:
[Mr O’Reilly] And that lasted until when, till June, till May?--- [Mr Saxton] Till about – only just for a couple of months.
Only a couple of months?---From memory. I’d have to check my records, but it was just a short period of time. As a matter of fact I think I can give you the accurate – I stopped work with PDSA after restarting in January 2014, on 30 April 2013.
So just to get that year right, 2013, 30 April 2013?---Yes, that’s when I stopped, yes. Correct. Yes. But then there was a gap, then I restarted again, the stop start business, in January 2014.
So there’s a gap between 30 April 2013, and you restarted on January 2014?---That’s correct, yes.
47 Subsequently in a passage in cross-examination on which the applicant placed particular weight, the applicant gave evidence as follows:
[Mr O’Reilly] So at the time your claim form went in, the time the claim was lodged, you weren’t actually working for anyone? ---[Mr Saxton] Yes, correct.
And so your claim form went in on 20 May 2013. We ascertained that before?---Yes.
So at the time your claim form went in, the time the claim was lodged, you weren’t actually working for anyone?---Yes, correct.
And further, obviously you have worked for the Navy since that time?---Correct.
But you did restart with PDSA in January 2014?---Correct.
And you worked through until December, 9 December?---Correct, yes.
And after 9 December 2014, nothing. And so when we turn to page 10 of your statement, Commander, we see up the top there, 2014 is the heading?---Yes.
And under that heading, the first sentence is – we’ve referred to this before:
Six months after retiring from Navy I secured again a job in the property sector.
?---Yes.
Again with PDSA.
?---Yes.
So that’s now placed in a more detailed context, isn’t it, from what you’ve been saying?---Yes.
Because you retired from the Navy in May 2013, and at that time, after that date you weren’t working for anyone until you started with PDSA in January 2014?--- Yes.
48 It can be inferred from the line of cross-examination pursued and the manner in which the respondent conducted its case before the Tribunal that the respondent did not dispute that there was a gap in the work undertaken by the applicant for PDSA between 30 April 2013 and January 2014. However, the intermittent nature of the applicant’s consultancy work with PDSA gave rise to a question as to how that work was to be characterised for the purposes of s 24(2A) and, if need be, s 23(3A) of the VE Act: see Grant at [9] (quoted at [39] above). That issue was squarely identified by the respondent’s counsel, Mr O’Reilly, in closing address who submitted that:
He was doing in the respondent’s submission a combination of things – a number of things. He was essentially being – working in the navy and also working in part-time work. The issue that then arises is – broadly speaking – in relation to the more stringent provisions and restrictions of section (2A), what was his last paid work?
49 The respondent then submitted that, contrary to the applicant’s position, both his civilian and Navy work should be regarded as his last paid work in the following passage:
… there is still the issue then in this unusual circumstance in the respondent’s view where you’ve got two kinds of work or two different jobs, what is the last paid work? The applicant is saying the last paid work is the navy work because the provision says in section 24(2A)(d) the remunerative work that the veteran was last undertaking before he or she made the application.
I don’t think it’s the contemplation of parliament is that what we need to do is have a race between which day comes first or second. The respondent submits that the applicant hadn’t actually ceased work. He was working in two areas harmoniously. His evidence was that he was – despite – well, in addition to starting on the date in January 2014 with the next contract with PDSA, he was working for PDSA in 2013. Indeed, he started in January on a contract there and linked up his records to conclude that he actually ceased working with them – or that contract concluded on 30 April 2014.
…
I think the more – with an eye to reality under (indistinct), the approach here is best expressed – well, the best approach would be that clearly Mr Saxton was doing two things. He was working for the navy and had been doing so for 19 years in a particular way in the last few years. Additionally he was working part-time doing essentially property consultations or project work with a number of different companies but mainly with PDSA. Spasmodically as he said over the years.
50 The applicant did not object at the Tribunal hearing to the respondent raising this issue. However, in closing address in reply the applicant submitted that the respondent “seems to have ignored that part of the provision that defines what the last paid work is. And I said before…. [i]t’s the last that the veteran was last undertaking before they made the claim.” The Tribunal therefore accurately summarised the parties respective positions on this issue in its reasons where it stated that:
50. The applicant submitted that CMDR Saxton’s last paid work was his work with the Navy. The respondent submitted, on the other hand, that over the years CMDR Saxton had consistently, although not necessarily continuously, worked 2 jobs – his Navy work, as well as other property project contract work, and that his ‘last paid work’ should not be limited to his Navy work.
(emphasis added)
51 It follows that the Tribunal did not misconstrue the task required by s24(2A)(d) in determining what was the applicant’s “last paid work” or its equivalent in s 23. It also follows that it was open to the Tribunal on the evidence to characterise the applicant’s work with PDSA as continuing at least to June 2013, notwithstanding that the allocation of blocks of work to him by PDSA was intermittent and that it was not in dispute that the applicant was not undertaking a block of work for PDSA when he made his claim in May 2013.
4.3 Did the Tribunal breach procedural fairness in finding that the applicant’s last paid work comprised two remunerative activities?
52 It is a fundamental principle of procedural fairness that the party liable to be directly affected by a decision is to be given to the opportunity to be heard. As the Full Court held in Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 293; (1994) 49 FCR 576 (Alphaone) at 591-592:
That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material.
(Approved in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 (SZBEL) at [32].)
53 Conversely, the Court in Alphaone pointed out that “[w]ithin the bounds of rationality a decision-maker is generally not obliged to invite comment on the evaluation of the subject’s case”: at 591; see also Danagher v Child Support Registrar [2014] FCA 1408 at [16]. These general propositions were subject to qualification by the Full Court in Alphaone at 591 (approving Jenkinson J in Somaghi Minister for Immigration, Local Government and Ethnic Affairs (1991) 31 FCR 100 at 108-109) in stating that:
1. The subject of a decision is entitled to have his or her mind directed to the critical issues or factors on which the decision is likely to turn in order to have an opportunity of dealing with it…
2. The subject is entitled to respond to any adverse conclusion drawn by the decision maker on material supplied by or known to the subject which is not an obvious and natural evaluation of that material: Minister of Immigration and Ethnic Affairs v Kumar (unreported, Full Court, Federal Court, 31 May 1990); Kioa v West (1985) 159 CLR 550 at 573, 588 and 634.
See also Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; (2011) 241 CLR 594 at [9] (French CJ and Kiefel J)
54 That said the High Court has cautioned against too great a focus upon these two categories: SZBEL at [31] (Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ). Ultimately, the requirements of procedural fairness will turn upon the facts and circumstances of the particular case and the particular statutory framework within which the decision-maker exercises power, as opposed to a priori classifications: SZBEL at [26].
55 These principles were not in issue. The issue is whether, as the applicant contends, the Tribunal’s conclusion that the applicant’s last paid work for the purposes of s 24(2A)(d) was both his work with the Navy and his part-time civilian work was not obviously open.
56 I accept the Minister’s submission that these findings were obviously open on the known material, and that this is a case in which the applicant impermissibly complains of a failure by the Tribunal to inform the parties of its thought processes about the evidence. For the reasons earlier given, the Tribunal accepted the applicant’s evidence as to the intermittent nature of his work with PDSA but was required to address the issue of how that work should be characterised under the Act. As also earlier explained, that issue was specifically raised by the respondent in closing address and the applicant had the opportunity to address that contention in reply. Nor was any objection made by the applicant’s legal representative to the issue being raised by the respondent. It follows that no breach of procedural fairness has been made out.
5. QUESTIONS OF LAW 2 AND 3: DID THE TRIBUNAL MISCONSTRUE S 24(2A)(g) OF THE VETERANS’ ENTITLEMENTS ACT?
57 The applicant submits that if, as I have found, the Tribunal did not err in characterising the applicant’s last paid work as consisting of both his Navy and civilian work, the Tribunal nonetheless fell into error by misconstruing s 24(2A)(g) of the VE Act (quoted at [14] above). Specifically, the applicant contends that the Tribunal took into account only the applicant’s civilian work for the purposes of that provision or failed to take into account a mandatory relevant consideration under subs (g) being the applicant’s Navy work.
58 It was not in dispute before the Tribunal that the applicant’s Navy reserve service met the 10 year requirement in s 24(2A)(g). As earlier explained, the Tribunal found that the applicant’s service commenced in 1994 and continued until his retirement on 16 May 2013 (Tribunal’s reasons at [6] and [16]). The respondent accepted that this aspect of his last paid work clearly satisfied s 24(2A)(g).
59 I also agree with the respondent that, while the Tribunal did not expressly consider whether the applicant’s Navy service met the 10 year rule in s 24(2A)(g), fairly read it can be inferred that the Tribunal did not do so because that matter was not in dispute. For this reason, it is apparent that the applicant could not have succeeded on the third basis identified at [3(3)] above. Rather, the Tribunal apparently approached the matter on the assumption that where an applicant’s last paid work consists of more than one remunerative activity, it is necessary for the applicant relevantly to demonstrate that she or he worked for a continuous period of at least 10 years before turning 65 for each employer or, if working on her or his own account, for each profession. The question, therefore, is whether the assumption that the applicant had to satisfy the requirement under s 24(2A)(g) for both his Navy and his civilian work was correct as a matter of statutory construction.
60 The respondent submits that there is nothing in the text of the provision supporting a construction that the statutory requirement can be satisfied by reference “to part of the last paid work” only and that “the seemingly unique nature of Mr Saxton’s position cannot alter the proper construction of section 24(2A)(g).”
61 In my view, however, the applicant’s construction of s 24(2A)(g) (and equally therefore of s 23(3A)(g)) ought to be accepted.
62 First, it may be accepted that on a strictly literal reading, the reference to “last paid work” in s 24(2A)(g) should bear the same meaning as the phrase in s 24(2A)(d) and therefore that, if a veteran had two separate remunerative activities then both must meet the criteria in s 24(2A)(g). However, while the task of statutory construction must begin with the text, that is not necessarily an end to the task. Rather, “[t]he meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27 at [47]. In this regard, as the plurality said in Project Blue Sky:
69. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”.
63 Furthermore, as their Honours later explained:
78. … the duty of a Court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.
64 Secondly, s 24(2A)(g) has a distinct and different purpose from s 24(2A)(d). As Branson J held in Carter:
26. …The paragraphs [i.e. ss 24(1)(b), (2A)(d) and (2A)(g)] are, in my view, intended to deal with distinct issues. Paragraph 24(1)(b) is concerned with degree of incapacity, s 24(2A)(d) with the reason which prevented the veteran from continuing to undertake his or her last paid work and s 24(2A)(g) with the demonstration of a long-term intention to undertake a particular type of work beyond the age of 65 years.
65 The purpose which her Honour accorded to s 24(2A)(g) is consistent with that ascribed to the provision by the Full Court in Thomson which held that:
15. … If s 24(2A)(g) were concerned only with the continuity of last paid work, then sub-clauses (i) and (ii) would be otiose. All that would have been necessary was a requirement that the undertaking of the last paid work be continuous during the 10 years prior to the relevant date. As explained above, sub-clauses (i) and (ii) make it quite clear that s 24(2A)(g) is concerned with the capacity in which the last paid work was undertaken. The purpose of those subclauses in s 24(2A)(g) appears to be to prevent claims by veterans over 65 years of age that are based on new or recent employment or self-employment (that is, in the present context, less than 10 years in duration).
(emphasis added)
66 Thirdly, as both parties accepted, nothing in the VE Act suggested that the number of remunerative activities comprising “last paid work” under s 24(2A)(d) or amount earned through those remunerative activities affects the calculation of the special (or intermediate) rate of pension; nor is any such proposition to be discerned from any legislative instrument. As the Applicant’s further supplementary submissions submitted (with the agreement of the respondent):
16. That is, either a veteran who satisfied the eligibility criteria in s 24 is entitled to the special rate of pension stated in s 24(4) subject to indexation under s 198, or they are not, regardless of the number of “last paid work” they might be found to have had for the purposes of s 24(2A)(d).
67 Consistently with this, Gray J explained in Counsel with respect to the compensation afforded by the VE Act, that:
18. … The amount of the compensation is not to be calculated by reference to the amount of any actual loss. Rather, the various rates of pension are fixed. While these depend, to a degree, on the extent of the incapacity of the veteran to earn, there is no provision linking the assessment of entitlement to an intermediate rate or a special rate by reference to the actual amount of earnings lost. For the special rate to be applicable, as s 24(2A) shows, it is sufficient for there to be “a loss of salary or wages, or of earnings on his or her own account” that the veteran would not be suffering in the absence of the incapacity.
See also Carr J in Counsel at [54].
68 That being so, the construction for which the respondent contends and adopted by the Tribunal would, with respect, lead to arbitrary and unfair consequences. For example, as here, a veteran who had two “last paid work[s]” for the purposes of s 24(2A)(d) would be precluded from receiving the special rate if only one of the two remunerative activities satisfied s 24(2A)(g), even though the veteran would have been entitled to the higher rate if she or he had been undertaking only the latter at the relevant time. Nor could the fact that the veteran had more than one “last paid work” for the purposes of s 24(2A)(d) bear upon the amount of the special rate. It follows that the Tribunal’s construction does not serve any identifiable purpose. Rather, it undermines the beneficial purpose of the provision, namely, providing compensation for those over 65 whose service related injuries have prevented them from continuing to engage in remunerative activities which they were undertaking post-65, despite having demonstrated a long term intention to work beyond that age. As the applicant submitted:
46. Having regard to the beneficial nature of the legislation… the preferred construction in circumstances where “last paid work” consists of more than one job is that only one of those jobs needs to satisfy sub-section (g) to entitle the veteran to the Special Rate. This construction promotes, rather than restricts, eligibility for the benefit concerned, produces a fairer and more convenient operation, and conforms with the legislative intention.
(Citations omitted)
69 Thus, on the one hand, the purpose of s 24(2A)(d) is promoted by construing “last paid work” as encompassing more than one remunerative activity where the veteran was engaging at the relevant time in more than one such activity: see above at [38]. On the other hand, the purpose of s 24(2A)(g) is best promoted by construing “last paid work” as referring to any one of the remunerative activities found to constitute “last paid work” for the purposes of s 24(2A)(d). While this construction departs from what might otherwise have been the assumption that “last paid work” in s 24(2A)(g) bears the same meaning as in s 24(2A)(d) and might be said to add words not expressed in the section, this construction does not in my view “make an insertion which is ‘too big, or too much at variance with the language in fact used by the legislature’”: Taylor v Owners – Strata Plan No.11564 [2014] HCA 9; 253 CLR 531 at [38] (French CJ, Crennan and Bell JJ). Rather, as their Honours also held in Taylor:
37. Consistently with this Court's rejection of the adoption of rigid rules in statutory construction, it should not be accepted that purposive construction may never allow of reading a provision as if it contained additional words (or omitted words) with the effect of expanding its field of operation.…
38. The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision.
(Citations omitted)
70 For these reasons, it follows that the Tribunal wrongly construed s 24(2A)(g) of the VE Act as requiring that both the applicant’s Navy and civilian work must separately meet the criterion in s 24(2A)(g). As such, the Tribunal failed to ask itself the correct question posed by the legislation, failed to have regard to a relevant consideration being the fact that the applicant’s Navy work met the criterion in s 24(2A)(g), and took into account only the failure by the applicant’s civilian work to satisfy the criterion in s 24(2A)(g). In so far as it was relevant, the Tribunal also erred in the same manner with respect to the construction and application of s 23(3A)(g).
71 For the reasons set out above, the appeal under s 44 of the AAT Act should be allowed and the decision of the Tribunal set aside. I will afford the parties the opportunity to agree or, if need be, to make written submissions as to, the appropriate orders otherwise to give effect to these reasons. Finally, I will make an order awarding the applicant his costs subject to the respondent, if so advised, filing written submissions opposing that course within 14 days of the delivery of judgment.
I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry. |
Associate:
