Burns v Minister for Veterans' Affairs [2025] FCA 1096

1. The Minister submits that Mr Burns' application to the CDDA Scheme was misconceived. As was explained in the Minister's submissions, the CDDA Scheme is not established by legislation but operates pursuant to the exercise of executive power under ss 61 and 64 of the Constitution. It is a non-statutory scheme that allows non-corporate Commonwealth entities to pay compensation in circumstances where a person has suffered detriment as a result of the entity's defective administration when there is no legal requirement to make a payment. The Scheme is administered by Services Australia.
2. Details and guidance for the Scheme's operation are set out in the Department of Finance's "Resource Management Guide No. 409" (RMG 409). These include ([17]):

• a specific and unreasonable lapse in complying with existing administrative procedures that would normally have applied to the claimant's circumstances
• an unreasonable failure to institute appropriate administrative procedures to cover a claimant's circumstances
• giving advice to (or for) a claimant that was, in all circumstances, incorrect or ambiguous
• an unreasonable failure to give to (or for) a claimant, the proper advice that was within the official's power and knowledge to give (or was reasonably capable of being obtained by the official to give).

Relationship with other types of claim against Commonwealth entities

1. If other avenues exist to remedy the defective administration (such as existing Commonwealth legislation or schemes), those options must be investigated before the matter is considered under the CDDA Scheme.

...

1. The CDDA Scheme is not to be used in relation to:

• claims that have previously been determined under the act of grace provisions (see below)
• claims in which it is reasonable to conclude that the Commonwealth would be found liable, if the matter were litigated. Legal matters are considered under the Legal Services Directions 2017 on the basis of legal liability
• claims to offset the payment of any recoverable debt owed to the Commonwealth - even if the debt arose because of defective administration (see below)
• claims to overcome the effects of specific legislative provisions that are found to be flawed. Entities can deal with such matters through statutory remedies, either by seeking amendment of the relevant legislation, with retrospective effect to provide the benefit on the claimant (if appropriate), or submitting the matter to the Department of Finance for consideration under the act of grace mechanism.

1. In his statement of claim filed on 24 March 2025, Mr Burns alleged that the error in the interpretation of s 30C of the VEA constituted "an unreasonable failure to institute appropriate administrative procedures in its application of pension offsetting provisions". Mr Burns did not otherwise point to any lapse or failure in administrative procedures, nor does he claim to have been given incorrect advice or to have been unreasonably denied proper advice. This was a matter noted in the Decision at [25]: "You have not taken issue with the administrative procedures involved in DVA's conclusion that you suffered from the same incapacity as a result of the lumbar spine conditions ...".
2. The Minister submits that Mr Burns' claim is in fact a "legal matter" such that it is governed by the Legal Services Directions 2017. The Minister's submission that the CDDA Scheme simply does not apply to Mr Burns' claim must be accepted, but it is unfortunate that a better explanation of the metes and bounds of the CDDA Scheme is not provided to veterans in the position of Mr Burns.
3. RMG 409, to which a link was provided in the Department's "Preliminary assessment" dated 4 April 2024, provides no explanation to a lay reader as to how one determines whether "it is reasonable to conclude that the Commonwealth would be found liable, if the matter were litigated". Determining whether other legal avenues may be available in circumstances such as these is not straightforward. In supplementary submissions filed by leave on 1 September 2025, the Minister quite properly withdrew the submission in paragraphs 23 and 24 of his written submissions dated 25 July 2025, in which it was argued that the reconsideration power in s 31 of the VEA or the rights of review in Part IX of the VEA are available in respect of the application of the offsetting provisions.
4. Nevertheless, Mr Burns has pursued his "legal matter" through the avenue of judicial review under s 39B of the Judiciary Act, the availability of which he was alerted to by the final paragraph of RMG 409 ([92]).

1. In his oral submissions, Mr Burns contended that the Minister had fallen into jurisdictional error by misinterpreting the applicable sections of the VEA. Mr Burns argued that the Minister erred in concluding that there was no unreasonable failure to institute proper administrative procedures relating to the application of offsetting provisions in his circumstances because of the error of law in the interpretation of s 30C.
2. It was accepted by the Minister that decisions under the CDDA Scheme are amenable to prerogative relief pursuant to s 39B of the Judiciary Act: Davis v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 10; 279 CLR 1; Singh v Minister for Government Services [2024] FCA 368.
3. Mr Burns submitted, consistently with the allegations in the statement of claim, that the Minister erred "by deliberately ignoring the word 'injury' as it applies to section 30C" of the VEA, and "by failing to acknowledge that descriptions of injuries are relevant in the application of section 30C" of the VEA, "in particular with reference to the definition of 'injury' as defined in subsection 5D(1)".
4. Both Mr Burns and the Minister asserted that the offsetting was pursuant to s 30C. Section 30C is in Div 5A of Part II of the VEA. Part II is concerned with pensions for veterans who are incapacitated from a war-caused injury or a war-caused disease, as defined in s 9 (s 13). Mr Burns was not incapacitated during operational, or related, service within the meaning of s 9. Rather, his incapacity stems from physical training. His pension is sourced from Part IV, Div II of the VEA which, in s 70, relevantly provides for the payment of a pension by way of compensation to a member of the Forces who is incapacitated from a defence-caused injury or a defence-caused disease, as defined in s 5D(2).
5. Section 71 provides that Divisions 2A, 3, 6 and 7 of Part II apply to and in relation to pensions payable in accordance with Part IV, that is for incapacity from defence-caused injury or disease, in like manner as they apply to and in relation to pensions payable in accordance with Part II for incapacity from war-caused injury or disease. Those Divisions are concerned with verification determinations, claims for pensions and applications for increases in pensions, reviews of pensions and procedural matters, respectively.
6. Similarly, s 73 provides that Divisions 4 and 5 of Part II apply in like manner to pensions payable in accordance with Part IV. Those Divisions are respectively concerned with rates of pensions payable to veterans and those payable to dependants of a deceased veteran.
7. Section 74 is concerned with the effect of payments by way of compensation or damages on pensions payable under Part IV. In October 1996, when the offset was applied to Mr Burns' Special Rate Pension, s 74 provided, relevantly:

(1) In this section, compensation includes:

(a) any payment in the nature of compensation; and

(b) any damages recoverable at law (including any amount paid under a compromise or settlement of a claim for damages at law), whether from the Commonwealth, a State, a Territory or any other person (whether within or outside Australia), in respect of injury to, or the death of, a person,

but does not include any amount that represents expenses incurred in medical or hospital treatment.

(2) This section applies in relation to a member of the Forces, or a member of a Peacekeeping Force, in respect of the death of the member that was defence-caused, or the incapacity of the member from a defence-caused injury or a defence-caused disease if:

(a) a person is entitled, or 2 or more persons are each entitled, to receive payments by way of compensation in respect of the death of the member or of the incapacity of the member from that injury or disease; and

(b) subject to this section, pension under this Part is being paid or is payable to a person, or to each of 2 or more persons, in respect of the death of the member or to the member in respect of the incapacity of the member from that injury or disease.

(3) For the purposes of this section, where:

(a) a lump sum payment by way of compensation (other than a lump sum payment mentioned in paragraph (3A)(a) or (3B)(a)) is made:

(i) to a person, being a member of the Forces or a member of a Peacekeeping Force, in respect of the incapacity of the member from injury or disease; or

(ii) to a person, being a dependant of a member of the Forces or of a member of a Peacekeeping Force, in respect of the death of the member; and

(b) that person is in receipt of, or is subsequently granted, a pension under this Part in respect of the incapacity of the member from that injury or disease or in respect of the death of that member from that injury or disease, as the case may be;

that person shall be deemed, by reason of that payment by way of compensation, to have been, or to be, in receipt of payments, by way of compensation, on and after:

(c) the date of commencement of the period in respect of which his or her pension is, or becomes, payable; or

(d) the date on which the lump sum payment is made;

whichever is the earlier date, for the life of the person, at such rate per fortnight as is determined by, or in accordance with the instructions of, the Commonwealth Actuary, to be the equivalent of a lump sum equal to that lump sum payment and paid to the person on that earlier date.

1. With effect from 15 September 2011, the VEA was amended by the Veterans' Entitlements Amendment Act 2011 (Cth) (2011 Amendments). Following the 2011 Amendments, ss 74(2) and (3) provide:

(2) This section applies in relation to a member of the Forces, or a member of a Peacekeeping Force, in respect of the death of the member, or the incapacity of the member if:

(a) a person is entitled, or 2 or more persons are each entitled, to receive payments by way of compensation in respect of the death of the member or of the incapacity of the member from an injury or disease; and

(b) subject to this section, pension under this Part is being paid or is payable to a person, or to each of 2 or more persons, in respect of the death of the member or to the member in respect of the same incapacity of the member from that or any other injury or disease.

(3) For the purposes of this section, where:

(a) a lump sum payment by way of compensation (other than a lump sum payment mentioned in paragraph (3A)(a) or (3B)(a)) is made:

(i) to a person, being a member of the Forces or a member of a Peacekeeping Force, in respect of the incapacity of the member from injury or disease; or

(ii) to a person, being a dependant of a member of the Forces or of a member of a Peacekeeping Force, in respect of the death of the member; and

(b) that person is in receipt of, or is subsequently granted, a pension under this Part in respect of the same incapacity of the member from that or any other injury or disease or in respect of the death of that member, as the case may be;

that person shall be deemed, by reason of that payment by way of compensation, to have been, or to be, in receipt of payments, by way of compensation, on and after:

(c) the date of commencement of the period in respect of which his or her pension is, or becomes, payable; or

(d) the date on which the lump sum payment is made;

whichever is the earlier date, for the life of the person, at such rate per fortnight as is determined by, or in accordance with the instructions of, the Commonwealth Actuary, to be the equivalent of a lump sum equal to that lump sum payment and paid to the person on that earlier date.

(Emphasis added.)

1. Mr Burns contended that, in offsetting his lump sum compensation payment in respect of his injury on 1 February 1991 (which was determined to be an aggravation of his pre-existing degenerative disease) from his Pension for disc degeneration, the Minister erred in his interpretation of s 30C - for which I read s 74. Mr Burns submitted that, for an "incapacity" to exist, there must first be an "injury" from which the incapacity arises. Mr Burns argues that as the "aggravation" of an injury is excluded from the definition of "injury" in the VEA, the aggravation of his Degenerative Disc Disease cannot be an "injury" and so cannot be used for the purpose of offsetting his Pension. He points to s 5D in support of his construction of s 74.
2. Section 5D of the VEA was unaffected by the 2011 Amendments. It provides:

(1) In this Act, unless the contrary intention appears:

...

disease means:

(a) any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development); or

(b) the recurrence of such an ailment, disorder, defect or morbid condition;

but does not include:

(c) the aggravation of such an ailment, disorder, defect or morbid condition; or

...

injury means any physical or mental injury (including the recurrence of a physical or mental injury) but does not include:

(a) a disease; or

(b) the aggravation of a physical or mental injury.

War-caused injury; war-caused disease; defence-caused injury; defence-caused disease

(2) In this Act, unless the contrary intention appears:

(a) a reference to the incapacity of a veteran from a war-caused injury or a war-caused disease; or

(b) a reference to the incapacity of a person who is a member of the Forces, or a member of a Peacekeeping Force (as defined by subsection 68(1)), from a defence-caused injury or a defence-caused disease;

is a reference to the effects of that injury or disease and not a reference to the injury or disease itself.

...

1. With respect, the conclusion for which Mr Burns contends cannot be reached on a proper construction of the VEA. True it is that, for the purposes of the provisions for assessing an entitlement to a pension under the VEA, it is the definition of "injury" in s 5D of the VEA that is relevant. However, for the purposes of s 74, the relevant focus is the incapacity for which the veteran has received compensation and a pension. In this respect, it is clear that, to the extent a literal interpretation of s 5D might lead to Mr Burns' preferred construction, a "contrary intention" is made plain in s 74.
2. Applying s 74 to Mr Burns' circumstances, he is "a person ... entitled ... to receive payments by way of compensation in respect of ... [his] incapacity ... from an injury or disease" (s 74(2)(a)) - being the injury he sustained on 1 February 1991, which was described as an "aggravation of Pre-existing Degenerative Disc Disease". Section 74(2)(b) then directs attention to whether a "pension under this Part is being paid ... to the member in respect of the same incapacity of the member from that or any other injury or disease".
3. Mr Burns' Disc Degeneration, which "was first noticed in late January 1991 after performing physical training in the Army", was accepted as the reason for his Pension payable at 50% of the General Rate with effect from 19 April 1994, and was acknowledged by letter from the Department dated 13 September 1994. By letter from Comcare dated 10 January 1995, the aggravation of the pre-existing Degenerative Disc Disease, which Mr Burns claimed to have suffered on 1 February 1991, was accepted as rendering him totally incapacitated for employment. He was granted weekly payments under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRCA) by way of compensation, pending rehabilitation and review in 12 months' time. By letter from the Department dated 28 February 1995, Mr Burns was informed that it was not possible to receive payments from both the Departments of Defence and Veterans' Affairs for the same condition. Mr Burns was notified that his disability pension would therefore be limited. On 5 October 1995, Mr Burns was notified by Comcare of his lump sum award under the SRCA in respect of his "permanent impairment for your Back condition". He was also informed that, having regard to s 115 of the VEA, he had been overpaid his pension by a certain sum. As has already been referred to above, Mr Burns subsequently received increases to his rate of Pension under the VEA, on 4 March 1996 and 2 October 1996 respectively, in each case because he was incapacitated to the extent of being unable to work more than 8 hours per week. Under the VEA, he was therefore assessed as being totally and permanently incapacitated: s 24(1)(b).
4. Mr Burns' incapacity is therefore "the same" and arises from the same condition - his Degenerative Disc Disease. As was said by Logan J in McDermid v Repatriation Commission [2016] FCA 372; 150 ALD 55 at [61] (on which aspect of the decision there was no appeal):

If the incapacity is the "same", it matters not that the compensable injury which has yielded that incapacity is but one of the injuries or diseases accepted for the purposes of the VEA or even quite different from the injury or disease accepted under the VEA which have yielded that same incapacity - "that or any other injury or disease".

1. In other words, even if an "aggravation" of an injury or disease is excluded for the purposes of the assessment of pension under the VEA, that does not matter when considering the issues being determined under s 74, being whether there is "double-dipping". So much was made plain by the Explanatory Memorandum to the Veterans' Entitlements Amendment Bill 2011 (Cth) in which it was said, at ii:

The amendments will make it clear that the compensation offsetting provisions are to apply where compensation from another source (a source other than the Veterans' Entitlements Act) and pension under Part II or IV of the Veterans' Entitlements Act are payable in respect of the same incapacity and do not require that the incapacity results from the same injury or disease.

1. As was submitted by the Minister, Mr Burns' position was no different prior to the 2011 Amendments. In Repatriation Commission v McDermid [2016] FCAFC 179; 248 FCR 528, which overturned Logan J's construction of s 74 pre the 2011 Amendments, the Full Court held, at [21], that even prior to those amendments, the focus of the VEA was "upon the necessity to make a claim for a particular incapacity and for a decision to be made in respect to that incapacity." The Court continued, at [22]:

Any contrary construction of s 74(2)(b), as it then stood, requires the statutory phrase "that injury" to be construed as meaning (for example) "that injury alone" or "that injury to the exclusion of other injuries" for which a pension may also be payable. ... Given the "architecture" of the Veterans' Entitlements Act, there is no clear need to either "read words into" s 74(2), or to construe s 74(2) other than in the manner that the natural and ordinary meaning of those words convey. Indeed, the contrary construction of the primary Judge ... would only be to endorse "double dipping" - with Mr McDermid receiving the entirety of the compensation payable under the Compensation Act and the pension payable under the Veterans' Entitlements Act free of any reduction in quantum.

1. The same consequence would flow were Mr Burns' submissions to be accepted.
2. For these reasons, the Minister has not misapplied or misinterpreted s 30C (or s 74) of the VEA such as to give rise to jurisdictional error in making the Decision.

1. Mr Burns' application for judicial review of the Decision of 13 March 2025 must be dismissed. There is no reason to disturb the usual order as to costs. It is appropriate that Mr Burns pay the Minister's costs.

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Sarah C Derrington.