Giesen v Repatriation Commission

Federal Court of Australia|2005-06-24|Before: Gray J

The nature and history of the proceeding 1 This appeal from a decision of the Administrative Appeals Tribunal ('the Tribunal') raises questions of the correctness of the Tribunal's approach to a claim by the applicant for pension at the special rate, pursuant to s 24 of the Veterans' Entitlements Act 1986 (Cth) ('the VE Act'). By s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act'), the appeal is limited to questions of law. 2 The applicant was born on 8 June 1941. His military service, in the Australian Army, was from 12 December 1966 to 21 July 1970. It included operational service in Vietnam from 24 October 1967 until 24 November 1967. 3 As a consequence of the acceptance by the respondent, the Repatriation Commission ('the Commission'), that the applicant suffers from a number of war-caused disabilities, he has been in receipt of a pension pursuant to the VE Act for some time. His disabilities accepted by the Commission as war-caused are generalised anxiety disorder, psychoactive substance abuse or dependence, chronic solar skin damage, colorectal adenomatous polyp, gastro-oesophageal reflux disease, hypertension, irritable bowel syndrome, impotence, neurodermatitis and cerebral ischaemia. The applicant has also claimed, but the Commission has not accepted, that he also suffers from the following war-caused disabilities: mitral stenosis, lumbar-sacral spondylosis, rheumatic heart disease, atrial fibrillation, benign prostatic hypertrophy, left ventricular dysfunction, chronic airflow limitation, obesity and post-traumatic stress disorder ('PTSD'). 4 On 1 March 2002, the applicant applied to the Commission for pension on the basis of PTSD, and for an increase in pension on the basis of a worsening of his accepted disabilities. On 2 April 2002, the Commission made a decision, rejecting both claims. The effect of this was that the applicant's pension continued to be paid at 100 per cent of the general rate. The applicant applied to the Veterans' Review Board for review of the decision. On 30 October 2002, the Veterans' Review Board made a decision, affirming the decision of the Commission. 5 The applicant then applied to the Tribunal for review on the merits of that decision. On 17 March 2004, the Tribunal published its written decision and reasons for decision. The Tribunal affirmed the decision under review. This appeal is brought from the decision of the Tribunal.

The legislation 6 Section 13(1) of the VE Act provides relevantly as follows: 'Where: ... (b) a veteran has become incapacitated from a war-caused injury or a war-caused disease;

the Commonwealth is, subject to this Act, liable to pay: ... (d) in the case of the incapacity of the veteran―pension by way of compensation to the veteran; in accordance with this Act.' 7 Section 14 makes provision for claims for pension and s 15 makes provision for applications for increase in pension. Section 19 provides for the manner in which the Commission is required to determine claims and applications. One of the functions of the Commission is to determine the rate at which pension is payable. Sections 22, 23 and 24 make provision respectively for the general rate, the intermediate rate and the special rate of pension. The focus in the present case was on the special rate. The relevant provisions of s 24 are: '(1) This section applies to a veteran if: (aa) the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and (aab) the veteran had not yet turned 65 when the claim or application was made; and (a) either: (i) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or

... (b) the veteran is totally and permanently incapacitated, that is to say, the veteran's incapacity from war-caused injury or war- caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and

(c) the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and ... (2) For the purpose of paragraph (1)(c): (a) a veteran who is incapacitated from war-caused injury or war- caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if: (i) the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or

(ii) the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; and (b) where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.' 8 Section 119(1) of the VE Act, so far as relevant to the arguments advanced in the present case, provides: 'In considering, hearing or determining, and in making a decision in relation to: (a) a claim or application; … the Commission: (f) is not bound to act in a formal manner and is not bound by any rules of evidence, but may inform itself on any matter in such manner as it thinks just; (g) shall act according to substantial justice and the substantial merits of the case, without regard to legal form and technicalities; and (h) without limiting the generality of the foregoing, shall take into account any difficulties that, for any reason, lie in the way of ascertaining the existence of any fact, matter, cause or circumstance, including any reason attributable to: (i) the effects of the passage of time, including the effect of the passage of time on the availability of witnesses; and (ii) the absence of, or a deficiency in, relevant official records, including an absence or deficiency resulting from the fact that an occurrence that happened during the service of a veteran, or a member of the Defence Force or of a Peacekeeping Force, as defined by subsection 68(1), was not reported to the appropriate authorities.' 9 Section 120 of the VE Act deals with the standard of proof. The provisions relevant to this case are subs (4), which requires the Commission to 'decide the matter to its reasonable satisfaction', and subs (6), which provides: 'Nothing in the provisions of this section, or in any other provision of this Act, shall be taken to impose on: (a) a claimant or applicant for a pension or increased pension, or for an allowance or other benefit, under this Act; or (b) the Commonwealth, the Department or any other person in relation to such a claim or application; any onus of proving any matter that is, or might be, relevant to the determination of the claim or application.'

The issues before the Tribunal 10 At the outset of the hearing before the Tribunal, counsel for the applicant informed the Tribunal that the parties had agreed that the applicant met the requirements of s 24(1)(b) of the VE Act. (In fact, as was agreed by counsel for the respective parties who appeared before me, the Commission had also accepted that the applicant met the criterion in s 24(1)(a)(i)). Before the Tribunal, counsel for the applicant also effectively abandoned the claim for acceptance of PTSD, on the basis that the Commission accepted that the applicant suffered from generalised anxiety disorder and psychoactive substance abuse or dependence, so that he did not need to have PTSD accepted. Counsel for the applicant stated the issue before the Tribunal in terms of the requirements of s 24(1)(c) and what he described as 'the ameliorating effect' of s 24(2)(b). 11 Before the Tribunal, the applicant's case was that, after leaving the army, he returned to his trade as a boilermaker/welder. He stopped working in 1980 because of his heart condition. In 1996, he obtained part-time work with Cobral Metals Pty Ltd. In 1999, he was forced to leave after continuing problems with binge drinking. He then worked five hours per week with the Corps of Commissionaires, but ceased because gastro-oesophageal reflux problems kept him awake at night and he was unable to cope with the work. He returned to Cobral Metals from 2000 to 2001, working 10 hours per week until April or May 2001. He had not worked since. 12 The applicant claimed that his gastro-oesophageal reflux disease, alcohol dependency, generalised anxiety disorder and irritable bowel syndrome prevented him from working more than eight hours per week. He suffered a stroke that affected his memory and could not return to his trade. He became very tired and had no strength in his left hand. The applicant denied that it was his heart condition that prevented him from working. He was unable to continue work at Cobral Metals because of exhaustion, due to insufficient sleep as a consequence of the reflux condition. The applicant claimed that he could cope with neck, heart, back, knee and shoulder pain for a few hours at a time, but the remaining conditions prevented him from working. 13 The Tribunal had before it a range of medical evidence about the various conditions from which the applicant suffered and their effect on his capacity to work.

The Tribunal's reasons 14 In its reasons for decision, the Tribunal summarised the evidence, including the medical evidence, set out the relevant provisions of s 24 of the VE Act, and summarised the submissions made on behalf of the parties. The Tribunal's reasoning was expressed quite briefly as follows: 'The Tribunal accepts that the applicant was highly motivated to work. Although Dr Hofland concluded that the applicant's inability to work part-time was due to accepted disabilities, the Tribunal notes that in cross-examination she acknowledged that his heart problems contributed to his pain. The Tribunal also agrees with Dr Strauss that the applicant's history has to be taken into account in total, and that the applicant has a number of war-caused and non-war-caused disabilities, all of which have contributed to his incapacity. Dr Strauss' estimate that psychiatric incapacity contributed about 20 per cent of incapacity for work is generally consistent with the estimate by Dr Vohra that the applicant's heart condition, obesity and lung disease contributed 70 per cent towards his functional incapacity. Dr Vohra's evidence was supported by Dr Horsley in her evidence that the applicant's non-accepted incapacities and physical disabilities have had a significant impact on his ability to work. The Tribunal accepts that the applicant's physical problems, including non-accepted disabilities, may have aggravated his psychiatric problems. However, the clear weight of medical evidence is that the applicant's non-accepted conditions, together with the accepted conditions, have played a major role in preventing the applicant from working more than eight hours per week. It follows that the Tribunal does not accept the evidence of the applicant, and the submission from Mr De Marchi, that it was the veteran's mental state, notwithstanding his physical problems, that prevented him from being able to obtain remunerative work.' 15 The Tribunal then made a finding that the war-caused disabilities were not the substantial cause of the applicant's inability to obtain remunerative work, as required in s 24(2)(b) of the VE Act. It expressed the view that the applicant could not satisfy s 24(2)(b) and s 24(1)(c), and therefore the application must fail.

The applicant's case 16 From the applicant's notice of appeal, and the submissions, both written and oral, made on his behalf, it is possible to distil the following arguments relating to questions of law: · The Tribunal's finding that the applicant's non-accepted conditions, together with the accepted conditions, played a major role in preventing him from working more than eight hours per week did not address the correct question, which was whether the accepted conditions substantially prevented the applicant from working. · The Tribunal should have differentiated between the effect of non-accepted conditions and the effect of accepted conditions. · The correct issues were: whether, if the applicant suffered only from his accepted conditions, he would be unable to work more than eight hours per week; whether he ceased working as a result of his accepted conditions; and whether his accepted disabilities were the substantial cause of his inability to engage in remunerative work. · The Tribunal did not deal with s 24(1)(c) of the VE Act, before proceeding to deal with s 24(2)(b). · The Tribunal made no finding that the applicant had been genuinely seeking to engage in remunerative work, or as to the substantial cause of his inability to obtain it, and therefore did not apply s 24(2)(b). · The Tribunal neglected to apply the provisions of s 119 of the VE Act. · Contrary to s 120(6) of the VE Act, the Tribunal imposed on the applicant an onus of establishing that he met the requirements of s 24(1)(c) and s 24(2)(b). · Contrary to s 120(4) of the VE Act, the Tribunal did not apply the balance of probabilities standard of proof in making its findings. · The Tribunal failed to give adequate reasons for its conclusion.

17 Also in the submissions made on behalf of the applicant were a number of arguments that could only be described as directed to the factual merits of the case. Thus, counsel for the applicant criticised the Tribunal for linking Dr Hofland's conclusion that the applicant's heart problems contributed to his pain with the applicant's inability to work, contending that the applicant had given evidence that he had worked with pain on many occasions. Counsel for the applicant also criticised the Tribunal's treatment of the evidence of Dr Strauss, contending that the Tribunal overlooked some of that evidence. He also accused the Tribunal of having disregarded large amounts of evidence from the applicant. He contended that the Tribunal should not have considered each medical report individually, but should have considered the applicant's physical and mental conditions in relation to each other. The submissions even went so far as to invite the Court to make its own finding that the applicant satisfied the requirements of s 24(1)(c), by virtue of meeting the requirements of s 24(2). In the light of the fact that s 44(1) of the AAT Act restricts an appeal of this kind to an appeal on a question of law, the Court cannot deal with submissions attacking the Tribunal's findings of fact. 18 Among the submissions put were also submissions concerning the Tribunal's failure to make findings in relation to s 24(1)(a)(i) and (b) of the VE Act. In the course of the hearing of the appeal, counsel for the applicant conceded that it had been common ground at the Tribunal that the applicant satisfied both of those provisions, so that it was unnecessary for the Tribunal to deal with them.

The applicability of s 24(2)(b) 19 In the course of the hearing of the appeal, I expressed doubt as to whether the Tribunal ought to have had regard to s 24(2)(b) of the VE Act at all. It seemed to me that this was a case in which the applicant had been undertaking remunerative work. It therefore appeared to me that the correct question was whether, for the purposes of s 24(1)(c), it was his accepted war-caused conditions alone that prevented him from continuing to undertake that work. It seemed to me that s 24(2)(b) was designed to deal with a different case, namely the case of a veteran who had not attained the age of 65 and had not been engaged in remunerative work at all. In such a case, the veteran could take the benefit of a more lenient test, by showing that, but for the war-caused incapacity, he or she would be continuing to seek to engage in remunerative work, and that the incapacity was the substantial cause of the inability to obtain remunerative work. 20 Neither counsel was prepared to make submissions about this issue. As a consequence, I gave leave to both counsel to file written submissions on that issue after the conclusion of oral argument. Counsel for the Commission filed such submissions. They were to the effect that the more generous test in s 24(2)(b) was available to the applicant in the circumstances of this case. Counsel for the applicant did not file written submissions, being content to adopt the position for which the Commission advocated. 21 As the written submissions on behalf of the Commission revealed, the view has been expressed in a number of authorities that s 24(2)(b) of the VE Act is an ameliorating provision, of which a veteran who has ceased to engage in remunerative work may avail himself or herself, if he or she can show that war-caused incapacity is the substantial cause of inability to obtain remunerative work, which the veteran has been genuinely seeking. See: Magill v Repatriation Commission [2002] FCA 744 at [8]; Forbes v Repatriation Commission [2000] FCA 328 (2000) 101 FCR 50 at [40]; Rendell v Repatriation Commission [2001] FCA 1881 at [37]; and Peacock v Repatriation Commission [2004] FCA 1449 at [20]. In addition, it could be said that the assumption that s 24(2)(b) is available to a veteran who has previously engaged in remunerative work appears to underlie the judgment of the Full Court in Leane v Repatriation Commission [2004] FCAFC 83. 22 The contrary proposition has also been expressed. In Hendy v Repatriation Commission [2002] FCA 602 (2002) 72 ALD 112 at [55], Madgwick J described s 24(2)(b) as a safety net provision dealing with veterans who, following their military service, have been unable to get back into the workforce, thus making s 24(1)(c) inapplicable. 23 For a number of reasons, I take the view that s 24(2)(b) of the VE Act provides a substitute test for the 'alone' test in s 24(1)(c), and that the substitute test is available only to veterans who have not engaged in remunerative work at any relevant time. The 'alone' test is a very strict test. It focuses on the last remunerative work that a veteran was undertaking, and on the cause or causes preventing the veteran from continuing to undertake that remunerative work. The sole cause of the veteran's inability to continue to undertake that remunerative work must be the war-caused incapacity. That is to say, the war-caused incapacity must have been sufficient, by itself, to prevent the veteran from continuing that remunerative work. It is difficult to imagine that the legislature intended that a veteran should be able to avoid the application of this strict test, and to take the benefit of the much more liberal 'substantial cause' test in s 24(2)(b), simply by satisfying the decision-maker that he or she had been genuinely seeking to engage in remunerative work and would be continuing so to seek it. 24 The words 'who has not been engaged in remunerative work' have been inserted quite deliberately. They must have been intended to form an element of the conditions under which the 'substantial cause' test is to operate. They are particularly apt to make that test applicable to the case of a veteran who has not engaged in remunerative work at all, and who therefore could not satisfy the 'alone' test. Were it not for the inclusion of s 24(2)(b), such a person could not satisfy s 24(1)(c). Never having engaged in remunerative work, such a person could never have adduced evidence that he or she was prevented by war-caused incapacity from continuing to undertake it. The opening words of s 24(2) indicate clearly that both of the paragraphs in that subsection are to be used in the application of the 'alone' test in s 24(1)(c). The concluding words of s 24(2)(b) are apt to make it clear that the test is a substitute one; a veteran who satisfies it 'shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.' The effect of the paragraph is that a veteran to whom the 'alone' test is inapplicable, because there never was 'remunerative work that the veteran was undertaking' is deemed to have been prevented from continuing to undertake remunerative work that he or she was undertaking, if the veteran satisfies the 'substantial cause' test. 25 In general, the likelihood is that a veteran who has never engaged in remunerative work has been more severely incapacitated than a veteran who has so engaged. The more severely incapacitated veterans are more deserving of the more lenient 'substantial cause' test than the veterans who have engaged in remunerative work, to whom the stricter 'alone' test applies. 26 If I were to adopt my view, it would follow that the Tribunal in the present case had not considered the application of the correct test. In the course of its reasons, the Tribunal made no attempt to determine whether the applicant was prevented by his war-caused incapacity from continuing to undertake remunerative work that he was undertaking. The question would arise whether I should set aside the decision of the Tribunal and return the matter to the Tribunal to be determined on the proper test. The answer to that question might depend upon whether I should take the view that, having failed the more lenient test, the applicant would necessarily have failed the stricter one. The difficulty is that the tests are to be applied, in effect, at two different dates. The fact that the veteran might have failed the 'substantial cause' test at a later date does not necessarily mean that he must have failed the 'alone' test, when applied to his earlier cessation of remunerative work. 27 I am prepared not to apply my own view, however, because of the unanimity of the parties that it is not the correct view. In the light of the submissions that have been made, for the purposes of this proceeding, I should accept the concession of the Commission that it was open to the applicant to take the benefit of the more lenient test in s 24(2)(b) if the Tribunal had determined that his circumstances met that test. Purely because of this concession, I propose to confine my examination of the grounds of appeal to those put forward on behalf of the applicant, on the assumption that it was open to the Tribunal to apply the test in s 24(2)(b) of the VE Act.

The Tribunal's approach 28 The Tribunal's acceptance of Dr Hofland's conclusion that the applicant's heart problems contributed to his pain was clearly a relevant factor in its decision. Even though the applicant may have given evidence that he had worked despite pain, it was not an irrelevant consideration for the Tribunal to take into account his pain, and the causes of it, when considering the causes of his inability to obtain remunerative work. 29 The Tribunal understood perfectly well what its task was in applying s 24(2)(b). It asked itself the correct question, and answered it, when it found that the clear weight of medical evidence was that the applicant's non-accepted conditions, together with the accepted conditions, played a major role in preventing him from working more than eight hours per week. The Tribunal specifically rejected the submission that it was the applicant's mental state that prevented him from being able to obtain remunerative work. It specifically found that the war-caused disabilities were not the substantial cause of the applicant's inability to obtain remunerative work. The Tribunal did differentiate between the effect of non-accepted conditions and accepted conditions. 30 There is no indication in the Tribunal's reasons that it considered the various items of medical evidence in isolation from each other. Indeed, it is plain that the Tribunal was concerned to reconcile the conflicting medical evidence, so far as it was able to do so. 31 The Tribunal did not ignore s 119 of the VE Act. It specifically said that it took into account the provisions of that section. In the light of its specific reference to s 119, it cannot be assumed that the Tribunal then set its face against applying them, and did not act according to substantial justice and the substantial merits of the case, or did not take into account any difficulties lying in the way of ascertaining the existence of any fact, matter, cause or circumstance. These were its obligations pursuant to s 119(1)(g) and (h). Indeed, no issue arose of difficulty in ascertaining the existence of any fact, matter, cause or circumstance. 32 Nor did the Tribunal require that the applicant satisfy any onus of proof, contrary to s 120(6) of the VE Act, or apply a standard other than 'reasonable satisfaction', which equates to the balance of probabilities (see Smith v Repatriation Commission (1987) 74 ALR 537), contrary to s 120(4). For the Tribunal to state that it did not accept the applicant's evidence in one respect was not for it to impose an onus of proof, or apply a wrong standard. 33 Although the Tribunal's reasons, so far as they set out its process of reasoning, are very brief, they are not so brief as to cause the Tribunal to have failed to comply with its statutory obligation to set out its reasons. It is true that the Tribunal did not make a specific finding, in terms of s 24(2)(b) of the VE Act, that the applicant had been genuinely seeking to engage in remunerative work, or that he would be continuing so to seek. The nearest the Tribunal got was its finding that the applicant was highly motivated to work. Rather, the Tribunal appears to have assumed these elements, and to have gone directly to the application of the 'substantial cause' test to the question of the inability of the applicant to obtain remunerative work. Although it might have been an error on the part of the Tribunal to fail to make the findings on the issues that are antecedent to the application of this test, the error operated in favour of the applicant, and would not be a reason for setting aside the Tribunal's decision. The Tribunal's reasons show its reasoning on the application of the 'substantial cause' test.

Conclusion 34 For these reasons, the appeal must fail. It must be dismissed. No reason was advanced, and none appears, for not applying the usual rule, that costs follow the event. Accordingly, it should be ordered that the applicant pay the Commission's costs of the appeal. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

Solicitor for the applicant: De Marchi & Associates

Solicitor for the respondent: Australian Government Solicitor

Veterans' Entitlements Act 1986(Cth)ss 24(1)(c), 24(2)(b), 13(1), 14, 15, 19, 22, 23, 119, 120

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