Grundman v Repatriation Commission

Federal Court of Australia|2001-07-12|Before: Gray J

REASONS FOR JUDGMENT 1 This appeal from the Administrative Appeals Tribunal ("the AAT") is in respect of a decision of the AAT made on 24 July 2000, affirming two decisions of the Veterans' Review Board ("the VRB"). By s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"), the appeal is limited to a question of law. The facts to which I refer in these reasons for judgment are therefore those found by the AAT. 2 Some matters of fact were common ground as between the parties in the AAT. Matthew John Grundman was born on 10 January 1920. He served in the Royal Australian Air Force from 15 October 1942 to 25 April 1945. He served in Australia and the South-West Pacific area, and thereby rendered eligible service, including operational service, as defined in the Veterans' Entitlements Act 1986 (Cth) ("the VE Act"). He was a veteran within the meaning of s 5C of the VE Act. He died on 9 January 1999. 3 At the time of his death, Mr Grundman had two applications for review pending in the AAT. The applications were continued by his widow, who is the applicant in this Court. 4 On 20 July 1993, Mr Grundman was receiving a pension pursuant to the VE Act at 50 per cent of the general rate specified for the purposes of the VE Act. On that date, he made a claim for an increase in pension. On 29 July 1993, he made a further claim for entitlement to medical treatment and pension in respect of incapacity from carcinoma of the prostate. On 9 November 1993, a delegate of the respondent, the Repatriation Commission, determined that Mr Grundman's level of pension should remain at 50 per cent of the general rate. In a separate determination, the delegate determined that carcinoma of the prostate was not war-caused. 5 Mr Grundman made application to the VRB for review of both determinations. On 6 July 1994, the VRB affirmed both determinations. In doing so, the VRB concluded that no reasonable hypothesis existed connecting Mr Grundman's carcinoma of the prostate with his war service. In the course of his application for an increase in pension, Mr Grundman claimed an entitlement to a certain number of impairment points under the Guide to the Assessment of Rates of Veterans' Pensions ("the Guide") in respect of a bilateral orchidectomy. His claim was on the basis that the orchidectomy was performed because his irritable colon (an accepted war-caused disease) restricted the possibility of ray treatment of the cancer of the prostate. The VRB took the view that the application for an increase should be treated as an informal claim for acceptance of bilateral orchidectomy as a war-caused condition on the basis that it was a sequela to the irritable colon. It said that the question of assessment under the Guide would need to be addressed by a delegate of the Repatriation Commission. From its examination of Mr Grundman's then accepted disabilities (irritable colon with sigmoid polyp and renal calculus), the VRB determined that it was reasonably satisfied that a degree of incapacity of 50 per cent had been the appropriate assessment for the purposes of payment of pension at the general rate. Accordingly, the VRB affirmed the decision under review. 6 On 2 September 1994, Mr Grundman applied to the AAT for review of the VRB decisions in respect of the claim and the application for an increase. This application became designated as matter V1994/787 in the AAT. 7 Prior to the determination by the AAT of matter V1994/787, Mr Grundman made a further claim to have a disability he described as a "nervous problem" (which was diagnosed as chronic anxiety) accepted as war-caused. This claim was made on 4 October 1994. On the same day, Mr Grundman made another application for an increase in pension. 8 On 16 February 1995, a delegate of the respondent determined that Mr Grundman suffered from post traumatic stress disorder and that this disability was war-caused. This delegate assessed Mr Grundman at 60 per cent for the purposes of payment of pension at the general rate. On 7 March 1995, Mr Grundman applied to the VRB for review of the assessment of 60 per cent. On 11 October 1995, the VRB set aside the decision and increased the assessment to 70 per cent. On 9 February 1996, Mr Grundman applied to the AAT for review of that decision of the VRB. This application became matter V1996/157 in the AAT. 9 On 21 June 1996, in matter V1994/787, the AAT determined Mr Grundman's bilateral orchidectomy to be war-caused and remitted the issue of assessment to the Repatriation Commission. The AAT also reserved liberty to apply in relation to his application for an increase in pension in that matter until matter V1996/157 was to be heard. 10 On 26 March 1997, a delegate of the Repatriation Commission determined that Mr Grundman's pension should continue at 50 per cent of the general rate from 29 April 1993 to 3 July 1994 but that it should be increased to 80 per cent with effect from 4 July 1994. The former assessment took into account the bilateral orchidectomy as a war-caused condition. The increase was the result of the acceptance of post traumatic stress disorder as war-caused, and a determination that the increase taking into account that condition should be back-dated to 4 July 1994. 11 In making the decision from which the applicant now appeals, the AAT regarded both matter V1994/787 and matter V1996/157 as before it. It took the view that there were two assessment periods. The first, relevant to matter V1994/787, was from 29 April 1993 until 3 July 1994. In respect of that assessment period, Mr Grundman's accepted war-caused disabilities were irritable colon with sigmoid polyp and renal calculus, and bilateral orchidectomy. The assessment period for application V1996/157 was from 4 July 1994 to the date of determination by the AAT. In respect of that period, Mr Grundman was entitled to be assessed for the same disabilities together with post traumatic stress disorder. 12 Section 14 of the VE Act provides that a veteran, or a dependent of a deceased veteran, may make a claim for a pension. Section 15 provides that a veteran who is in receipt of a pension may apply for an increase in the rate of the pension. Section 19 contains provisions as to how claims for pensions, or for increases in pensions, are to be dealt with by the Repatriation Commission. These include: "(3) The Commission shall determine a claim for a pension as follows: (a) first, the Commission shall determine whether the claimant is entitled to be granted a pension in respect of: (i) the incapacity of a veteran from war-caused injury or war-caused disease, or both; or (ii) the death of a veteran that was war-caused;

(b) then, if the Commission determines that the claimant is so entitled, the Commission shall proceed as set out in subsection (5). (4) The Commission shall determine an application for a pension at an increased rate in accordance with subsection (5). (5) Where paragraph (3)(b) applies in respect of a claim or subsection (4) applies in respect of an application, the Commission shall assess, in accordance with whichever of sections 22, 23, 24, 25, 27 and 30 are applicable: (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 from the date of the determination;

and shall make a determination approving the payment of pension in accordance with that assessment." For the purposes of the section, subs (9) defines "assessment period" as being the period starting on the day when the claim or application was received and ending when the claim or application is determined. 13 By s 43(1) of the AAT Act, the AAT may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made a decision under review by the AAT. The AAT was therefore required to exercise the function of the Repatriation Commission pursuant to s 19(3), (4) and (5) of the VE Act. In particular, the AAT was required to assess, in accordance with such of the succeeding sections as were relevant, the rate or rates at which the pension would have been payable from time to time during the assessment period. 14 By s 21A of the VE Act, the Repatriation Commission is obliged to determine the degree of incapacity of a veteran from war-caused injury or war-caused disease, or both, according to the provisions of the Guide. The degree of incapacity is required to be determined as 10 per cent or a multiple of 10 per cent, not exceeding 100 per cent. Section 22 provides for the general rate of pension, the rate of which is required to be the same percentage of the general rate as the percentage determined in accordance with s 21A to be the degree of incapacity. Section 22(4) provides: "Where: (a) either: (i) the degree of incapacity of a veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be 100% or has been so determined by a determination that is in force; or (ii) a veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a

pension at the maximum rate per fortnight specified in subsection (3); (b) the veteran has attained the age of 65; (c) the veteran has an impairment rating of at least 70 points and a lifestyle rating of at least 6 points, each determined in accordance with the approved Guide to the Assessment of Rates of Veterans' Pensions; and (d) the veteran is not receiving a pension at a rate provided for by section 23, 24 or 25; the rate at which pension is payable to the veteran is increased by 50% of the maximum rate set out in subsection (3)." An additional rate of pension determined under subs (4) is known as an extreme disablement adjustment. 15 Section 24 of the VE Act relates to a special rate of pension. It provides as follows: "(1) This section applies to a veteran if: (aa) the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and (aab) the veteran had not yet turned 65 when the claim or application was made; and (a) either: (i) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or (ii) the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and (b) the veteran is totally and permanently incapacitated, that is to say, the veteran's incapacity from war-caused injury or war- caused disease, or both, is of such a nature as, of itself alone,

to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and

(c) the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and (d) section 25 does not apply to the veteran. (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. (2A) This section applies to a veteran if: (a) 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 (b) the veteran had turned 65 before the claim or application was made; and

(c) paragraphs (1)(a) and (1)(b) apply to the veteran; and (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; and (h) section 25 does not apply to the veteran. (2B) For the purposes of paragraph (2A)(e), a veteran who is incapacitated from war-caused injury or war-caused disease or both, is not taken to be suffering a loss of salary or wages, or of earnings on his or her own account, because of that incapacity if: (a) 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 (b) the veteran is incapacitated, or prevented from engaging in remunerative work for some other reason. (3) This section also applies to a veteran who has been blinded in both eyes as a result of war-caused injury or war-caused disease, or both. (4) Subject to subsection (5), the rate at which pension is payable to a veteran to whom this section applies is $571.70 per fortnight. (5) If section 115D applies to a veteran, the rate at which pension is payable to the veteran is the amount specified in subsection (4) less the pension reduction amount worked out under that section." 16 I have set out the whole of this provision in its present form. It came into its present form by reason of amendments enacted by s 17 of the Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act 1994 (Cth). The effect of the amendments was to insert pars (aa), (aab) and (d) in subs (1), and subss (2A) and (2B) after subs (2). By s 2(2) of the amending Act, those amendments are taken to have commenced on 1 June 1994. By s 3, the amendments apply to claims under s 14 of the VE Act and applications for an increase in the rate of a pension under s 15 of the VE Act made on or after 1 June 1994. 17 Mr Grundman made his application to have his "nervous problem" accepted as war-caused, and his application for an increase in pension, both of which led to matter V1996/157 in the AAT, on 4 October 1994. The assessment of pension in respect of that condition in conjunction with the previously accepted war-caused disabilities was backdated to the earliest possible date, 4 July 1994. In respect of the second period of assessment, from 4 July 1994, the AAT was required to apply s 24 of the VE Act in its amended form. In respect of the first period of assessment, up to 3 July 1994, the AAT was required to apply that section as it stood prior to the amendments. In its reasons for decision, the AAT recognised this. 18 In its reasons for decision, the AAT set out at some length submissions made to it by counsel for the Repatriation Commission, Mr Ginnane: "As Mr Ginnane again correctly observed, the conditions which existed at the time of the claim on 29 July 1993 until the date of effect of the pension to be paid for PTSD, were such that Mr Grundman was unable to fulfil the requirements of section 24(1)(a) of the Act. That is to say he had not been determined to have a degree of incapacity of at least 70 per cent. It was only as a result of his claim dated 4 October 1994 that Mr Grundman's position changed such as to enable entitlement to Special Rate. However, as the claim postdated 1 June 1994, the amendments apply.

In the circumstances, the only basis upon which an assessment of the 29 July 1993 claim could be made according to the pre 1 June 1994 amendments would be if the Tribunal assessed the appropriate rate between the date of the claim, being 29 July 1993, to 3 July 1994 (the date ending before the first available postdating of the claim made on 4 October 1994, which accepted PTSD as war-caused), at more than 50 per cent and at least 70 per cent. It was Mr Ginnane's further submission that Mr Grundman could not have satisfied section 24(1)(c) of the Act in that it was not the case that it was by reason of incapacity from war-caused injury or disease, alone, which prevented him from continuing to undertake remunerative work that he was undertaking. In support of his submission Mr Ginnane stated that there is a diagnosis by Dr Cooper of general debility such that this would have reasonably interfered with Mr Grundman's capacity to work. He also asserted that the words 'continuing to undertake remunerative work that the veteran was undertaking' suggests the requirement of a contemporaneous link between the work which was being performed and its cessation, and not a 'resumption' of work last undertaken many years previously. Mr Ginnane pointed out that Mr Grundman had not been working since 1975. Thus, at the time of his claim dated 29 July 1993, Mr Grundman had not been engaged in remunerative work for a period of some 18 years. It was Mr Ginnane's further submission that the only means by which it could be argued on behalf of Mr Grundman that the legislative provisions applicable to the 4 October 1994 claim are the pre 1 June 1994 amendments, would be to urge the Tribunal to ignore the existence of separate claims and instead treat the assessment as one continuum beginning when the 1993 claim was made (29 July 1993) and ending when the Tribunal makes its determination. There is, submitted Mr Ginnane: 'No other means by which the applicant can urge upon the Tribunal the application of the current legislative criteria to the first claim. The language of the Statute creates no provisos and no existing rule of statutory interpretation commends any means of applying the previous Special Rate provisions to the October 1994 claim.' Mr Ginnane argued that such an approach would be wrong in law, the reason being that it confuses on the one hand the question of assessment and on the other hand the making of a claim or application for increase. … It was Mr Ginnane's submission that in the circumstances the claim made by Mr Grundman on 29 July 1993 cannot be assessed at the Special Rate, the reason being that the degree of incapacity was determined at less than 70 per cent. Mr Ginnane acknowledged, however, that the Tribunal might determine the portion of the General Rate of pension to be higher than 50 per cent and that the Tribunal could therefore consider the Special Rate, but in doing so it would have to apply the pre 1 June 1994 provisions of the Act. Mr Ginnane submitted that, accordingly, Special Rate could only be granted in relation to the application V1994/787."

19 The AAT then said: "We accept Mr Ginnane's submission that Special Rate could only be granted in relation to application V1994/787. However, to achieve that rate it would be necessary for the level of pension to be increased to at least 70 per cent for the period ending on 3 July 1994. Furthermore, consideration of eligibility for Special Rate would in this instance require the pre 1 June 1994 provisions of the Act and any assessment beyond 3 July 1994 must include PTSD." (The AAT used the abbreviation "PTSD" to denote post traumatic stress disorder.) 20 After setting out extracts from s 24 of the VE Act in its pre 1 June 1994 form, the AAT said: "As to application V1996/157, Mr Ginnane submitted that the Tribunal's consideration of assessment of rate of pension only arises if: (a) The Tribunal is satisfied that 80 per cent of the General Rate is insufficient; or (b) The Tribunal is satisfied that Mr Grundman should have been in receipt of pension at the 100 per cent level; and (c) The Tribunal determines that Mr Grundman was entitled to receive the EDA." (The reference to "EDA" is a reference to extreme disablement adjustment.) 21 The AAT then summarised a considerable body of evidence given to it about Mr Grundman's working life and his health over the last years of his life. It considered the evidence of the applicant, a written statement of Mr Grundman, oral and written evidence of a daughter of Mr Grundman, and the evidence of three medical practitioners. After setting out s 22(4) of the VE Act, relating to extreme disablement adjustment, the tribunal said: "FINDINGS As we have recorded, Mr Ginnane has made a number of submissions in respect of the two applications before us. Having regard for the whole of the material before us, we agree with the submissions and find accordingly. At paragraph 37 we have noted that Mr Grundman had not been working since 1975, thus at the time of his claim dated 29 July 1993, he had not been engaged in remunerative work for a period of some 18 years." 22 The AAT then set out a passage from the judgment of the Full Court of the Federal Court of Australia in Repatriation Commission v Strickland (1990) 22 ALD 10 at 17. In that passage, the Court referred to the relevance of the fact that a veteran was over sixty-five years of age in determining whether the criterion laid down in s 24(1)(c) of the VE Act was met. The AAT then referred to a previous AAT decision and said: "being over 65 is not determinative. However, given the very substantial period of time involved it could not in our view be said that Mr Grundman was, by reason of incapacity from war-caused injury or disease, or both, alone, prevented from continuing to undertake remunerative work. We should also make it clear that the application V1996/157, being a claim for entitlement made on 4 October 1994, with payment backdated to 4 July 1994, is one which falls to be determined pursuant to section 24(2A) of the Act. However, no consideration of the application of the Special Rate of pension can apply because Mr Grundman could not satisfy a mandatory criterion specified in section 24(2A)(f). That is to say he was not undertaking his last paid work after he had turned 65. Thus the only issue able to be agitated is the degree of incapacity, that is whether Mr Grundman was entitled to an assessment greater than 80 per cent of the General Rate." 23 The AAT then turned to assess the appropriate rate for the general rate. In doing so, it applied the Guide. This involved the allocation of an impairment rating to each of the disabilities suffered by Mr Grundman and accepted as war-caused. The impairment ratings were then combined, using a chart in the Guide. The assessment also required that the AAT establish a lifestyle rating, measuring the effect of those conditions on a person's lifestyle. The combined impairment ratings, when compared with a scale in the Guide, converted to a degree of incapacity of 80 per cent, using a "shaded area" in the scale. The AAT referred to the possibility that a lifestyle rating outside the shaded area may be allocated, but said: "Having regard for (sic) the material before us we find that the allocation of a lifestyle rating outside the shaded area is not merited." 24 The AAT then said: "In view of our assessment of the late Mr Grundman's degree of incapacity from war-caused disabilities and his impairment and lifestyle ratings it follows that the qualifications for payment of the EDA were not satisfied." 25 The AAT therefore affirmed the decisions under review. 26 Despite its recognition of the need to make an assessment of the rate of pension for Mr Grundman in respect of the first assessment period, from 29 April 1993 until 3 July 1994, the AAT failed to make such an assessment. In so doing, it made a clear error of law. This was conceded by counsel for the Repatriation Commission. Indeed, by letter dated 30 April 2001 to the applicant's solicitors, the Repatriation Commission made this concession. I shall refer to the terms of this letter later in these reasons for judgment. 27 Argument at the hearing of the appeal, on 3 May 2001, therefore related mainly to the question whether the AAT had made any error of law in its assessment with respect to the second period of assessment, from 4 July 1994 onwards. Counsel for the applicant contended that the AAT had misapplied ss 24, 24A, 28, 119 and 120(4) and (6) of the VE Act. I have already set out s 24 in these reasons for judgment. The reference in the applicant's written submissions to s 24A appears to have been an erroneous reference, because s 24A does not appear to have anything to do with Mr Grundman's case. It appears that whoever drafted the submission intended to refer to s 24(2A). Section 28 provides as follows: "In determining, for the purposes of paragraph 23(1)(b) or 24(1)(b), whether a veteran who is incapacitated from war-caused injury or war-caused disease, or both, is incapable of undertaking remunerative work, and in determining for the purposes of section 24A whether a veteran who is so incapacitated is capable of undertaking remunerative work, the Commission shall have regard to the following matters only: (a) the vocational, trade and professional skills, qualifications and experience of the veteran; (b) the kinds of remunerative work which a person with the skills, qualifications and experience referred to in paragraph (a) might reasonably undertake; and (c) the degree to which the physical or mental impairment of the veteran as a result of the injury or disease, or both, has reduced his or her capacity to undertake the kinds of remunerative work referred to in paragraph (b)." 28 The reference to s 119 was narrowed to an argument that the AAT had failed to apply correctly s 119(1)(g), which requires the Repatriation Commission (and therefore on a review the AAT) to act according to substantial justice and the substantial merits of the case, without regard to legal form and technicalities. Section 120 relates to the standard of proof and is complex. Particular attention was directed to subs (4), which requires the Repatriation Commission (and therefore the AAT) to decide a matter to its reasonable satisfaction. Subsection (6) provides that there is not to be imposed on any party any onus of proving any matter that is, or might be, relevant to the determination of a claim or application. Subsection (4) has been construed as requiring the civil standard of proof, namely the balance of probability: Repatriation Commission v Smith (1987) 15 FCR 327 at 335. 29 Argument was directed primarily to the manner in which the AAT dealt with the issue of whether Mr Grundman was prevented from continuing to undertake remunerative work because of his war-caused disabilities alone. Counsel for the applicant complained that the AAT, relying on Strickland, found that Mr Grundman was not so prevented purely on the basis that he was over sixty-five. He also argued that the tribunal failed to provide reasons, or adequate reasons, for its conclusion on this issue. 30 Plainly, the AAT did not decide this issue against the applicant merely because Mr Grundman was over sixty-five at the relevant time. Following Strickland, the AAT recognised correctly that attaining the age of sixty-five is relevant to the question why a person is not engaged in remunerative work, because of the widespread custom of retiring at that age and the fact that sixty-five is the age at which a male qualifies for the grant of an age pension. The AAT then expressly recognised that being over sixty-five is not determinative. It went on to express its finding, which I have quoted. 31 A failure by the AAT to give reasons, or to give reasons that adequately explain the process by which it has arrived at a decision, may amount to an error of law. See Brackenreg v Comcare Australia (1995) 56 FCR 335 at 343 - 352 and the authorities there cited. The AAT is not expected, however, to refer in detail to every aspect of a case. See Steed v Minister for Immigration & Ethnic Affairs (1981) 37 ALR 620 at 621. It is sufficient if, on a fair reading of the whole of the reasons, it is possible to ascertain why the AAT reached a particular conclusion. In the present case, the AAT summarised at length the evidence that bore upon the question whether Mr Grundman would have continued remunerative work if he had not been prevented from doing so by his war-caused disabilities. It expressly adopted the submissions made to it by counsel for the Repatriation Commission. These included the submission on the issue of prevention from continuing to undertake remunerative work, referring to Dr Cooper's diagnosis of general debility, which I have quoted above. It referred to the time that had elapsed since Mr Grundman had last worked. It referred to the fact that Mr Grundman was over sixty-five. In my view, by this process, the AAT adequately disclosed its reasons for reaching the conclusion it reached. The AAT must be taken to have rejected evidence suggesting that Mr Grundman would have continued working. Its rejection of this evidence is a question of fact. It is not open to the Court to reach a different conclusion.

32 The argument in this Court did not disclose any error on the part of the AAT in the application of s 28 of the VE Act. Nor did it raise any suggestion that the AAT had misdirected itself by imposing any onus of proof on any party, or by applying an incorrect standard of proof. Indeed, the AAT expressly recognised that the requirement in s 120(4) to decide matters to its reasonable satisfaction required it to be satisfied on the balance of probabilities, and cited Smith. 33 This leaves the argument based on s 119(1)(g). Counsel for the applicant suggested that the requirement to act according to substantial justice and the substantial merits of the case, without regard to legal form and technicalities, in some way required the AAT to take a more benevolent view of the applicant's case than it would otherwise have done. This argument has been put many times. It has been rejected just as many times. Examples are gathered in the judgment of Wilcox J in Kumar v Immigration Review Tribunal (1992) 36 FCR 544 at 554 - 556. To them might be added Repatriation Commission v Flentjar (1997) 47 ALD 67, at 72 - 73 in which Spender J cited Thanh Phat Ma v Billings (1997) 142 ALR 158 at 164, before pointing out that s 119 does not permit the tribunal to disregard the statutory criteria for the grant of a pension at the special rate. It cannot be suggested that s 119(1)(g) is intended to provide an easy route to a favourable decision for a veteran, any more than it could be suggested that the provision was intended to provide such an easy route for the Repatriation Commission. The argument should be put to rest entirely. 34 For these reasons, I am of the view that no error of law has been shown on the part of the AAT with respect to its assessment for the second assessment period, after 4 July 1994. 35 Given that the AAT did err in law in failing to make an assessment in respect of the first period, there is a question as to what order should be made. Counsel for the Repatriation Commission urged that I should make an order in the following terms:

"(a) To the extent that the Tribunal decided that, during the period from 29 April 1993 to 3 July 1994, the appropriate rate of pension payable to the late Matthew John Grundman was 50 per cent of the general rate: (i) the appeal be allowed and that part of the Tribunal's decision be set aside; and (ii) a decision be substituted that, during the period from 29 April 1993 to 3 July 1994, the appropriate rate of pension payable to the late Matthew John Grundman was 70 per cent of the general rate. (b) The appeal otherwise be dismissed." 36 In its letter dated 30 April 2001 to the applicant's solicitors, the Repatriation Commission foreshadowed an order of this nature and invited the applicant to consent to it. The justification for the order was that, given the war-caused disabilities from which Mr Grundman suffered during the first assessment period, the application of the principles in the Guide would have led to a conclusion that the appropriate rate of pension during that period was either 60 per cent or 70 per cent of the general rate. The Repatriation Commission was prepared to allow the higher rate if the applicant would dispose of the appeal by consent. Even in the absence of such consent, counsel for the Repatriation Commission urged on me that the order would be appropriate. 37 In dealing with an appeal from the AAT pursuant to s 44 of the AAT Act, this Court does not have fact-finding functions. There are circumstances in which it can be appropriate for the Court to make a substantive declaration, but only where there is really no fact-finding left for the AAT to do. See Repatriation Commission v Nation (1995) 57 FCR 25 at 35. That is not the case here. A determination that Mr Grundman was entitled to pension at 70 per cent of the general rate during the first assessment period would involve making a finding of fact, even if only as to the choice between 60 per cent and 70 per cent within the shaded area of the scale in the Guide. The Court should not undertake this function. Accordingly, the appropriate order is that, to the extent that the AAT decided that, during the period from 29 April 1993 to 3 July 1994, the appropriate rate of pension payable to Mr Grundman was 50 per cent of the general rate, the appeal be allowed and that part of the AAT's decision be set aside. The matter should be remitted to the AAT for determination of the appropriate rate of pension for Mr Grundman during the period from 29 April 1993 to 3 July 1994. Otherwise, the appeal should be dismissed. 38 The only remaining question is that of costs. In its letter of 30 April 2001 to the applicant's solicitors, the Repatriation Commission indicated that, if the applicant did not consent to the proposal that the Repatriation Commission was making for the resolution of the appeal, the Repatriation Commission would ask the Court to order that the applicant pay all costs incurred by it after 30 April 2001, including the costs of the hearing. The applicant did not consent to the orders proposed by the Repatriation Commission. This offer, and the reasonableness of the pursuit of the appeal in the light of it, are clearly relevant to the determination of the appropriate order as to costs. 39 Although the Court cannot engage in fact-finding to resolve the appeal, the Court can reach a conclusion as to whether the offer made by the letter of 30 April 2001 was an offer the applicant ought reasonably to have accepted. It was an offer that would have given the applicant arrears of pension for the first assessment period at the higher rate of the two within the shaded area of the scale in the Guide. Counsel for the applicant argued that, if it had assessed Mr Grundman's appropriate rate of pension for the first assessment period at 70 per cent of the general rate, the AAT could have gone on to consider the application of s 24 as it then stood and might have decided that Mr Grundman was entitled to pension at the special rate. It must be remembered, however, that the war-caused disabilities suffered by Mr Grundman during the first assessment period did not include post traumatic stress disorder. Even if it had concluded that Mr Grundman's pension should have been assessed at 70 per cent of the general rate for the first assessment period, it is unlikely that the AAT would have concluded that he was entitled to an extreme disability adjustment, or to pension at the special rate for that period. Although it is necessary to bear in mind that the AAT was applying the amended provisions of s 24 in respect of the second assessment period, it is legitimate to note that the AAT did not assess Mr Grundman as having been entitled to pension at the special rate in respect of that period. Nor did the AAT consider it to be appropriate to go outside the shaded area of the scale in respect of the second assessment period. In respect of that period, it was considering all of Mr Grundman's war-caused disabilities, including post traumatic stress disorder. Post traumatic stress disorder could not be considered in relation to the first assessment period. 40 Counsel for the applicant indicated that, if his client could avoid any obligation to pay costs of her proceeding in this Court, she could return to the AAT with the benefit of legal aid. She could attempt to persuade the AAT not only to accept that 70 per cent was the appropriate rate for pension, but also that Mr Grundman was entitled to pension at the special rate, or an extreme disability allowance. To take that course might involve no loss to the applicant, but it would involve a substantial expenditure of public funds, in the expense incurred by the AAT of conducting the hearing, the cost of the appearance by the Repatriation Commission and the applicant's legal aid. The applicant is entitled to take her chances in the system as far as she wishes, but not necessarily without any expense to her. Acceptance of the offer would have given certainty to all concerned and obviated the expenditure of a significant amount of public funds. In my view, the applicant ought to have accepted the offer of the Repatriation Commission and to have disposed of the appeal without the necessity for a hearing. It is therefore appropriate that she should pay the Repatriation Commission's costs incurred as a result of not accepting the offer. 41 It is not appropriate, however, to make the applicant pay all of the respondent's costs after 30 April. It was necessary for her to have a reasonable time after receipt of the letter of 30 April to take advice and to consider her position. For that reason, the applicant should be awarded her costs of the proceeding up to and including 2 May 2001. She should be required to pay the Repatriation Commission's costs of the hearing. I certify that the preceding forty-one (41) 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 19, 22, 24, 119

Budget Measures) Legislation Amendment Act 1994(Cth)s 17

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