Hendy v Repatriation Commission

A sailor with post-traumatic stress disorder 3 The applicant, who was born on 2 July 1944, enlisted in the Royal Australian Navy on 28 July 1961, soon after his 17th birthday. He rendered eligible operational service on numerous occasions in Vietnam, where he had frightening experiences, until his discharge on 27 July 1970 aged 26. After leaving the Navy the applicant drove a truck for a number of years. He then also worked as a hotel employee for a number of years including as an assistant manager, in which capacity he performed a deal of clerical work, looked after a hotel generally and was responsible for preparing staff wages. The applicant was also a cellarman in the hotel. He then had nine and a half years employment at an RSL club as a cellarman. He left the hotel industry to access his superannuation in order to pay for a house. After that, he spent some more time as a delivery truck driver, in particular eight years as a truck owner-driver "delivering liquor", before ceasing work and selling his truck in 1995. The applicant said that the main reason for this was his psychological state, although he also had trouble with his left knee. He was treated by Dr Altman, a psychiatrist, from 29 May 1995. 4 From November 1995 to July 1996, he found another job, one or two days per week at the weekends, as a truck driver delivering gardening/landscaping supplies, sand and gravel, fertilisers, cement and sleepers in a tipper truck. He said: "They had a tipper but you had to load the sleepers and all that by hand and then you'd slide them off at your jobs. It was a pretty heavy job at stages." 5 The applicant said that, in that work, his knee was "all right". He left the work, he said, on account of matters of a psychological kind: "It seemed like [Dr Altman] was suggesting it's time that I got out of the workforce because I just wasn't able to cope with it all".

The claim for a pension 6 The Act makes provision for the payment of pensions to veterans and their dependants. There are three different main rates. The respondent is required by s 21A of the Act to assess the degree of incapacity of a veteran from war-caused injury or war-caused disease, according to the provisions of an approved Guide to the Assessment of Rates of Veterans' Pensions, frequently referred to as GARP, governed by s 29. A veteran whose degree of incapacity is 10% or more is, without more, entitled to a pro rata percentage of the maximum General Rate of pension ($216.90 per fortnight as at 31 March 2000): see s 21A(3), s 22. An Intermediate Rate of pension (maximum $394.50 per fortnight, as at the said date) is payable under s 23, in broad summary, if the degree of incapacity is at least 70%; the veteran is thereby incapable of working for more than 20 hours per week and is, on that account, actually thereby suffering an earnings loss. Section 24 (set out below at [13]) governs the Special Rate of pension (maximum $571.70 per fortnight as at the said date) and, again put very broadly, the conditions are: (1) a 70% or greater degree of incapacity; (2) incapacitation thereby from working more than 8 hours per week; and (3) actually thereby suffering an earnings loss. The Special Rate of pension has often been called a TPI pension. 7 On 22 February 1996, the applicant made a claim asserting anxiety, hearing loss and asbestosis. On 16 October 1996, a delegate of the Commission accepted his claims in relation to Post Traumatic Stress Disorder ("PTSD") and Bilateral Sensorineural Hearing Loss ("BSHL") and awarded him a pension at 90% of the "General Rate" with effect from 22 November 1995. 8 In September 1997 Mr Hendy's left knee was operated on, with beneficial results. 9 On 7 July 1998, the applicant applied for an increase in his pension on the basis that his accepted conditions had worsened. On 20 August 1998, a delegate of the Commission increased the disability pension to 100% of the General Rate with effect from 6 July 1998 but determined that the applicant was not entitled to either the Intermediate Rate or the Special Rate nor the Extreme Disability Adjustment (an augmentation of the General Rate of pension for a 100% disabled veteran aged at least 65). 10 On 3 September 1998, the applicant applied for a review of the Commission's decision of 20 August 1998 by the Veterans' Review Board ("the VRB"). The applicant claimed that he was entitled to be paid the Special Rate under s 24 of the Act or at least the Intermediate Rate under s 23. The VRB refused the applicant's application and determined, on 11 February 1999, that the decision of the Commission should be set aside and that the applicant should receive only 90% of the General Rate.

11 On 31 May 1999, the applicant appealed this decision to the Tribunal seeking payment at the Special Rate. On 28 November 2000, the Tribunal affirmed the decision of the VRB and it is that decision of the Tribunal that the applicant seeks to have reviewed in this Court.

Relevant legislation 12 Section 15 of the Act provides, so far as is presently material: "(1) A veteran who is in receipt of a pension under this Part in respect of the incapacity of the veteran may apply, in accordance with subsection (3) of this section, for an increase in the rate of the pension on the ground that the incapacity of the veteran has increased since the rate of the pension was assessed or last assessed." 13 Section 24 dealing, as indicated, with the Special Rate, provides: "(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) … (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 purposes of paragraph (1)(c): … (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." 14 Section 28 provides: "In determining, for the purposes of paragraph 23(1)(b) or 24(1)(b) [they are, except for the number of hours per week, in the same terms], 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)."

The Tribunal's decision 15 The substantial factual issues debated before the Tribunal by the parties were: · whether the applicant's alcoholism was comprehended within the accepted disability of PTSD; · whether that condition was "the only cause" of his inability to undertake remunerative work (this appears to indicate some misunderstanding of ss 23(1)(b) and 24(1)(b) - see [19], [21], [34] and [35] below), and · whether the s 24(1)(c) (or s 23(1)(c)) requirements were met. 16 The Tribunal set out the criteria involved in determining a person's eligibility for the Intermediate Rate (under s 23(1)) or Special Rate (under s 24(1)). For present purposes, the issues are identical under the two sections. It will be convenient only to deal with s 24. 17 Noting that the applicant satisfied most of those criteria, the Tribunal set out the live issues which it needed to address as being: "1. Are Mr Hendy's accepted disabilities of such a nature as, of themselves alone, to render him incapable of undertaking remunerative work for at least [technically, the test should be "for more than …", but the misstatement is quite immaterial] either eight or twenty (s 23(2)(b)) hours a week? 5. Do Mr Hendy's accepted disabilities alone prevent him from continuing to undertake remunerative work that he was undertaking causing a loss of income he would otherwise be receiving?" 18 In relation to the first issue, after noting that it needed to refer to s 28 for a "statutory methodology" in addressing the issue, the Tribunal found that the applicant's relevant vocational, trade and professional skills and qualifications and experience were in clerical work, administration, labouring and driving. The Tribunal then considered what kind of work a person with such skills, qualifications and experience could perform. The Tribunal accepted the evidence of Drs Baz (an occupational physician qualified by the applicant's solicitors) and Hession (a medico-legal consultant engaged by the respondent) that the applicant would be suitable to engaging in courier work, cellarman duties and light storeman duties. 19 I interpolate that the appellant may have been unduly generously assessed under s 28: s 28 and, therefore, also s 24(1)(b) appear to be concerned with a veteran's incapacity for notional remunerative work; s 28(b) fastens on the kinds of remunerative work "a person", rather than the veteran, possessing the veteran's skills etc. "might" undertake. There may have been no warrant to take into account, as was done, Mr Hendy's possible unfitness for heavy work arising from causes other than war service, unless it arose through what might be called ordinary incidents of the aging process for a manual worker (see [38]below). I add, to avoid any misunderstanding, that a veteran who had been, for a long time, engaged on light work because of an earlier non-service related disability, for example, the common

example of degenerative back disease, would very properly be assessed, under s 24(1)(b), in relation to such reduced capacity. 20 The Tribunal found that the applicant's alcohol dependence was a clinical feature of his PTSD and, therefore, properly to be taken into account in applying the s 24(1)(b) test. 21 Still in the context of s 24(1)(b), the Tribunal next considered whether the applicant had a non-accepted disability of arthritis of the knee which incapacitated him for remunerative employment. This appears to have been mistaken. Section 24(1)(b) appears to be concerned only with the intrinsic seriousness of the claimed war-caused incapacity: the paragraph asks whether on its own that incapacity would be sufficient to incapacitate the veteran from full-time work. If it would, para (b) is satisfied and it is only under s 24(1)(c) that the question of an actual sole cause (and then of prevention from undertaking actual work, rather than notional work) arises. The Tribunal said: "The Tribunal is, however, impressed by the fact that since Mr Hendy had surgery on his knee it seems to not trouble him at all. The Tribunal is most impressed by the report of Dr Lennon, an orthopaedic surgeon, who provided a report for the [Commission]. He saw Mr Hendy on 13 October 1999 and reported: "… …He was ambulant without a limp. He did not appear to be in great distress or discomfort. Examination of the left knee revealed a full active and passive range of knee motion without discomfort. There was no evident instability, antero-posterior or collateral… Examination of the right knee revealed a full active and passive range of knee motion without discomfort…There was no evident instability. Examination of ankles, right and left, revealed no evident clinical abnormality, a full active and passive range of ankle motion without discomfort. … It would appear from the available supplied reports and from the clinical examination that the cessation of work was due to his accepted disability post traumatic stress disorder." The Tribunal considers Dr Lennon an appropriately qualified specialist who has fully argued his conclusions as regards the contribution of Mr Hendy's orthopaedic disabilities to his cessation of work. The Tribunal, on that basis,

finds that Mr Hendy's orthopaedic conditions are not a reason for his incapacity to undertake remunerative employment." (emphasis added) 22 The Tribunal concluded, in summary, in relation to the first issue it had set out to determine: "The Tribunal therefore answers the question posed as issue 1 in the affirmative and finds that Mr Hendy satisfies [s 24(1)(b)] of the Act in that his accepted disabilities alone prevent him from undertaking any remunerative work for eight or more hours a week. However, the requirements in s 24 are cumulative. It is necessary to consider the requirements in s 24(1)(c) of the Act." 23 The Tribunal then turned to the second issue it had posed for determination, the s 24(1)(c) question. In so doing, the Tribunal looked for guidance to the decision of a Full Court of this Court in Flentjar v Repatriation Commission (1997) 48 ALD 1 and in particular what Branson J there said (at 4-5) about the approach to be adopted in applying s 24(1)(c): "In my view the issues before the tribunal in this case were as follows: 1. What was the relevant 'remunerative work that the veteran was undertaking' within the meaning of s 24(1)(c) of the Act? 2. Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work? 3. If the answer to question 2 is yes, is the war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work? 4. If the answers to questions 2 and 3 are, in each case, yes, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?" 24 The Tribunal cited the judgment of the majority in Starcevich v Repatriation Commission (1987) 14 ALD 160 as authority for the proposition that s 24(1)(c) "permits the inclusion of remunerative work done by the veteran at a number of different points in his or her life". The Tribunal then reminded itself of the salutary remarks of Burchett J in Cavell v Repatriation Commission (1988) 9 AAR 534 at 539, namely that the decision-maker is: "… to make a practical decision whether the veteran's loss of remunerative work is attributable to his service-related incapacities, and not to something else as well. It is a distinction which should not be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide." Purporting to adopt the approach in Cavell, the Tribunal concluded that it "should consider [the applicant's] position under s 24(1)(c) by reference to his former work in hotel administration and management and in truck driving and goods delivery". In discussing the matter, the Tribunal said: "Clearly, at least one relevant type of remunerative work appropriate in Mr Hendy's case is truck driving and delivery. However, he also worked for an extended period as a cellarman and assistant manager in a hotel, nevertheless he seems not to have done that work since about 1987." (As the Tribunal later noted, Mr Hendy had done no hotel work for nine years before he ceased all work.) 25 The Tribunal then determined the second question from the Flentjar list in the affirmative, concluding that his accepted conditions prevented him from continuing to undertake those kinds of work. 26 As to the third question set out in Flentjar, whether the accepted conditions are the only factors preventing the applicant from continuing to undertake the relevant work, the Tribunal said: "… The Tribunal again relies on the medical evidence before it. Dr Baz's report was interesting in this regard. While she recorded that no clinical abnormality was noted in either knee, ankles or the other major joints, she considered Mr Hendy may have difficulty with heavier types of work, especially those involving loading and unloading alcohol supplies or heavy goods. These activities could aggravate his knee symptoms. Mr Hendy's knee problems are not accepted disabilities. Dr Lennon, the orthopaedic surgeon who prepared a report for the Respondent, did not say very much about the occupational implications of Mr Hendy's conditions. However, despite finding no substantial restriction in Mr Hendy's knee and ankle conditions, he diagnosed a 'very minor medial compartmental osteoarthritis of the left knee'. This may provide some consistency in interpreting Dr Baz's opinion in that it seems that Mr Hendy has a minor osteoarthritic condition following the arthroscopy of several years ago. This is the condition that might be aggravated by heavy work. Dr Hession in his report considered that Mr Hendy could not perform cellarman duties because of the arthritis in his knees."

27 The Tribunal continued: "Dr Hession also suggested that Mr Hendy would find it difficult to move into light storeman work which would be within his capacity. This was because of lack of experience, age and absence from the workforce for four to five years. The Tribunal recognises that the types of work relevant here do not include work for which Mr Hendy is inexperienced. However, the Tribunal agrees with Dr Hession that labour market factors would operate to restrict Mr Hendy's potential for employment as a truck driver making deliveries or as an assistant manager or cellarman in the hotel industry. He had not done the latter work for about nine years at the time he made the claim under consideration in this application. He is less inhibited on this basis from finding truck driving work, but his problems relate more to his non-accepted disabilities and their effect on his capacity to do that work. The Tribunal has therefore concluded that the answer to question three from Flentjar… is no. The accepted disabilities are not the only factors preventing the Applicant from continuing to undertake the relevant remunerative work. As the requirements identified in Flentjar… are cumulative, and the third requirement is not satisfied on the evidence, it is unnecessary to consider the fourth question in the Flentjar case…"

The rival contentions (i) the correct approach to "remunerative work that the veteran was undertaking" within the meaning of s 24(1)(c) 28 Counsel for the applicant submitted that the first error committed by the Tribunal was in failing to consider the reasons why the applicant ceased his most recent work when determining whether the applicant was "prevented from continuing to undertake remunerative work that the veteran was undertaking" as required by s 24(1)(c). In reaching its decision that labour market forces and restrictions on his performing heavy duties, prevented him from working, the Tribunal had erroneously approached the question of what constitutes the remunerative work that the applicant was undertaking. The Tribunal was required to look at the reasons why the applicant ceased his last job, delivering garden supplies, and whether he ceased that job because of his accepted disabilities. It was argued that, only where the applicant had ceased his last work in circumstances which would have disentitled him from eligibility for a pension, would the Tribunal need to look beyond that last employment to other types of work undertaken by the applicant.

29 In relation to the first ground of appeal, counsel for the respondent submitted that the loss referred to in s 24(1)(c) may be caused either by a loss of existing employment or by an inability to obtain new employment. The term "remunerative work" is used in the section in a context which indicates an intention to refer to work generally and it is erroneous to read the phrase as referring to a particular job with a particular employer. It was claimed that the phrase "remunerative work which the [veteran] was undertaking" should be read as a reference to the type of work which the member previously undertook and not to any particular job. (ii) s 24(2)(b) 30 Next and alternatively, it was submitted that the Tribunal had failed to consider the provisions of s 24(2)(b). Having found that the applicant did not satisfy the provisions of s 24(1)(c), the Tribunal should have considered whether the ameliorating provisions of s 24(2)(b) were applicable to the applicant. Further, as the Tribunal is an inquisitorial body, if the material before it was inadequate to make the considerations it was required, it could have requested that it be provided with further material. 31 As to this second ground of appeal, the respondent submitted that the applicant gave no evidence of having made any attempt to engage in remunerative work after August 1996. In the circumstances the Tribunal could not have erred in failing to apply s 24(2)(b) as there was no material which would support a contention that s 24(2)(b) had any application to the case before the Tribunal. (iii) lack of evidence/unreasonableness 32 The third ground for review was that the Tribunal erred in finding that it was not the applicant's accepted psychiatric disabilities alone which prevented him from continuing to engage in the relevant remunerative work. It was submitted for the applicant that the Tribunal had incorrectly reproduced Dr Hession's evidence as to the applicant's capacity to work as a truck driver and that there was no evidence before the Tribunal capable of supporting the Tribunal's finding that labour market forces would prevent the applicant from working as a truck driver. Secondly, the Tribunal misdirected itself as to what was the relevant period of time for determining whether absence from the workforce was an operative cause by adopting Dr Hession's figure of four to five years. It was unreasonable to take into account the time that had passed since the applicant last performed a cellarman's duties as the applicant had been in alternative employment for the succeeding nine and a half years. Thirdly, it was claimed that there was no evidence to support the Tribunal's conclusion that the applicant's knee problem prevented him from working. Finally, the Tribunal purported to agree with Dr Hession that labour market forces would operate to prevent the applicant from gaining employment, yet only adopted the time that had passed since he last performed cellarman duties and ignored questions of age and lack of experience, the other two factors said by Dr Hession to constitute labour market forces. 33 In response, the respondent submitted that there was evidence to support all the findings made by the Tribunal or that they were findings of fact open to the Tribunal which could not be said to be findings that no rational person, properly understanding his or her duty, could make.

Scope of remunerative work to be considered 34 It is a preliminary and elementary observation that, by using the phrase "prevented from continuing to undertake remunerative work that the veteran was undertaking" in s 24(1)(c), the framers of the Act meant something quite different from the phrase "incapable of undertaking remunerative work" s 24(1)(b) and the statutory exegesis of that latter phrase in s 28 This point, though elementary, seems worth making both because it is not easy to bear in mind that the decision-maker needs to consider two quite distinct concepts in relation to remunerative work, and because the distinction between the two concepts sharpens an appreciation of the features of each. 35 It seems to me that if: (1) the veteran satisfies s 24(1)(b), that is, the veteran is, as it were, intrinsically totally and permanently incapacitated for significant amounts of work; (2) the veteran can fairly be said to have been actually undertaking remunerative work; (3) the veteran is prevented from continuing to undertake that work by incapacity from war-caused injury and/or disease; and (4) there is no other factor preventing the veteran from continuing to undertake that work; then, subject to proof of a loss of earnings thereby (proof affected by s 24(2)(a)), the veteran has satisfied s 24(1)(c) and established a right to the Special Rate of pension. In such a case, the Flentjar questions (see [23] above) are capable of ready and appropriate answers. 36 Had those matters been appreciated, the appellant might well have succeeded before the Tribunal, because the evidence was ample to support findings that he had met the tests just set out: · the Tribunal found he had passed what I have termed the intrinsically totally and permanently incapacitated test set up by s 24(1)(b); · there was evidence that he engaged in the garden supplies delivery work regularly, for significant periods and as a result of being hired in the open labour market after applying for work through a public employment agency and, so far as the evidence goes, without any actual difficulty extraneous to his accepted disability and admittedly war-caused problems (c.f. the situation in Sheehy v Repatriation Commission (1996) 66 FCR 569); · it seems clear that he ceased that work because of his service-related PTSD and it was the PTSD that prevented him from continuing to undertake that work; · there was evidence that there is no other factor preventing him from continuing to undertake that work. 37 In any case, the inquiry whether the appellant might as a matter of medical opinion now be unsuited for the work in question because of an elevated risk of injury arising from non-service related conditions seems to be beside the point, absent evidence that such risk was actually (as distinct from, ought to have been) preventing the veteran from continuing that work. Here, there was no finding (nor, I believe, evidence) that the appellant knew of any such medical opinion or was acting on it. Nor was there any suggestion in the applicant's evidence that, regardless of any medical opinion as to his physical condition, the applicant was avoiding heavy work as such. The evidence was that he gave up work entirely, and was not working for the garden supplies employer or on any comparable work because of his PTSD (including the associated alcoholism).

Labour market factors 38 In relation to that same issue of sole causation, the Tribunal raised the question of "labour market" factors. 39 It seems to me that a correct approach to this matter in point of legal principle requires some care. As a broad and abstract proposition, it appears perfectly correct to say that "labour market factors" may be a disentitling, concurrent source of prevention of a veteran from undertaking remunerative work that he or she had been ("was", in the awkward statutory phrase) undertaking. However, there are many circumstances which can be called labour market factors, for example, a high general rate of unemployment, a high rate of unemployment of persons in a particular age group, likely employer preference for would-be employees with recently practised skills, frequent employer trepidation at hiring persons with a lengthy unemployment record, and so on. The relevant legal considerations may differ as between such factors and, in relation to a given factor, as between cases. 40 It seems clear however that it is not within the intendment of the legislation that decision-makers might resort, under the rubric of labour market factors, to the mere consequences of a veteran's service-related disability for the purpose of defeating the veteran's claim. Among other things, if a service-related condition incapacitates a veteran for particular work, it will be more or less true in every case that, as time goes by, the veteran's ability to re-enter the workforce will tend to be impaired on account of lack of recent experienced of that work, absence from the workplace generally and, for older veterans, their increasing age. There would have been little point in providing for a work incapacity pension if the direct consequences of the incapacity could defeat the right to the pension. 41 In embarking on a consideration of labour market factors, the Tribunal appears to have failed to appreciate these distinctions. It said that Mr Hendy was "less" inhibited (then in the case of hotel work) from finding truck-driving work on the basis of long absence from the work. On one view, this suggests that some degree of inhibition on that basis was regarded as operative. As it is clear that his only long period of absence from truck driving was on account of his PTSD, any such inhibition could not lawfully have been relied on to disentitle him, whether alone or with other factors. 42 Coincidentally, this analysis casts light also on the question of when a veteran can, as I put it above, fairly be said to have been actually undertaking remunerative work, contemplated by s 24(1)(c). It is hardly likely that Parliament intended that a veteran, rendered unfit for heavier work by the ordinary wear and tear of heavy work and ordinary incidents of the aging process, who is nevertheless fit for and performing lighter work but who is incapacitated for the latter work by a service-related injury or condition, should be disentitled from a TPI pension merely because he or she has normally aged. 43 The same analysis would also be relevant to the s 24(1)(b) and s 28 assessment of the "vocational … qualifications and experience of the veteran" for the purpose of determining the degree of what I have called the veteran's intrinsic disability. As it happened, nothing the Tribunal did in relation to s 24(1)(b) and s 28 amounted, on this score, to a misapplication of those provisions. 44 Several authorities were cited by the parties: Banovich v Repatriation Commission (1986) 69 ALR 395; Starcevich v Repatriation Commission; Cavell v Repatriation Commission; Hall v Repatriation Commission (1994) 33 ALD 454; Flentjar v Repatriation Commission. Section 24(1)(c) was also considered in Lamers v Repatriation Commission [2001] FCA 24 (actually a re-run of Flentjar by his executor). 45 I think it is correct to say that none of these authorities, and certainly in my view neither of those decided by Full Courts, is inconsistent with the understanding of the law that I have indicated above. It is true that, taken literally, as the Tribunal took them, these are statements that appear to authorise the Tribunal's approach. However, it is, as always, necessary to understand the factual context in which judicial observations are made and to appreciate that general observations made in a particular context may not have been, and likely were not, intended to apply in a quite different factual context. 46 The meaning to be given to remunerative work in s 24(1)(c) was considered by a Full Court in Banovich. In that case a 76 year old pension applicant had been retired medically unfit from railways employment at 67 (for a non-service related condition) and would have been retired on age grounds at 71 (he had put his age back so to obtain work with the rail authority). The Court held (at 402-3): "We accept that the loss referred to in para 1(iii) may be caused either by a loss of existing employment or by an inability to obtain new employment. There is no difficulty in regarding either circumstance as preventing the member 'continuing to undertake' remunerative work. But 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. It follows that a member's loss of particular employment for a reason unrelated to a war disability would never destroy a member's subsequent entitlement to claim a special rate pension; the question would remain, at the relevant date for determination of a claim, whether the member was prevented by his or her war-related incapacity - and by that incapacity alone - from continuing in that field of remunerative activity." The Court's observations were liberally and beneficially intended. Even an applicant who had actually lost a job for reasons unrelated to service-caused disabilities would not necessarily be debarred from receiving the Special Rate pension. The Court was not concerned with creating difficulties for an applicant who could show that for service-related reasons he had ceased both an actual employment he had effectively undertaken and any other employment . 47 The issue was further considered by another Full Court in Starcevich. In that case a 68 year old applicant had ceased farming due to war-caused disability, and then been unable for the same reason to continue in a job with the Post Master General's Department when his work site was moved. He would have been required to retire from the Post Master General's Department at 65. Fox and Jenkinson JJ upheld the veteran's claim in separate judgments. Fox J held (at 225-6): "It seems to me that the intention of s 24(1)(c) is that the applicant must have suffered substantial loss of remuneration consequent alone upon the incapacity referred to in s 24(1)(a) and (b). The loss must be real, in the sense that the applicant cannot rely upon any remunerative work that he has undertaken in the past, but it would be unnecessarily restrictive to assess the loss by reference only to the last remunerative work undertaken before the applicant's inability to work became complete. In my opinion, a veteran's entitlement to a pension under s 24 may be based on his being prevented from continuing to undertake substantial remunerative work that he has undertaken in the past, even if that work was followed by work of a different type before the veteran ceased work altogether. In such circumstances, the passage of time from the cessation of the work upon which reliance is placed to the veteran's complete retirement may mean that the other requirement of s 24(1)(c), namely that the veteran's war-caused injury or disease alone prevents him from undertaking remunerative work upon which his claim is based, is not satisfied…" Jenkinson J said (at 227): "…the terms of s 24 in its statutory context do not, in my opinion, suggest any other particular time or period of time. Nor do I find anything in the language of the section to justify the confinement of the application of s 24(1)(c) to that type of remunerative work which was the last of several types of remunerative work to satisfy the criteria literally expressed in that paragraph." 48 None of this suggests that, if a veteran can make out a case based on the criteria literally expressed in s 24(1)(c), there is any warrant to defeat the claim by delving further into the past, so as to diminish the sufficiency of those express criteria. 49 In my opinion, Burchett J's general observations in Cavell are in point here. A practical approach is needed, and one that recognises the underlying beneficial nature of the legislation. The conclusion appears inescapable that the applicant had performed remunerative work in no trivial degree for several months as his last effort to work. There was ample material to suggest that it was his war-caused incapacity alone which had prevented him from continuing to undertake that work. Whether other factors prevented him from re-engaging in more onerous kinds of work that he had previously undertaken was beside the point. In any case here, the particular other factors may, in part, have been no more than necessary consequences of his accepted disability or factors that it might be unjust, having regard to the statute's evident purposes, and therefore unintended by the statute, to be taken into account. 50 In my view, the Tribunal fell into legal error in relation to this matter. It was at least free to consider only the last employment. Indeed, in my opinion, there was no reason for it to do more. It also asked itself wrong questions about "labour market factors".

Whether the applicant could rely on s 24(2)(b) 51 Section 24(2)(b) is an ameliorating provision specifically included in the Act to deal with a veteran who does not come within the provisions of s 24(1). To come within s 24(2)(b) an applicant must be under the age of 65 and have been genuinely seeking to engage in remunerative work, and the war-caused incapacity must be the substantial cause of the inability to obtain remunerative work. The Tribunal, having found that the applicant did not satisfy s 24(1)(c), did not consider whether the applicant could meet the provisions of s 24(2)(b) which, if applicable, would have deemed him to have been prevented by reason of his incapacity from continuing to undertake remunerative work that he had been undertaking. 52 Spender J considered s 24(2)(b) in Hall. His Honour said (at 461): "It seems to me that the question of whether a veteran has been 'genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing to so seek' has to be addressed in a realistic way, having regard to the nature and extent of the incapacity. Many veterans are permanently incapacitated by war-caused injury or disease for any form of remunerative work, and the requirement that such persons should be genuinely seeking work seems to involve something of a charade." His Honour also observed that evidence which shows that a veteran who may not be able to seek employment but indicated a willingness to accept work if any could be found, would be enough to satisfy the "genuinely seeking" requirement of s 24(2)(b). 53 The Tribunal is an inquisitorial body and is able to determine the matter de novo, in the process of making the "correct or preferable decision" to stand as the decision of the primary decision-maker: see Drake v Minister for Immigration & Ethnic Affairs (1979) 46 FLR 409 at 419 per Bowen CJ and Deane J and Bushell v Repatriation Commission (1992) 175 CLR 408 at 424-425 per Brennan J. In Grant v Repatriation Commission (1999) 57 ALD 1, a Full Court of this Court held: "[the AAT] is obliged not to limit its determination to the 'case' articulated by an applicant if the evidence and material which it accepts, or does not reject, raises a case on a basis not articulated by the applicant: see Sellamuthu v Minister for Immigration & Multicultural Affairs [1999] FCA 247 at [23] and Satheeskumar v Minister for Immigration & Multicultural Affairs [1999] FCA 1285 at [15]." However, the Tribunal's duty to expand the scope of its consideration beyond that which was actually articulated by the parties, is not enlivened unless there is some evidence and material on the relevant issue before the Tribunal. Budworth v Repatriation Commission (2001) 33 AAR 48 is an example where circumstances were held (by me) to exist so as to trigger the

duty to inquire fully (that aspect of the decision was not criticised on appeal: see Repatriation Commission v Budworth (2001) 33 AAR 476). 54 The case as put to the Tribunal for the applicant, who was represented by counsel, placed no reliance on s 24(2)(b). Nor was any evidence given by the applicant that, after he ceased his last job in August 1996, he made any attempt to seek any further remunerative work. There was also no evidence from the applicant that he was willing to undertake any suitable work if it could be found but that he had had difficulty in seeking employment. There was thus simply no evidence or material which necessitated the Tribunal giving consideration to the possible application of s 24(2)(b). 55 In any case, s 24(2)(b) seems to be a safety net provision, included in the Act to deal with the case of veterans who, following their military service, have been unable to get back into the workforce, so that it would not be possible to apply the provisions of s 24(1). This did not present as a case of a kind which s 24(2)(b) was intended to deal with. This was a veteran with a work history; a veteran who came within the category of persons for whose benefit s 24(1)(c) itself was enacted. 56 Accordingly, the Tribunal's failure to consider the applicant's claim pursuant to s 24(2)(b) did not amount to an error of law or, if it did, it was not an error of law that could have affected the ultimate result.

No evidence/unreasonableness ground 57 The third ground of appeal was that the Tribunal erred in finding that it was not the applicant's accepted war-caused incapacities which alone prevented him from continuing to undertake relevant remunerative work because there was no evidence capable of supporting that finding and/or such a finding was unreasonable on the evidence before the Tribunal. 58 The Court should be cautious in considering administrative decisions impugned on the basis of "no evidence" submissions and/or unreasonableness so as not to cross over into the prohibited area of merits review. In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, Mason CJ with Brennan and Deane JJ agreeing, said (at 356): "according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place." (original emphasis) In McMullen v Commissioner for Superannuation (1985) 61 ALR 189, a Full Court of this Court held (at 207): "In our opinion the finding of the Tribunal was essentially a finding of fact and beyond the jurisdiction of this court unless there was no material upon which such a finding could be based. A contention that there was insufficient material is a question of degree and a determination of fact, into which this court is not entitled to inquire." 59 The Tribunal was required to determine whether there were other factors which would prevent the applicant returning to the workforce in the "remunerative work he was undertaking". The Tribunal relied on the evidence of Drs Baz, Lennon and Hession in its decision. Dr Baz was of the view that the applicant was capable of lighter truck driving such as courier work in or light truck driving and that none of his non war-caused incapacities would prevent him from engaging in such work. Dr Baz concluded that the applicant's psychiatric disability was the sole reason for his unfitness for any work. Dr Lennon's evidence was that there was evidence of only "very minor osteoarthritis in the knee" and that the applicant had ceased working because of PTSD. Dr Hession said: "He has arthritis in both knees but the degree of arthritis is not such as to prevent employment, although excessive lifting or very strenuous physical activity or weight bearing should be restricted. Mr Hendy is considered capable of working more than eight hours each week, perhaps more than 20 hours each week, carrying out light work. Truck driving or the duties of a courier would be within his capacity but such duties should not be carried out because of his dependence on alcohol. I do not consider he is fit for cellarman duties because of the arthritis in his knees but light storeman duties should be within his capacity, even though he is not experienced in such work. Realistically, he is not likely to gain employment in a competitive workforce because of his age, his lack of experience and his absence from the workforce for four to five years. There is no other fact which, in my opinion, would affect his capacity to work." (original emphasis) 60 The applicant's own evidence was that his knees had not caused him any problems in performing his last job and that since his knee was operated on in 1997, he had not suffered any further impairment. Having dealt with the evidence the Tribunal concluded: "Dr Hession also suggested that Mr Hendy would find it difficult to move into light storeman work which would be within his capacity. This was because of lack of experience, age and absence from the workforce for four to five years. The Tribunal recognises that the types of work relevant here do not include work for which Mr Hendy is inexperienced. However, the Tribunal agrees with Dr Hession that labour market factors would operate to restrict Mr Hendy's potential for employment as a truck driver making deliveries or as an assistant manager or cellarman in the hotel industry. He had not done the latter work for about nine years at the time he made the claim under consideration in this application. He is less inhibited on this basis from finding truck driving work, but his problems relate more to his non-accepted disabilities and their effect on his capacity to do that work" (emphasis added) So far as truck-driving is concerned, the great preponderance of the evidence, including Dr Hession's, was that all but the heaviest types of work are within the applicant's physical capabilities. 61 In Repatriation Commission v Flentjar (1997) 47 ALD 67, Spender J at first instance stated (at 71-72, citations omitted): "In Hindi v Minister for Immigration and Ethnic Affairs Sheppard J referred … to the observation of Gummow J in Khan v Minister for Immigration and Ethnic Affairs, where Gummow J noted that in the context of a review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) … a decision-maker was required to give 'proper, genuine and realistic consideration upon the merits [of the case]'. Sheppard J also referred to the observations of Wilcox J in Brelin v Minister for Immigration and Ethnic Affairs where his Honour said that the question was whether the application had received 'proper and adequate consideration'. In my opinion the tribunal failed to consider the prospect of Mr Flentjar working as a taxi driver in the assessment period if he had been free of his war-caused incapacities, as opposed to whether he had the capacity to work as a taxi driver from a medical viewpoint during that period. The former question, which is what the tribunal is obliged to consider, would involve considerations of what opportunities there were for taxi drivers between February 1994 and September 1995. The impact of Mr Flentjar's age on his obtaining such employment and thirdly, the effect which 13 years' absence from the workforce and at least 21 years' absence from the taxi business would have had on those prospects." The need to give the matters raised in s 24(1)(c) "proper genuine and realistic consideration" was affirmed on appeal by Branson J, Beaumont and Merkel JJ agreeing: see (1997) 48 ALD 1 at 5. The availability of "proper, genuine and realistic consideration" as a ground of review under Part 8 of the Migration Act 1958 (Cth) was rejected by a Full Court of this Court in Minister for Immigration & Multicultural Affairs v Anthonypillai (2001) 106 FCR 426. However, the court in that case made it clear that its conclusions were based solely on the Migration Act and in reaching its conclusion made reference to the limited grounds of review available in this Court, under Part 8 compared with the much broader powers of review granted to this court by the Administrative Decision (Judicial Review) Act 1977 (Cth). Section 44 of the AAT Act is not so limited, it provides for appeals on any question of law. Flentjar remains binding on me. 62 The Tribunal's decision, on a fair reading, simply does not, in my opinion, evince a proper, genuine and realistic consideration, in the sense of that expression intended in Flentjar, of the medical evidence. If Dr Hession's views as to Mr Hendy's physical capabilities were to be rejected, one would expect some explanation as to why that would be so. That is even more so, given that the Tribunal found, on the basis of acceptance of the very similar views of Dr Lennon in the s 24(1)(b) context, precisely that "Mr Hendy's orthopaedic conditions are not a reason for his incapacity to undertake remunerative employment": see [18] above. The strong impression, indeed, is that the Tribunal, with respect, misunderstood or confused the medical evidence. This was significant because the Tribunal itself, at least on one view (c.f. [40] above), apparently excluded any question of labour market factors as a reason, concurrent with the PTSD, why the applicant could not do truck driving work. 63 Further, in relation to the labour market factors, all that the Tribunal did was briefly to pick up observations of Dr Hession, without meaningful analysis. At the time of Dr Hession's report, the applicant had been out of the workforce for about 3 years and 10 months not four to five years as reported. The applicant was then aged 56 years, an age at which many people are regularly in manual employment. His last work experience was as a driver of a small truck and he had much other driving and delivery experience. Evidently, from the applicant's own history, part-time truck driving can be found. These undoubted facts necessitated, if the Tribunal were to give proper and realistic consideration to the suggestion that labour market factors would prevent (and not merely hinder) the applicant from gaining remunerative work, that the Tribunal provide some explanation as to why they would so prevent the applicant, rather than a theoretical job-seeker. 64 In my opinion, the Tribunal failed properly, genuinely and realistically to consider the factors it relied upon to determine that the war-caused incapacities was not the only reason that the applicant was "prevented from continuing to undertake remunerative work that he was undertaking. Thereby, the Tribunal erred in law. 65 There is another way of looking at the matter. Although an administrative tribunal is not required to refer in detail to every aspect of a case, a failure by the tribunal to give reasons, or adequate reasons explaining the process by which it reaches its decisions can amount to an error of law: see Grundman v Repatriation Commission [2001] FCA 892 per Gray J at para 31; Brackenreg v Comcare Australia (1995) 56 FCR 335 at 343-352 and the authorities therein cited. In Grundman Gray J stated at para 31: "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 this matter, a fair reading does not provide any basis for ascertaining why the Tribunal reached the surprising conclusions it did, at least in relation to the applicant's former knee problems. Accordingly, the Tribunal also erred in law in this regard.

Disposition 66 For the reasons given, the appeal against the decision of the Tribunal will be allowed. The decision of the Tribunal will be set aside and the matter will be remitted to the Tribunal, differently constituted, to be determined according to law. The respondent will be ordered to pay the applicant's costs up to and including 30 March 2001. The applicant is to pay the respondent's costs after that date (except as to attendance to receive judgment).

Costs 67 The applicant has been successful in his appeal. He is entitled to have his reasonable costs paid by the respondent. However, further costs in this matter were incurred because counsel for the applicant sought leave of the Court to amend the notice of appeal near the conclusion of the hearing, to include the ground of appeal upon which the applicant has ultimately succeeded. Counsel for the respondent did not object to the granting of leave, but very reasonably suggested that, in order to keep costs down, there be no further oral hearing unless necessary and that the matter be further dealt with by way of written submissions. No further oral hearing was required. The applicant's failure to have all grounds of appeal prepared in advance of the hearing has no doubt resulted in further costs being incurred which could have been avoided. Accordingly, the applicant should pay the respondent's costs incurred after the hearing. I certify that the preceding sixty seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

Solicitor for the Applicant: Dibbs Barker Gosling

Solicitor for the Respondent: Australian Government Solicitor

Date of Hearing: 30 March 2001

Date of further Written Submissions: 18 April 2001, 3, 21 & 24 May 2001