Legislative Provisions
7 Section 13(1) of the Act provides that where a veteran is incapacitated from war-caused injury or disease, the Commonwealth is liable to pay a pension by way of compensation to the veteran. The circumstances in which an injury or disease are taken to be "war-caused" are set out in s 9 of the Act, which relevantly provides as follows:
War-caused injuries or diseases
(1) Subject to this section and section 9A, for the purposes of this Act, an injury suffered by a veteran shall be taken to be a war-caused injury, or a disease contracted by a veteran shall be taken to be a war-caused disease, if:
(a) the injury suffered, or disease contracted, by the veteran resulted from an occurrence that happened while the veteran was rendering operational service;
(b) the injury suffered, or disease contracted, by the veteran arose out of, or was attributable to, any eligible war service rendered by the veteran;
…
but not otherwise.
It is uncontentious that the applicant rendered "operational service" in Vietnam (which is taken to be "eligible war service" pursuant to s 7 of the Act) and is a "veteran" for the purposes of the Act.
8 To answer the causal question posed by s 9, the Commission - and the Tribunal on review - must apply "the complicated convolutions of the statutory standards and prescriptions on causation" set out in ss 120 and 120A of the Act: Forrester v Repatriation Commission [2013] FCA 898 at [9] per Mortimer J.
9 Section 120 of the Act is relevantly in these terms:
Standard of proof
(1) Where a claim under Part II for a pension in respect of the incapacity from injury or disease of a veteran, or of the death of a veteran, relates to the operational service rendered by the veteran, the Commission shall determine that the injury was a war-caused injury, that the disease was a war-caused disease or that the death of the veteran was war-caused, as the case may be, unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination.
Note: This subsection is affected by section 120A.
…
(3) In applying subsection (1) or (2) in respect of the incapacity of a person from injury or disease, or in respect of the death of a person, related to service rendered by the person, the Commission shall be satisfied, beyond reasonable doubt, that there is no sufficient ground for determining:
(a) that the injury was a war-caused injury or a defence-caused injury;
(b) that the disease was a war-caused disease or a defence-caused disease; or
(c) that the death was war-caused or defence-caused;
as the case may be, if the Commission, after consideration of the whole of the material before it, is of the opinion that the material before it does not raise a reasonable hypothesis connecting the injury, disease or death with the circumstances of the particular service rendered by the person.
Note: This subsection is affected by section 120A.
(4) Except in making a determination to which subsection (1) or (2) applies, the Commission shall, in making any determination or decision in respect of a matter arising under this Act or the regulations, including the assessment or re-assessment of the rate of a pension granted under Part II or Part IV, decide the matter to its reasonable satisfaction.
Note: This subsection is affected by section 120B.
(5) Nothing in the provisions of this section, or in any other provision of this Act, shall entitle the Commission to presume that:
(a) an injury suffered by a person is a war-caused injury or a defence-caused injury;
(b) a disease contracted by a person is a war-caused disease or a defence-caused disease;
(c) the death of a person is war-caused or defence-caused; or
(d) a claimant or applicant is entitled to be granted a pension, allowance or other benefit under this Act.
(6) Nothing in the provisions of this section, or in any other provision of this Act, shall be taken to impose on:
(a) a claimant or applicant for a pension or increased pension, or for an allowance or other benefit, under this Act; or
(b) the Commonwealth, the Department or any other person in relation to such a claim or application;
any onus of proving any matter that is, or might be, relevant to the determination of the claim or application.
…
10 As the applicant's claim was made after 1 June 1994, s 120A is also applicable and has a bearing on the task prescribed by s 120(3). That provision relevantly provides:
Reasonableness of hypothesis to be assessed by reference to Statement of Principles
(1) This section applies to any of the following claims made on or after 1 June 1994:
(a) a claim under Part II that relates to the operational service rendered by a veteran;
…
Note 1: Subsections 120(1), (2) and (3) are relevant to these claims.
…
(3) For the purposes of subsection 120(3), a hypothesis connecting an injury suffered by a person, a disease contracted by a person or the death of a person with the circumstances of any particular service rendered by the person is reasonable only if there is in force:
(a) a Statement of Principles determined under subsection 196B(2) or (11); or
…
that upholds the hypothesis.
Note: See subsection (4) about the application of this subsection.
…
11 Section 196B of the Act relevantly provides:
Functions of Authority
(1) This section sets out the functions of the Repatriation Medical Authority. The main function of the Authority is to determine Statements of Principles for the purposes of this Act and the [Military Rehabilitation and Compensation Act 2004 (Cth)].
Determination of Statement of Principles
(2) If the Authority is of the view that there is sound medical-scientific evidence that indicates that a particular kind of injury, disease or death can be related to:
(a) operational service rendered by veterans; or
…
the Authority must determine a Statement of Principles in respect of that kind of injury, disease or death setting out:
(d) the factors that must as a minimum exist; and
(e) which of those factors must be related to service rendered by a person;
before it can be said that a reasonable hypothesis has been raised connecting an injury, disease or death of that kind with the circumstances of that service.
…
12 Owing to the centrality of ss 120 and 120A to this appeal, it is necessary that I make a few observations about the applicable statutory scheme. As will become apparent, the process of establishing the causal connection between the veteran's injury or disease and their service is intended to operate beneficially towards the veteran making the claim.
13 The effect of s 120(1) is that where a veteran makes a claim under Pt II (including s 13 of the Act) for a pension in respect of incapacity from injury or disease, related to the operational service rendered by the veteran, he or she has the benefit of a reverse criminal law standard of proof in relation to whether the injury or disease is war-caused: Summers v Repatriation Commission (2015) 230 FCR 179 at 185-186 [25] per Kenny, Murphy and Beach JJ. In other words, s 120(1) requires the decision-maker to determine that an injury or disease was war-caused "unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination". The rationale for the reverse criminal law standard of proof is the special recognition given in the Act to the risk of injury or death to which service men and women are exposed: Summers at 187 [31].
14 Section 120 does not, however, go so far as to impose a presumption that the veteran's injury or disease is war-caused: s 120(5) of the Act. Nor does it place an onus on the veteran to prove that his or her injury is war-caused: s 120(6) of the Act.
15 Section 120(3) operates as a decision heuristic or threshold inquiry in the application of s 120(1). To use the language of Toohey J in Bushell v Repatriation Commission (1992) 175 CLR 408 at 438, it is "epexegetical" of s 120(1), but it is not exhaustive of the content of s 120(1). It effectively prescribes a circumstance in which satisfaction beyond reasonable doubt for the purposes of s 120(1) is deemed to have been established: Forrester at [13] per Mortimer J. That is, where the material before the decision-maker does not raise a "reasonable hypothesis" connecting the injury or disease with the circumstances of the veteran's service, the requisite causal connection is deemed not to exist. In East v Repatriation Commission (1987) 16 FCR 517, Jenkinson, Neaves and Wilcox JJ explicated the "reasonable hypothesis" concept at 532-533 [28]:
… The meaning of the phrase "reasonable hypothesis" was felicitously explained by a Veterans' Review Board in Stacey (unreported Nos V83/0396, V84/082l and V28/0n, 26 June 1985); words quoted by the Administrative Appeals Tribunal in Re Dell and Repatriation Commission (1986) 5 AAR 253 at 254-255:
"A hypothesis may be conveniently defined as: 'proposition made as basis for reasoning, without assumption of its truth; supposition made as starting point for further investigation from known facts; groundless assumption': The Concise Oxford Dictionary.
The addition of the word 'reasonable' would however seem to imply that what is required is more than a mere hypothesis. In the opinion of the Board, to be reasonable, a hypothesis must possess some degree of acceptability or credibility - it must not be obviously fanciful, impossible, incredible or not tenable or too remote or too tenuous. For a reasonable hypothesis to be 'raised' by material before the Board, we think it must find some support in that material - that is, the material must point to, and not merely leave open, a hypothesis as a reasonable hypothesis. At the same time, however, a hypothesis may be reasonable without having been proved (either on the balance of probability or beyond reasonable doubt) to be correct as a matter of fact. Were it otherwise, it would no longer be a hypothesis but would have been elevated to some higher status. Accordingly a connection asserted by a hypothesis to exist between death or incapacity and service may still be reasonable even though theoretical, and it may be theoretical in either or both of [at] least two senses: by postulating a known medical fact but in circumstances not known to have definitely existed in the instant case; or by postulating a medical principle which science is not yet able to definitely prove but is unable to describe as unreasonable."
We agree with this analysis. A reasonable hypothesis requires more than a possibility, not fanciful or unreal, consistent with the known facts. It is an hypothesis pointed to by the facts, even though not proved upon the balance of probabilities.
16 Following the High Court's decision in Bushell, s 120A was introduced in 1994 to provide the necessary basis for a finding that a hypothesis was "reasonable" in a medical or scientific sense. The limited function of the Statement of Principles (the "SoP") was explained by Heerey J in Deledio v Repatriation Commission (1997) 47 ALD 261 (at 275):
But it is necessary to repeat that the SoP has no function in relation to the proof or disproof (under s 120(1)) of the particular facts of a veteran's case. The [SoP's] function is limited to prescribing a medical-scientific standard with which a hypothesis must be consistent - so that the SoP can "uphold" the hypothesis. In the words of the minister (Hansard, 9 June 1994, at 1808) the SoPs were intended to "provide the template within which the individual claims will be determined". Put another way, the SoP is a subset of proved (Bushell at 414) or known (Byrnes at 571) scientific fact. Where an SoP is applicable, it is a statute-backed declaration of what is proved or known scientific fact.
Therefore when s 196B(2) says a factor "must … exist" and "must be related to service", it is not interfering with the functions of ss 120(3) and 120(1). On the contrary, the [Repatriation Medical Authority ("RMA")] is to identify the minimum factors which can connect the particular kind of injury etc with the circumstances of the particular kind of service (operational etc). If there is more than one factor the RMA is to determine which of them (or whether all of them) must be related to the circumstances of the service (see above). The particular claim then has to fit the template laid down in the SoP. The Byrnes methodology is applied. Do the facts raised by the claimant give rise to a reasonable hypothesis? Proof of facts is not in issue at this point. The hypothesis will not be reasonable if it is:
(i) contrary to proved or known scientific facts,
(ii) obviously fanciful, impossible, incredible, absurd, ridiculous, not tenable, too remote or too tenuous; or
(iii) (since 1994) inconsistent with (not upheld by) an applicable SoP.
His Honour's observations were approved by the Full Court on appeal in Repatriation Commission v Deledio (1998) 83 FCR 82 ("Deledio (1998)").
17 Where the material does raise a "reasonable hypothesis", the operation of s 120(3) is spent and the case falls to be determined in accordance with s 120(1). In Bushell, Mason CJ, Deane and McHugh JJ observed at 416:
The Commission will be satisfied beyond reasonable doubt "that there is no sufficient ground for making [the] determination" if it is satisfied beyond reasonable doubt that it cannot accept the raised facts or so many of them as are necessary to support the hypothesis. Thus, if the Commission is satisfied beyond reasonable doubt that it cannot accept the raised facts because of the unreliability of the material which is claimed to support them or because of the superior reliability of other parts of the material before the Commission or because the raised facts depend on inferences which the Commission is satisfied cannot be drawn, the Commission will be satisfied that there is no sufficient ground for making the determination. But unless the Commission is satisfied beyond reasonable doubt that there is no sufficient ground for the factual foundation of the hypothesis, the claim must succeed; we cannot conceive of a case where, for the purpose of s. 120(3), the hypothesis is reasonable having regard to the raised facts, yet the Commission could be satisfied, "beyond reasonable doubt, that there is no sufficient ground for making the determination" even though the raised facts are not disproved. Indeed, once there is sufficient factual material to point to a reasonable hypothesis connecting the injury etc. with the operational service, it seems convenient simply to treat the case as governed by the application of s. 120(1). If that is done, the claim will succeed unless the Commission is satisfied beyond reasonable doubt that the factual foundation upon which the hypothesis can operate does not exist.
(Footnote omitted.)
18 In a similar vein, Mason CJ, Gaudron and McHugh JJ observed in Byrnes v Repatriation Commission (1993) 177 CLR 564 at 570:
Once a reasonable hypothesis is raised, the question for the Commission is then whether it is satisfied beyond reasonable doubt that there is no sufficient ground for making a determination that the injury was war-caused. The Commission will be so satisfied if it is satisfied beyond reasonable doubt that the factual foundation of the hypothesis has been disproved, either by proof beyond reasonable doubt that a fact or fact relied upon to support the hypothesis is not true, or by proof beyond reasonable doubt of the truth of a further fact, inconsistent with the hypothesis.
(Emphasis added and footnotes omitted.)
19 In Deledio (1998), a Full Court of this Court constituted by Beaumont, Hill and O'Connor JJ helpfully distilled some of the foregoing principles into a four-step analytical framework (the "Deledio Steps") (at 97-98):
1. The Tribunal must consider all the material which is before it and determine whether that material points to a hypothesis connecting the injury, disease or death with the circumstances of the particular service rendered by the person. No question of fact finding arises at this stage. If no such hypothesis arises, the application must fail.
2. If the material does raise such a hypothesis, the Tribunal must then ascertain whether there is in force a SoP determined by the Authority under s 196B(2) or (11) …
3. If a SoP is in force, the Tribunal must then form the opinion whether the hypothesis raised is a reasonable one. It will do so if the hypothesis fits, that is to say, is consistent with the "template" to be found in the SoP. The hypothesis raised before it must thus contain one or more of the factors which the Authority has determined to be the minimum which must exist, and be related to the person's service (as required by ss 196B(2)(d) and (e)). If the hypothesis does contain these factors, it could neither be said to be contrary to proved or known scientific facts, nor otherwise fanciful. If the hypothesis fails to fit within the template, it will be deemed not to be "reasonable" and the claim will fail.
4. The Tribunal must then proceed to consider under s 120(1) whether it is satisfied beyond reasonable doubt that the death was not war-caused, or in the case of a claim for incapacity, that the incapacity did not arise from a war-caused injury. If not so satisfied, the claim must succeed. If the Tribunal is so satisfied, the claim must fail. It is only at this stage of the process that the Tribunal will be required to find facts from the material before it. In so doing, no question of onus of proof or the application of any presumption will be involved.
(Emphasis added.)
20 It was common ground that the Deledio Steps provide the proper framework for applying ss 120 and 120A. The locus of the dispute in this appeal is the Tribunal's application of steps 3 and 4 of the Deledio Steps and, ultimately, whether the applicant's Conditions are war-caused.