alterations are made to the Statement of Reasons for the Decision as follows: At [37], the name of the Applicant is amended to read "Mr McCann" not "Mr Harris". At [41], the name of "Dr Douglas" is amended to read "Dr Springfield".

................................[SGD].................................

Decision: The Tribunal affirms the decision under review.

.........................[SGD]...........................

VETERANS' AFFAIRS - claim for special rate of pension - condition of right knee osteoarthritis - whether non-accepted conditions prevented the applicant from undertaking employment - sequela condition - alone test not satisfied - ameliorating provisions not satisfied - decision affirmed.

Administrative Review Tribunal Act 2024 (Cth)

Banovich v Repatriation Commission [1986] FCA 397

Dorsett and Repatriation Commission (Veterans' Entitlements) [2018] AATA 2241

Fox v Repatriation Commission [1997] FCA 176; (1997) 45 ALD 317 Husband v Repatriation Commission [2000] FCA 356 Leane v Repatriation Commission [2004] FCAFC 83 Magill v Repatriation Commission [2002] FCA 244 Owen v Repatriation Commission (1995) 38 ALD 241 Repatriation Commission v Hendy [2002] FCAFC 424

Repatriation Commission v Richmond [2014] FCAFC 124 Repatriation Commission v Smith [1987] FCA 260; (1987) 15 FCR 327 Repatriation Commission v Woodall [2015] FCA 1267 Richmond v Repatriation Commission [2014] FCA 272 Smith v Repatriation Commission [2014] FCAFC 53 Wright v Repatriation Commission [2005] FCA 7; (2005) 144 FCR 302

Guide to the Assessment of Rates of Veterans' Pensions, fifth edition

Statement of Principles concerning osteoarthritis - Instrument no. 62 of 2017

Statement of Principles concerning internal derangement of the knee - Instrument no. 8 of 2019

1. On 6 September 2023, the applicant, Mr McCann, made an application for review1 to the General Division of the Administrative Appeals Tribunal (the AAT)2 of the decision by the Veterans' Review Board (the VRB) to affirm the determination that Mr McCann was not entitled to the disability pension at the 'Special Rate' pursuant to s 24 of the Veterans' Entitlement Act 1986 (Cth) (the VEA).
2. The VRB decision affirmed an earlier decision by the Repatriation Commission (the Commission) made on 7 December 2022, by which the Commission had determined to continue Mr McCann's pension at 100% of the 'General Rate'.
3. In doing so, the VRB had determined that Mr McCann did not qualify for the 'Special Rate' of pension, pursuant to s 24 of the VEA, because he could not satisfy the 'alone' test due to his non VEA-accepted condition of right knee osteoarthritis.
4. Mr McCann gave evidence in person at the hearing. Dr Springfield, a general practitioner, and Dr Douglas, an occupational physician, gave evidence at the hearing. Mr McCann was represented by Mr Ken Cullen, a RSL Advocate. Mr Ben Dube of Sparke Helmore Lawyers represented the Commission.
5. The Tribunal admitted into evidence the exhibits which are listed in the annexure to these reasons.

1. Mr McCann was born in August 1957 and is now aged 67.
2. Mr McCann served in the Australian Army for 21 years from February 1977 to October 1998, initially as a field engineer and then trained as a fitter armourer in the Royal Australian Electrical and Mechanical Engineers, reaching the rank of Warrant Officer Class Two.

2 On 14 October 2024, the Administrative Appeals Tribunal became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), proceedings in the AAT that were not finalised before 14 October 2024 are to be continued and finalised by the Tribunal. Anything done in relation to the proceeding before 14 October 2024 is taken to have been done by the Tribunal.

1. Post his service in the Australian Army, Mr McCann commenced employment with Gilbarco Veeder-Root (Gilbarco), drawing on his extensive Army experience and skills, and spent 20 years with that employer, rising to the position of Senior Controller.
2. On 28 September 2018, Mr McCann retired from Gilbarco, aged 61.
3. On 16 August 2022, Mr McCann made a claim for an increase in disability pension (Claim).3 At that time, Mr McCann was 64 years of age, two days short of his 65th birthday.
4. By a determination dated 7 December 2022, a delegate of the Commission denied Mr McCann's claim for an increase in disability pension and determined an ongoing entitlement to a disability pension at 100% of the 'General Rate'.4
5. The delegate refused to grant the 'Intermediate Rate' or 'Special Rate' because the non VEA-accepted condition of right knee osteoarthritis contributed to Mr McCann's chronic pain, and therefore he could not satisfy the 'alone' test. The determination provided a lifestyle rating of 4 and an impairment rating of 65 points, combining to give a degree of incapacity of 100%.
6. On 21 December 2022, Mr McCann applied to the VRB for a review of the 20 December 2022 determination.
7. On 26 April 2023, the VRB affirmed the decision which is now under review before the Tribunal.5

1. The issue before the Tribunal is whether Mr McCann is entitled for payment of the pension at the 'Intermediate Rate' or 'Special Rate'. These rates for pension under the VEA are substantially more generous then the 'General Rate', and in the case of the 'Special Rate', is to provide for severely disabled veterans who are unable to have a normal working life because of the incapacity resulting from their war or defence service.
2. The Tribunal must determine:6

(a) The 'assessment period'.

(b) Whether Mr McCann:

6 See sections 23 (Intermediate Rate) and 24 (Special Rate) of the VEA.

(i) made a valid application under s 15 of the VEA for an increase in pension;

(ii) had not yet turned 65 at the time his application was made; and

(iii) was being paid the disability pension at a rate equal to or greater than 70% of the 'General Rate' of pension.

(c) If the answer to (b) is yes, whether Mr McCann is totally and permanently incapacitated, that is, unable to work more than 8 hours per week (Special Rate) or 20 hours per week (Intermediate Rate) due to service-caused incapacity alone.

(d) If the answer to (c) is yes, whether Mr McCann by reason of incapacity from his service-caused conditions, alone, is prevented from continuing to undertake remunerative work that he was undertaking.

(e) If the answer to (d) is yes, whether Mr McCann, by reason of being prevented from continuing to undertake remunerative work, suffered a loss of salary or wages, or of earnings, that he would not have suffered if he was free of that incapacity.

(f) If the answer to (e) is yes, from what date should Mr McCann be paid the pension at the 'Intermediate Rate' or 'Special Rate'.

1. Part 2 of the VEA deals with pensions, other than service pensions, for veterans and their dependents. Section 15 of the VEA allows a veteran to make a claim for an increase in pension.
2. Section 19 of the VEA provides the way in which a claim for a pension is to be determined. Relevantly, for the present application for review, s 19(5B) of the VEA mandates that s 23 (Intermediate Rate) and s 24 (Special Rate) of the VEA applies in assessing Mr McCann's eligibility for a pension.
3. When determining an application for an increase in the rate of pension (in this case from 'General Rate' to 'Intermediate Rate' or 'Special Rate'), a veteran's entitlement is determined in respect of any circumstances within the 'assessment period'.
4. The assessment period starts on the day the application for an increase in the pension was received until the date of the decision of the Tribunal.7
5. Pursuant to s 19(6) of the VEA, if the 'Intermediate Rate' or 'Special Rate' pension is payable at some point during the assessment period, then, subject to s 24A of the VEA,

7 See section 19(9) of the VEA; Richmond v Repatriation Commission [2014] FCA 272 at [107].

Mr McCann will become eligible for the 'Intermediate Rate' or 'Special Rate' for the whole of the assessment period.8

1. Section 23 of the VEA provides for entitlement to the 'Intermediate Rate' pension and relevantly states:

(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's incapacity from war-caused injury or war-caused disease, or both, is, of itself alone, of such a nature as to render the veteran incapable of undertaking remunerative work otherwise than on a part-time basis or intermittently; and

(c) the veteran is, by reason of incapacity from 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 from that incapacity; and

(d) section 24 or 25 does not apply to the veteran.

(2) Paragraph (1)(b) shall not be taken to be fulfilled in respect of a veteran who is undertaking, or is capable of undertaking, work of a particular kind:

8 Repatriation Commission v Smith [1987] FCA 260; (1987) 15 FCR 327.

(a) if the veteran undertakes, or is capable of undertaking, that work for 50 per centum or more of the time (excluding overtime) ordinarily worked by persons engaged in work of that kind on a full-time basis; or

(b) in a case where paragraph (a) is inapplicable to the work which the veteran is undertaking or capable of undertaking - if the veteran is undertaking, or is capable of undertaking, that work for 20 or more hours per week.

(a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, to the extent set out in paragraph (1)(b) 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:

(i) if 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;

(ii) if the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; or

(iii) if the veteran has been engaged in remunerative work on a part-time basis or intermittently for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; 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.

1. Section 24 of the VEA provides for entitlement to the 'Special Rate' pension and relevantly states:

(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 her 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.

(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 her or her own account, by reason of that incapacity if:

(i) the veteran has ceased to engage in remunerative work for reasons other than her 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 her 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.

1. Section 28 of the VEA provides that in determining for the purposes of s 24(1)(b) of the VEA, whether a veteran who is incapacitated from war-caused injury or war-caused disease, or both, is incapable of undertaking remunerative work, then regard must be had 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.

(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).

1. Section 120 of the VEA provides the standard of proof required; s 120(4) of the VEA requires that a veteran's entitlement to an increased pension be decided on the decision-maker's reasonable satisfaction.9

(a) In consequence of his military service, Mr McCann has several VEA-accepted medical conditions (the VEA-accepted conditions):10

(i) osteoarthritis left knee;

(ii) torn posterior cruciate ligaments right knee (1989);

(iii) bilateral sensorineural hearing loss;

(iv) bilateral tinnitus;

(v) ligamentous strain of the cervical region;

(vi) ligamentous strain right foot;

9 Smith v Repatriation Commission [2014] FCAFC (Smith) 53 at [161].

(vii) lumbar spondylosis;

(viii) non melanotic malignant neoplasm of the skin of the face;

(ix) tinea.

(b) Mr McCann has the medical condition of right knee osteoarthritis not accepted under the VEA (the non VEA-accepted condition).

(c) The assessment period commenced on 16 August 2022 and runs until the date of the Tribunal's decision.11

(d) Mr McCann validly applied for an increase to his pension pursuant to s 15 of the VEA.

(e) Mr McCann had not yet turned 65 at the time of his application (he was 64).

(f) Mr McCann was being paid 100% of the 'General Rate' pension.12

(g) Mr McCann is unable to work up to 8 hours per week, or at all, because of his medical conditions.

1. Mr McCann in his written statement, explains why he ceased working at Gilbarco:13

I initially started my role as a Workshop Supervisor and was in this role for 12 years. During this time I had extensive surgery on my left knee, which really started to restrict my workshop duties dramatically after surgery. Before the surgery, my left knee would be in pain and collapsing regularly, which became a safety issue. At this stage my back along with my knees were beginning to restrict my duties in the workshop and each day became a difficult grind.

As the years progressed in this role, I had more issues with my back and both knees. My left knee began to collapse unexpectantly again and I was finding it more and more difficult to sit at the desk and also drive the Automatic ute provided for my work. I was beginning to struggle with all facets of my role due to these issues. My right knee and back were really beginning to control my life with constant pain and discomfort on a daily basis. I eventually had a total knee replacement on the left knee in 2018. This was not a simple knee replacement and other works had to be performed on my knee to remove artificial ligaments, screws and staples plus redefine the knee joint for replacement surgery. After the surgery it

took sometime for recovery, but I had a lot of pain and discomfort after surgery with my back and right knee and struggled on a daily basis to concentrate and perform my sedentary duties. I also had issues with my hearing with all these issues weighing heavily on me physically.

1. Gilbarco in a letter dated 23 August 2018, confirmed acceptance of Mr McCann's retirement with a final date of employment of 28 September 2018.14
2. Mr McCann's income from Gilbarco in financial year 2018/2019 was $98,288.15

1. In the Claim, Mr McCann answered the question as to which of his accepted disabilities have become worse since they were last assessed, stating:16

Hearing, since my last assessment my hearing as observed by family and friends has worsen. Tinnitus, See medical impairment sheet enclosed. Resting Joint Pain, See medical impairment sheet enclosed. Right foot, Chronic right foot pain, and restricted range of movement. Left and Right Knees Conditions. Far greater range loss of movement, Constant pain 24 7 unable to walk any distance without having to stop and rest. Difficulty using steps stairs. Greatly restricts my ability sleep. Neck, Chronic pain, restricted range of movement. Lower Back condition, Loss of range of movement, Constant nagging pain 24 7 with sleep deprivation.

1. During cross-examination by Mr Dube, Mr McCann was asked:

Q. And I understand from the history that you didn't look for any other work after that?

A. No. Just the frustration of life, the injuries and things, the back, the knees, the other stuff here. Just sort of it just wore me out. The journey from Ferny Grove to Archerfield, that's a bit of a commute each day...it can be between an hour and two hours depending on how it goes, and they're pretty long days.

Q. So you could have been doing up to 4 hours a day of just travel?

A. Yeah exactly. And they expected me to be out on the road from time to time to do safety audits and that was just getting hard to do as well.

Q. Did you give any thought to employment opportunities somewhere closer to where you lived?

A. Oh, look, I was just, I was pretty busted up. As I said when I retired from the Army I was busted up and then and just to get another role anyway, I was lucky to get in a role that I could use my expertise in, I was just happy to be doing something outside the Army. And it's not only just the physical aspects is the fact that I take inflammatories. I have, you know, I take Panadol Forte, a lot of other things to mask the injuries to try and get through the day.

Q. So from February of last year, if put in there at the time you finish work that in addition to your left knee, you've said my right knee?

A. The right knee has been an issue for a long time. It's 21 years in the Army. I had these injuries and I learned to live with them.

1. Dr Ki Douglas, a consultant occupational physician, conducted a detailed examination of the T-documents, summonsed documents from the Everton Plaza Medical Centre and Gilbarco to prepare a written report dated 17 April 2024. Dr Douglas did not conduct a clinical examination as Mr McCann did not agree to one, as was his right.
2. Dr Douglas in her report, relevantly states:17

Mr McCann has applied for an increase in his disability pension due to his accepted conditions of:

Torn posterior cruciate ligaments in the right knee (11 September 1989), Bilateral sensorineural hearing loss (7 August 1996),

Ligamentous strain of the cervical region (7 August 1996), Ligamentous strain of right foot (7 August 1996),

Non-melanotic malignant neoplasm of the skin of the face (14 January 2002).

Mr McCann is now aged 67 years. He is a former fitter in the Australian Army where he was employed from 1977 until 1998. He subsequently continued in his trade and was last employed by Gilbarco Australia. His stated occupation was Workshop Supervisor and Branch Manager until his retirement of 28 September 2018. His retirement followed surgery for a left knee replacement on 24 April 2018. He was also being treated for back pain at the time, as noted by Dr Kevin O'Dempsey GP on 20 September 2018.

Mr McCann has chronic conditions affecting his musculoskeletal system which affect his mobility and the range of motion in his joints. These cause chronic pain for which he needs regular treatment including physiotherapy and chiropractic treatment, and medication including opioid medication. He has had four surgeries to the left knee and one surgery to the right knee. The right knee condition of torn posterior cruciate ligament has developed into significant osteoarthritis which is a known complication of this condition; however, I note that osteoarthritis of the right knee is not an accepted condition. Mr McCann's low back pain significantly limits his activities of daily living and his standing tolerance, which was noted by his treating GP, Dr Lex Bilson in the impairment assessment report of 2004. Mr McCann was assessed as having severe pain in any joint or combination of joints, that is always present at rest but which does not respond adequately to medication or to therapeutic measures and which regularly interferes with sleep.

The main issues impacting work are limited mobility due to left knee replacement and right knee arthritis and severe low back pain requiring regular treatment and medication. The impact of these conditions on work capacity are summarised in Table 1 and the results of confirmatory radiology and other tests are listed in Table 2 below.

Mr McCann took time off work to have left knee replacement surgery on 24 April 2018. A handwritten note dated 21 August 2018 signalled Mr McCann's intention to retire on 28 September 2018. On 20 September 2018, his GP, Dr Kevin O'Dempsey recorded that Mr McCann was given a medical certificate for the period 20 to 21 September 2018, had low back pain and wished to be referred to a chiropractor and was retiring in a week. His main GP, Dr Andrew Springfield notes in letters to the Department of Veterans Affairs on 16 January 2024 reported that Mr McCann has "quite significant orthopaedic problems of knees and spine around 2018. He has advised me he retired due to these pains from a sedentary well paid job. In my opinion the osteoarthritis symptoms he had would have precluded working at the time and forced his retirement. He certainly could not work 8 hrs a week due to his accepted disability alone. This condition caused him to cease work and still prevents him from seeking employment."

1. Dr Douglas opines that Mr McCann's capacity for continued employment as a trade qualified fitter, supervisor, and branch manager is that:18

On the balance of probabilities, it is unlikely that Mr McCann will return to full-time work. He has chronic musculoskeletal conditions resulting in pain for which he is prescribed analgesic medication, noting that cannabis and Panadeine forte affect concentration, slow reaction times and result in positive drug tests. This is incompatible with working in a manufacturing environment where there is machinery and moving vehicles.

On the balance of probabilities, it is unlikely that Mr McCann can work part-time and this would be due to his chronic musculoskeletal pain and side effects of medication, noting that cannabis and Panadeine forte affect concentration, slow reaction times and result in positive drug tests. This is incompatible with working in a manufacturing environment where there is machinery and moving vehicles.

In my opinion, Mr McCann is not capable of working in his substantive role for 8 hours each week if that role involves being on a manufacturing site.

As above. The incapacity for work is due to Mr McCann's accepted musculoskeletal conditions and the treatment of chronic pain arising from those conditions that preclude him working in his substantive role.

1. As to whether any non VEA-accepted conditions prevent Mr McCann to continue to work, Dr Douglas opines:19

The non-war caused conditions and their impact on work capacity are listed in Table 1. These include skin cancers elsewhere on his body and shoulder pain which has only been a complaint since about May 2020. They have minimal impact on work capacity unless Mr McCann's job involves repetitively lifting heavy items overhead, which I do not believe to be the case.

1. In oral evidence Dr Douglas clarified the omission of right knee osteoarthritis from Table 1 in her report and stated that condition would have the same effect on Mr Harris's capacity to work as the left knee osteoarthritis listed, namely: avoiding kneeling, squatting, walking

on uneven ground, prolonged standing and walking; using handrail on stairs; and suitable for sedentary duties, office-based with level entry and parking on site.20

1. On 24 June 2020, Dr Springfield, a general practitioner, noted that imaging showed Mr McCann had osteoarthritis of neck, lumbar spine, and right knee.21
2. In an incapacity assessment dated 28 July 2020, Dr Springfield opined that Mr McCann's knees and lower back caused 80% of his inability to work, with neck 10% and hearing loss/vertigo the remaining 10%.22
3. In an impairment assessment dated 29 September 2022, Dr Springfield opined that in respect to Mr McCann's lower limb conditions, his right knee was 75% and the left knee 25%. He thought Mr McCann would require a total knee replacement of his right knee in the future, perhaps next year.23
4. On 16 January 2024, Dr Douglas opined in a letter to the Department of Veterans' Affairs that:24

James presented for review. His chart shows he has quite significant orthopaedic problems of knees and spine around 2018. He has advised me he retired due to these pains from a sedentary well paid job. In my opinion the osteoarthritis symptoms he had would have precluded working at the time and forced his retirement. He certainly could not work 8 hrs a week due to his accepted disability alone. This condition caused him to cease work and still prevents him from seeking employment.

1. At the hearing, Dr Springfield opined that the meniscal tear in Mr McCann's right knee had caused osteoarthritis and had a significant impact on his capacity to work. He went on to say that the tear of the cruciate ligament was many years ago and most of Mr McCann's pain was from osteoarthritis and this was having a major impact on his capacity to work.

1. On 1 May 2003, Dr Khurasandi, an orthopaedic surgeon, in a written report refers to an X- Ray of Mr McCann's right knee showing early changes of osteoarthritis in the medial

compartment and patellofemoral compartments of the joint with a tripartite patella and opines that Mr McCann's right knee has ongoing symptoms of degeneration and some instability due to a previously injured and reconstructed posterior cruciate ligament.25

1. On 19 June 2020, Doctor Gus McKenzie, a radiologist, opines that an X-Ray of Mr McCann's shows, "there is tricompartmental degeneration at the right knee with joint space loss, subchondral sclerosis and osteophytic lipping. A small suprapatellar knee joint effusion is noted." 26

1. Mr Cullen contends that in respect of Mr McCann's right knee:27

The condition of Osteoarthritis of the Right Knee. This condition is not mentioned under Table 1 but has been mentioned in the Respondent's Facts, Issues and Contentions at Para

4.11. The condition of Osteoarthritis is in the same body part as his Accepted Right Knee Condition of Torn Posterior Cruciate Ligament. This has developed into significant osteoarthritis. The Applicant has treatment for his Right Knee and an application for Osteoarthritis of the Right Knee would not attract any compensation as it is part of the same body part as both lower limbs are classified as one under GARP. Given that scenario it would be a pointless exercise. The condition of Osteoarthritis of the Right Knee is a sequalae of an accepted condition and the medication he takes mainly for his back pain and Left Knee would mask any disability from Osteoarthritis of the Right Knee. Maybe if the Osteoarthritis of the Knee was a stand-alone condition, it may have an impact on walking, but then we have to consider his Accepted Condition of the Right Foot which would impact on walking and standing for periods exceeding 30 minutes. Given the above, I believe that the condition of Osteoarthritis can be ruled out of impacting on the Alone Factor in this case. He has two (2) conditions of his Right Leg which are accepted under the VEA and a condition which is a sequalae of possibly both accepted conditions.

1. The crux of Mr McCann's contention, as the Tribunal was able to discern, was that the right knee osteoarthritis is not a separate compensable injury under the 'Guide to the Assessment of Rates of Veterans' Pensions' (GARP), but is a sequela injury to Mr McCann's accepted condition of torn posterior cruciate ligament, which should be

27 Applicant's Statement of Facts, Issues and Contentions ('SFIC'), p7.

considered as being included in that accepted condition and therefore he should be entitled to 'Special Rate' as his accepted conditions alone prevent him from remunerative work.

1. The Commission accepts that Mr McCann: 28

(a) Had not yet turned 65 when the claim was made.

(b) His degree of incapacity has been determined as at least 70%.

(c) He is incapable of working more than 8 hours per week due to his medical conditions (including the non VEA-accepted condition).

(a) Contends that Mr McCann is unable to meet the 'alone' test because of his right knee osteoarthritis and resultant chronic pain.

(b) Relying on Dr Douglas, states that 'osteoarthritis is a known complication of the accepted torn posterior cruciate ligaments of the right knee, however, to date, this condition is not an accepted war-caused injury or war-caused disease.'29

(c) Contends that Repatriation Medical Authorities' Statement of Principles concerning osteoarthritis - Instrument no. 62 of 2017 (Osteoarthritis SoP) and Statement of Principles concerning internal derangement of the knee - Instrument no. 8 of 2019 (Internal Derangement SoP) have the effect that for the purposes of the VEA, Mr McCann's torn ligament and osteoarthritis are different injuries and that each must be accepted to satisfy the requirements of ss 23 and 24 of the VEA.

(d) Contends that the Tribunal must consider all sources of incapacity during the assessment period.30

(e) Contends that if Mr McCann was able to have his right knee osteoarthritis accepted (after a new claim under s 14), then the date of effect of any pension payable would not be backdated to the date of effect in the present application but would be determined under s 20 of the VEA and will be on some date in the future.

29 Ibid, at [4.21] and Banovich v Repatriation Commission [1986] FCA 397.

(f) States that as Mr McCann is now over 65, if his osteoarthritis is accepted in the future, then s 24(2A) would apply and he would not meet the threshold requirement of undertaking paid work after 65.

(g) Contends that Mr McCann is unable to rely on the 'ameliorating' provisions of ss 23(3) and 24(2) of the VEA because 'there is no evidence to support a conclusion that the applicant has made any attempts to engage in remunerative work in the assessment period... he would be continuing to engage in remunerative work but for his war caused incapacity nor that the war caused incapacity is the substantial cause of his inability to obtain remunerative work'.31

1. The Tribunal must apply the factual findings it makes to the conditions in ss 23 and 24 of the VEA to make its determination as to whether Mr McCann is entitled to either 'Intermediate Rate' or 'Special Rate'. In Smith, Rares J stated at [26]:

The conditions specified in each of ss 23 and 24 are bedevilled with bewildering complexity. Regrettably the fog of the drafting style of this, like many Commonwealth Acts, has created a nearly impenetrable shroud over the meaning that the Court is expected to attribute to the intention of the Parliament. The cost to the community of this obscurity must be enormous. Two days of hearing by this Court were largely devoted to an attempt to make sense of key entitlements provided in the Act to persons who have been injured in war conditions in service of this nation. Perhaps it suffices to say that s 23 commences on page 187 of the first volume of the latest reprint of the Act.

1. There is little factual dispute between the parties in this matter. The evidence in dispute, if it even can be characterised as that, is whether the VEA-accepted condition of 'torn posterior cruciate ligaments right knee' (torn ligament) is distinguishable from the non VEA-accepted condition of 'right knee osteoarthritis' as to satisfy the 'alone' test.

1. The assessment period is not in contention. The Tribunal determines pursuant to s 19(9) of the VEA the assessment period commenced on 8 July 2020 being the date Mr McCann's claim for an increase in pension was received by the Commission and ends upon final determination of the matter.

General Eligibility Criteria - Intermediate and Special Rate

1. The VEA provides three general eligibility criteria for the application of ss 23 and 24 of the VEA; these are factual matters that are non-contentious and can be dealt with shortly.
2. The Tribunal is satisfied, based on the evidence before it, that Mr McCann:

(a) made a valid claim for a pension under s 15 of the VEA, therefore he met the requirements of ss 23(1)(aa) and 24(1)(aa) of the VEA.

(b) had not yet turned 65 when the claim was made, therefore he met the requirements of ss 23(1)(aab) and 24(1)(aab) of the VEA.

(c) met the requirements of ss 23(1)(a) and 24(1)(a) of the VEA as he had received a determination that his degree of incapacity from his war-caused injuries or disease or both, is greater than 70%.

1. In Smith, Buchanan J described at [47] that when ss 24(1)(b) and (c) are read together they:

state a composite test containing a series of conditions. First, s 24(1)(b) requires that a veteran be rendered, by the war-related incapacity alone, incapable of working more than eight hours per week. Secondly, s 24(1)(c) requires that the veteran be prevented, by that incapacity alone (i.e. not for other reasons) from continuing earlier remunerative work. Thirdly, s 24(1)(c) requires that prevention for that reason from continuing that work be the cause of a loss of earnings. Fourthly, s 24(1)(c) requires that the loss of earnings would not be suffered but for the incapacity.

1. The consideration of the 'alone' test has been a subject of much contention in 'Special Rate' cases. In Repatriation Commission v Richmond [2014] FCAFC 124 (Richmond) at [65], Middleton, Murphy and Rangiah JJ stated:

We respectfully agree with the learned primary judge's view (at [108]) where her Honour said:

The authorities in my view establish that if there is a non war-caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing, the "alone" test will not be satisfied.

1. The Commission contends that the non VEA-accepted condition of right knee osteoarthritis is a medical condition that precludes Mr McCann being abl_e_ to satisfy the 'alone' test. In

support of this contention, reliance is placed on the opinion of Dr Douglas and Dr Springfield, that the right knee osteoarthritis is the natural development of the VEA-accepted condition of torn ligament from 1989, and that his osteoarthritis is substantially contributing to Mr McCann's pain and incapacity to work.

1. Mr McCann contends that his right knee osteoarthritis is a sequela to the tear to his torn ligament, it is the same condition under the GARP and is indistinguishable from the VEA accepted condition, and attracts no further compensation, and thus Mr McCann satisfies the 'alone' test.
2. This contention that the torn ligament and osteoarthritis are indistinguishable is not sustainable in the face of the Osteoarthritis SoP and the Internal Derangement SoP. They each describe different injuries with distinct clinical factors to be accepted under the VEA. Mr McCann's torn ligament is squarely within the Internal Derangement SoP and his right knee osteoarthritis within the Osteoarthritis SoP. Thus, they are separate conditions for the purposes of the VEA.
3. It is true in Mr McCann's circumstances that he would, absent ss 23 and 24 of the VEA, not attract any further compensation for his osteoarthritis as a discrete condition as he is already at 100% of the 'General Rate'. However, he would be entitled for medical expenses to be covered if liability for the osteoarthritis condition was accepted - for example, where a total knee replacement was medically necessary.
4. There is no controversy on the medical evidence before the Tribunal that Mr McCann's non VEA-accepted condition contributes to his incapacity to work, nor that his right knee osteoarthritis is a sequela condition to his VEA-accepted condition of torn ligament. Further, the unequivocal medical evidence is that it is the right knee osteoarthritis that contributes to Mr McCann's incapacity to work, not the pre-existing torn ligament.
5. Mr Cullen advised the Tribunal that Mr McCann had not applied to the DVA for his right knee osteoarthritis to be accepted under the VEA. The reason given was stated to be a concern about the time taken by the DVA to determine applications and not putting Mr McCann to the stress of making such an application.
6. Regrettably, that decision not to apply to have Mr McCann's right knee osteoarthritis accepted has significant consequences to the present proceedings. That is because the jurisdiction of the Tribunal is limited to the decision under review. That decision is in respect to an application by Mr McCann for an increase in pension (s 15), not for acceptance of osteoarthritis as an accepted VEA condition.
7. In Owen v Repatriation Commission (1995) 38 ALD 24132 (Owen), Finn J, stated at 249:

(1) Section 24 presupposes that a determination has been made that an injury has been war- caused. Its concern in subs (1)(c) is with an effect of the incapacity resulting from that injury. The section does not permit a new determination to be made for its purposes that an injury is war-caused. Such in my view has already been held by the full court of this court on analogous provisions of the Repatriation Act 1920 (Cth) in Banovich v Repatriation Commission [1986] FCA 397; (1986) 69 ALR 395 ; 11 ALN N142.

(2) Where it is suggested a new injury is war-caused because it is causally related to, or has been contributed to by, an already determined war-caused injury, it is open to a veteran to make a claim under the Act for a determination that that new injury is in fact war-caused within the terms of the Act s 9. In other words the legislative scheme itself allows for an injury causally related to a war-caused injury to be found to be a war-caused injury. It is noteworthy in the instant case as I have earlier indicated that the applicant has in fact made such a separate claim in respect of his right shoulder injury on 15 February 1993. In this way the Act permits a veteran to add to the available war-caused injuries of which account may be taken under s 24. This may be of no little importance to a veteran where the second of two causally related injuries is the cause of the incapacity which prevents the veteran from undertaking the remunerative work that the veteran was undertaking.

(3) The wording of s 24(1)(c) in its reference to the veteran being prevented from continuing to undertake remunerative work ``by reason of incapacity from that war-caused injury ... alone'' likewise precludes a converse form of reasoning which would allow the effects of an injury which was not determined to be war-caused to be attributed wholly to an injury that was so determined merely because the two injuries could be shown to be causally related. For the purposes of s 24(1)(c) the relevant incapacity is that of the injury determined to be war-caused alone and not that as well of any causally related but not war-caused determined injury. But as I have noted in (2) above it is open to a veteran to change the character of the relevant incapacity for the purposes of the subsection by securing a distinct determination that the causally related injury as well is war-caused.

32 Followed in Husband v Repatriation Commission [2000] FCA 356; Dorsett and Repatriation Commission (Veterans' Entitlements) [2018] AATA 2241.

1. The reasoning in Owen is clear and binding. Mr McCann is unable to rely on his right knee osteoarthritis being causally linked to his VEA-accepted condition to satisfy the requirements of s 24 of the VEA.

Capacity to work no more than 8 hours per week

1. In Wright v Repatriation Commission, Hill J explained the interpretation of s 24(1)(b) of the VEA:33

goes to the nature and level of incapacity by which ability to undertake remunerative work is to be assessed. If the character and effect of the incapacity is such as to render the veteran incapable of undertaking remunerative work for a period aggregating more than eight hours per week then s 24(1)(b) is satisfied.

1. The evidence of Mr McCann's capacity to undertake remunerative work for 8 hours or more per week is not in dispute. He is unable to work for more than 8 hours due to his chronic pain from his medical conditions and the impact of his medications has in alleviating that chronic pain.

1. In Repatriation Commission v Hendy, Whitlam, Emmett and Stone JJ at [37] stated:34

The consideration of what a veteran would probably have done, absent the service disabilities, is a hypothetical exercise. The language of s 24(1)(c) of the Act directs attention to the question of whether incapacity from the relevant condition alone prevents a veteran from continuing to undertake remunerative work. The provision does not contemplate that other factors are only to be taken into account if they, of themselves, prevent the Veteran from working. The decision-maker is required to take into account any factor that plays a part or contributes to a veteran's being prevented from continuing to engage in remunerative work. If a period of time elapses after a veteran ceases remunerative work and before the commencement of the assessment period, lack of recent work experience, time out of the workforce and increasing age will be relevant for consideration under s 24(1)(c) of the Act. The decision-maker is required to consider the effect, contribution to, and relative weight to be attached to any or all of those factors during the assessment period.

33 [2005] FCA 7; (2005) 144 FCR 302 at [15].

34 [2002] FCAFC 424.

1. It is not contentious that Mr McCann ceased working in September 2018 and has not worked since.35 Mr McCann has been out of the work force for almost 7 years and the lack of recent work experience is a relevant consideration for the Tribunal.
2. Mr McCann was 64 years at the commencement of the assessment period. He is now 67 years of age. The Tribunal is reasonably satisfied that age and time out of the work force from September 2018 are barriers to Mr McCann being able to find remunerative work.36 However, they are not given significant weight due to Mr McCann's inability to satisfy the 'alone' test.

1. The Tribunal accepts the evidence of Dr Douglas and Dr Springfield that Mr McCann's right knee osteoarthritis impacts on Mr McCann's capacity to undertake remunerative work. Whilst it is almost certain that his right knee osteoarthritis is a sequala injury to his VEA- accepted condition of torn ligament, the Tribunal is reasonably satisfied that the right knee osteoarthritis is a separate medical condition, and the Tribunal does not have the power to accept it as a sequela injury to satisfy the 'alone' test.
2. The Tribunal finds that Mr McCann's non VEA-accepted Condition of right knee osteoarthritis is a contributing factor affecting Mr McCann's capacity to work. The Tribunal is reasonably satisfied that Mr McCann does not have the capacity to work for up to 8 hours per week and considers his age, lack of recent work experience, and time out of the work force as factors affecting his ability to obtain remunerative work.
3. Therefore, the Tribunal finds that s 24(1)(b) of the VEA is not satisfied and, due to its cumulative requirements, s 24(1) is not satisfied, thus Mr McCann has no entitlement to a 'Special Rate' pension.

1. As stated above, Mr McCann satisfies the general eligibility conditions for 'Intermediate Rate'.
2. Again, based on the findings by the Tribunal that Mr McCann does not satisfy the 'alone test', and due to his time out of work, lack of recent work experience, and age, Mr McCann does not meet the requirements of s 23(1) of the VEA.

36 Repatriation Commission v Richmond [2014] FCAFC.

1. The harshness of the strict requirements of the 'alone' test in eligibility for 'Intermediate Rate' or 'Special Rate' can be 'ameliorated'37 by operation of ss 23(3) and 24(2)(b) of the VEA. The distinction can be ascribed to Mr McCann being 'prevented' from continuing his employment by incapacity for war caused injuries alone to circumstances where he is not working and his incapacity by war caused injuries was the 'substantial' cause of an inability to work.38
2. As Mr McCann was not engaged in remunerative work when he applied for an increase in his disability pension, ss 23(3) and 24(2)(b) of the VEA are on the same terms, and in determining whether ss 23(1)(c) and 24(1)(c) are satisfied, three elements must be established.39
3. Applying the wording in ss 23(3) and 24(2)(b) of the VEA to Mr McCann the provision reads:

Where Mr McCann, who is less than 65 years, who has not been engaged in remunerative work satisfies the Commission that [1] he has been genuinely seeking to engage in remunerative work, that [2] he would, but for that incapacity, be continuing so to seek to engage in remunerative work and [3] that incapacity is the substantial cause of his inability to obtain remunerative work in which to engage, Mr McCann shall be treated as having been prevented, by reason of that incapacity, from continuing to undertake remunerative work that Mr McCann was undertaking

1. Firstly, on whether Mr McCann has been genuinely seeking to engage in remunerative work. The evidence is unequivocal that Mr McCann has not been seeking to apply for work during the assessment period. His evidence was he retired in September 2018 as he was incapable of continuing to work but otherwise, he would have continued in his well-paid position. The medical evidence supports this proposition.
2. In Leane v Repatriation Commission (Leane), Emmet, Conti and Selway JJ at [29] stated:40

It may be accepted that, in the ordinary course, a person in the position of the Veteran would have difficulty in establishing that he or she was honestly trying to engage in remunerative work unless there were some 'objective signs of active pursuit of remunerative work'. However,

37 See Magill v Repatriation Commission [2002] FCA 244 at [8].

38 See Repatriation Commission v Woodall [2015] FCA 1267 at [58].

39 See Smith v Repatriation Commission [2014] FCAFC 53 at 456.

40 [2004] FCAFC 83.

it would be wrong to turn the practical issue of how a person might establish his or her case into some legal pre-condition. Assume, for example, that a claimant satisfied the Tribunal that:

• he or she honestly wished to engage in remunerative work;
• he or she had made a reasonable assessment of his or her disabilities;
• he or she had reasonably concluded that he or she could only be employed in a particular type of work;
• he or she was checking employment advertisements on the look out for such employment; but
• he or she had not yet identified any such employment prospects.

(a) Is satisfied that Mr McCann honestly wished to engage in remunerative work based on his oral evidence, evidence of his remuneration at Gilbarco, and his significant work history.

(b) Is satisfied that Mr McCann made a reasonable assessment of his disabilities in respect to his capacity to a role that he had worked in for almost 20 years.

(c) Is satisfied that it was reasonable for Mr McCann to conclude that he could only be employed in the type of roles he had been employed for almost 40 years.

(d) Is not satisfied that Mr McCann was looking for such employment as his evidence was that he was not.

1. The Tribunal is reasonably satisfied that Mr McCann has not satisfied the first element under ss 23(3) and 24(2)(b) of the VEA and thus is not required to further consider the ameliorating provision.41
2. In any event, the Tribunal is satisfied that Mr McCann's right knee osteoarthritis is a substantial cause of his inability to obtain remunerative work, and he is therefore not able to fall within the ameliorating provisions in ss 23 and 24 of the VEA.42
3. The Tribunal finds that Mr McCann is not entitled to a s 23 'Intermediate Rate' or s 24 'Special Rate' disability pension under the VEA.
4. For completeness, the Tribunal finds that Mr McCann is not entitled to the 'Extreme Disablement Adjustment' under the VEA as his lifestyle rating is less than 6.

42 See Fox v Repatriation Commission [1997] FCA 176; (1997) 45 ALD 317

1. The Tribunal affirms the decision under review.

Application for review, dated 6 September 2023 (T2)

Application for Increase in Disability Pension, dated 16 August 2022 (T12)

Application for Review, dated 15 December 2022 (T20)

Request for report from Dr Ki Douglas, dated 9 January 2025 (Hearing Book R1)

Report of Dr Douglas, dated 15 January 2025 (Hearing Book R2)

Response to request for medical information: Dr Springfield (with attachments) (T10)

Department of Veterans' Affairs - Service Record of Mr McCann, dated 17 January 2024

Letter from Gilbarco Australia Pty Ltd, dated 23 August 2018 (T8 p38)

Impairment Assessment, dated 29 September 2022 (T17 p115)

Report of Dr Khursandi, dated 17 August (T27 p202)

Report of Dr Andrew Springfield GP, dated 16 January 2004 (Hearing Book A1)

Statement by Applicant, dated 1 February 2024 (Hearing Book A2)