McDonald v Director-General of Social Security

24. (1) Subject to this Act, a person above the age of 16 years who 1s not receiving an age pension and -

(a) is permanently incapacitated for work or is permanently blind; and

(b) is residing in, and is physically present in, Australia on the date on which he lodges his claim for a pension, shall be qualified to receive an invalid pension."

On 1 December 1980 the appellant was notified that his application had been rejected because the degree of his incapacity was less than that required to qualify for an invalid pension. He appealed, on 5 January 1981, to the Social Security Appeals Tribunal but it was not until 20 August 1982 that this Tribunal notified 1ts decision to dismiss the appeal. The Director-General notified his affirmation of the rejection on 16 September 1982. The appellant lodged his appeal to the Administrative Appeals Tribunal on 7 October 1982 but 1t was not heard until 26 September 1983. On 25 October 1983 the Tribunal, constituted by a Senior Member, announced its decision to dismiss the appeal, for reasons then given. On 19 November 1983 a Notice of Appeal was filed in this Court but nothing further was done for nine months. On 21 August 1984 a Draft Index of Appeal

Papers was lodged. On 2 November 1984 tne matter was mentioned

and, shortly thereafter, 4 March 1985 was fixed as the hearing

date. Four and one half years has now elapsed since the application was lodged but, regrettably, the tortuous course is not yet run. I have come to the conclusion that the decision of the Administrative Appeals Tribunal is erroneous in law and that I must refer the matter back to that Tribunal, from which it

emerged 18 months ago. I desire to say that I regard the delays

which have occurred in connection with this matter, though apparently usual, as unacceptable and reflecting poorly on those responsible. The prejudice caused by such delay in granting a pension to a person ultimately held entitled is obvious, and this is so even if sickness benefits have been paid in the meantime. The prejudice suffered by a person ultimately held not to be entitled is less apparent but may nonetheless be real. The fact that the claim remains unresolved is likely to generate in the applicant and in members of his family a degree of anxiety and a preoccupation with symptoms which may be directly opposed to the best interests, medically and psychologically of the applicant and of his family. It appears to me to be important that the Department establish a procedure to monitor the progress of all

disputed claims and to take steps to ensure early hearings at

The appellant was born in 1929 in Cyprus. He migrated to Australia at the age of 18 years but despite his long residence in this country his English is poor. He gave evidence before the Tribunal with the assistance of an interpreter. Mr

Adamou trained as a carpenter in Cyprus but he has no formal

qualifications in that trade. In Australia he has worked as a carpenter. His last job, from about 1966 to 1979, was with the New South Wales railways; under its various manifestations. During the first two years of that employment he worked ina building cutting timbers, but for the remainder of the time he worked outside, erecting formwork for the placement of concrete in bridges and tunnels. He said that the timber was very heavy to carry, being the length of the Tribunal hearing room,' but he had "plenty of help". About 1978 he had problems holding the hammer, he had pain in his right hand and eventually he gave up work. At the hearing before the Tribunal it was common ground that the appellant suffered some organic disabilities; but their extent was disputed. In a finding which is not disputed in this Court the learned Senior Member found that the "organic disabilities have been and are those of a man of his years with degenerative changes common to his age, and that they are sufficient to cause varying degrees of discomfort in various

disability. The Tribunal expressed its findings on the extent of

"The assessment of the degree of non-organic disability presents difficulty in this as in so many of the Tribunal's cases. In anxiously studying the evidence, one has in the background the statements made in so many of these cases (as in this) which emphasize the special nature of the attitudinal response to injury, sickness and life's

difficulties, developed in persons of some ethnic backgrounds (such as Mr. Adamou's) as contrasted with that of persons from other cultural environments. I must do the best I can with the differing views of Drs. Rey and Greenberg on the one hand stating that psychiatric treatment of the applicant is required, and of Dr. Gatenby on the other (the latter having given evidence and impressed me with his moderation in doing so), stating no such treatment is required. I consider the probabilities to be that Mr. Adamou's state of depression lies between the two descriptions given of it, a little more than the "mild depression" of Dr. Gatenby's view, and somewhat less than the "severely incapacitated" "markedly depressed" of the picture given by Drs. Rey and Greenberg."

The reasoning of the Tribunal was set out in para 21 of

the decision which, omitting a concluding comment, read as

"I consider it to be established that the applicant lost his desire to go on working, because of the ageing discomforts he found himself encompassing and because inside work was not available for him; and consequently found himself being progressively miserable. He decided he didn't want to work and indeed can't work, and that he should be entitled to the Invalid Pension. With that fixation of

ideas he has been concentrating on his symptoms and developed a depression of

thought unlikely that he will try to gain work or that he would hold it if obtained

while in such a state of fixation as to motivation and unhappiness with his life. However, the psychiatric evidence suggests strongly, and I accept it to be the fact, assuming the extent of depression to he nearer that of "marked" than "mild", that there are a number of avenues of psychotopic medication and other psychiatric therapy open

to Mr. Adamou of which he should avail himself. This factor leads me to the conclusion that it could not be found that the applicant's incapacity, such as it is, may be considered permanent in the sense of likely to continue indeterminately at the same or a similar level.

In any case I am satisifed that neither alone nor in combination are Mr. Adamou's physical

him incapacitated for work for which he would be by his experience attuned, subject to his

a very heavy nature. I form the view that he 1s understandably disinclined because of his

present disabilities, but not unable because of them, to engage in remunerative employment; and that unhappily in the present economic climate he may come to qualify for unemployment benefits; but as expressed above, that he does not come within the Statutory qualification for an Invalid

Pension." A number of grounds of appeal have been argued but they

Tay be addressed under two headings: permanency and incapacity.

The Tribunal found as a fact - assuming the level of the appellant's depression to be nearer "marked" than "mild" - "that there are a number of avenues of psychotopic medication and other psychiatric therapy open to Mr. Adamou of which he should avail

himself". The Tribunal did not identify the evidence upon which this funding was based. Counsel for the appellant submits that there was in fact no such evidence before the Tribunal and that, even if there were, it would have been erroneous in law for the

Tribunal to use that evidence to reach the conclusion that the

appellant's incapacity could not be considered permanent.

The Tribunal had before it the opinions of three psychiatrists, Drs Rey, Greenberg and Gatenby. As counsel for the respondent concedes, only Dr Rey spoke of the possibility of new avenues of treatment and then only in theoretical terms. In

"Apparentiy Mr. Adamou has been treated in the past with a tricyclic antidepressant, Doxepin (Sinequam) but with a dose of 25 mg at which level this drug has no antidepressant effect. He is now taking a monoamine oxidase inhibitor (Parnate, Tranylcypromine) also at below therapeutic doses because of side effects. That means that it is not know whether his depression would improve with appropriate treatment as it seems that an adequate trial with antidepressant medication has not heen carried out yet.

The prognosis of his depression will largely depend on the response to appropriate treatment. The lack of symptoms of melancholia and its chronicity, however, significantly reduce the chances of a response to biological therapy."

I do not think 1t may properly be said that this evidence suggests strongly, or at all, that there are a number of avenues of psychotopic medication and other psychiatric therapy open to the appellant. The passage merely indicates that, because no adequate trial with antidepressant medication had been carried out, Dr Rey could not say whether the depression would improve witih appropriate treatment. It leaves open a possibility, nothing more. There is nothing in the statement to found a conclusion that new treatment is likely to effect an

improvement in the level of depression. It is significant that

Dr Rey went on to state that "it is unlikely that he will be able

to obtain a skilled job or a job which would not tax unduly his scarce physical and emotional resources, and he is unlikely to be

Even if there had been positive evidence of a prospect of improvement under new medication or therapy, it would not follow that the present incapacity, if of the requisite degree,

Director-General of Society Security (1984) 1 FCR 354 a Full Court of this Court had to consider the concept of permanency embodied in ss. 23 and 24 of the Act. At pp 359-360, Woodward J contrasted the provision in s.108(1)(c) of the Act for payment of a sickness benefit to a person suffering an incapacity for work by reason of sickness or accident, being an incapacity of a temporary nature, with the provision made by ss. 23 and 24 for an

invalid pension upon permanent incapacity. He went on:

"Since the incapacity referred to is not mere physical incapacity, but incapacity for work, factors such as physical and mental health, skills, training, qualifications and the state of the labour market will all be relevant in determining both the degree of incapacity and its likely duration. The work referred to must be work generally and not restricted to the person's normal occupation.

The vital contrast between temporary and permanent incapacity must be based upon an assessment of future prospects at the time the decision is made. It is not inconsistent with the notion of permanent incapacity that the pensioner's position should be, reviewed from time to time. Unexpected improvement in the person's condition, advances in medical

science, the achievement of fresh skills, or even changes in the labour market, could bring to an end an incapacity which had been thought to be permanent.

In my view the true test of a permanent, as distinct from temporary, incapacity is whether in the light of the available evidence, it is more likely than not that the incapacity will persist in the foreseeable future."

I do not think that the test applied in this case by the Tribunal - "likely to continue indeterminately at the same or similar level" - is different in effect from that enunciated by Woodward J but I think that the Tribunal overlooked the significance of that test in relation to further treatment. A present level of incapacity may be likely to persist in the foreseeable future - or indeterminately - notwithstanding that

there 18 a possibility of improvement, whether because of some

new form of treatment or otherwise. A possibility of one situation does not negative a probability of the opposite position. Only if it can be said that there exists a probability, as distinct from a possibility, that there will be such a degree of improvement in the future that the incapacity will fall below the stipulated level may it be said that the incapacity 1s not "permanent", that is temporary. As I have said, the comment by Dr Rey, at its highest, referred to no more than a possibility of improvement as a result of new treatment. The Tribunal fell into legal error in treating that possibility

Counsel for the appellant criticized the Tribunal's decision in relation to incapacity for failing to make adequate findings on two essential matters. It was said that the Tribunal should first have made a finding as to the types of employment which the appellant was able to perform, having regard to his physical and psychological disabilities, and then should have considered the likelihood of his obtaining such employment. He relied upon the decision of the Tribunal in Re Panke and

Director-General of Social Services (1981) 4 ALD 179 and the

subsequent cases - which I collected in McBay v Director-General ef Social Services (15 February 1985, not reported) - in which that decision has been applied. In McBay I attempted to summarize the reasoning in Panke. I need not repeat what I then said. In the present case, as in McBay, counsel for the Director-General expressly declined to challenge the correctness of Panke and I therefore, again as in McBay, proceed on the basis

that Panke represents a correct statement of the law.

Panke requires a two stage process of evaluation of

incapacity; first an assessment in medical terms of the extent of an applicant's disability, and secondly, a determination of the extent to which that disability impairs the ability of the applicant to engage in employment. In considering that second

matter attention must be paid to the availability of employment

il. to a person in the position of the applicant, that is having not only his disabilities but also his other relevant characteristics

In the present case the Tribunal expressed conclusions about the extent of the appellant's disabilities, both organic and non-organic. It then proceeded to a conclusion as to the extent to which that disability impaired the ability of Mr Adamou to engage in employment. It found that the disability was not such as to render him incapacitated for carpentry work "subject to his being no longer suited for labouring tasks of a very heavy

The Tribunal did not go on to consider the ramifications of this qualification, to ask whether there would be likely to be work available for Mr Adamou that did not require labouring tasks of a very heavy nature. The evidence does not suggest that Mr Adamou had the expertise or experience to engage in fine carpentry work not involving heavy lifting, such as cabinet making or the finishing of the interiors of rooms. His experience with the railways had been in heavy duty, industrial style carpentry involving large pieces of timber and outdoor work. The evidence is scanty but it does convey the impression that this work involved a considerable physical effort and

labouring tasks of a heavy nature. There is nothing to indicate

that work without heavy labouring tasks would have been available, with the railways or otherwise, for a person with Mr Adamou's characteristics. At age 54 and with little English, the appellant would not have been well placed to compete for such suitable carpentry jobs as might become available. Perhaps the statement by the Tribunal "that unhappily in the present economic climate he may come to qualify for unemployment benefits" suggests that the learned Senior Member was himself sceptical

In fairness to the Tribunal, it should be said that little assistance was given to it in relation to work prospects. Neither party led evidence as to the job opportunities which would be available to a person in the appellant's position. Nevertheless it was the duty of the Tribunal to address this matter, doing the best it could upon the material which it had. If this material was thought to be so inadequate as to provide no proper basis for a conclusion, the Tribunal could have adjourned the hearing for the purpose of having the parties place relevant

evidence before it: see s.33(1)(a) of the Administrative Appeals

Tribunal Act 1975. Subject to providing to the parties an opportunity of dealing with any information which it obtained, the Tribunal could have directly informed itself upon the matter:

see s.33(1)(c). However the problem was to be managed it was

encumbent upon the Tribunal to make a finding on this question. Its failure to do so constitutes an error of law in respect of

Counsel for the appellant argued that, if his submissions were accepted, the Court should direct the issue of a pension. I took that course in McBay but only because of my conclusion in that case that, upon the findings of the Tribunal read with the uncontested evidence, Mr McBay had been entitled before the Tribunal, as a matter of law, to a determination in his favour. The position in the present case is different. The Tribunal's conclusion is, in my opinion, erroneous in law but it cannot be said that an opposite conclusion, a conclusion

favourable to the appellant, is the only conclusion which the

Tribunal might, without error of law, have reached. The findings of fact necessary to establish that position have not been made. Whether they will' ever be made is a matter which only the

Section 44(5) of the Administrative Appeals Tribunal Act permits the Court to remit a matter to the Tribunal to be heard and decided again, either with or without the hearing of further evidence. Having regard both to the inadequacy of the evidence at the original hearing and the time which has since elapsed, it is appropriate to direct that the hearing be with such further evidence as may be desired to be placed before the Tribunal by

either party. Having regard to the time which has already

elapsed in respect of this pension application, I express the hope that the Tribunal will be able to expedite the re-hearing

I certify that this and the Mirfeen (!3 preceding pages are a true copy of the Reasons for Judgement herein of his Honour Mr Justice Wilcox.