3. The Veterans' Entitlements Act 1986 (Cth) ("the Act") was assented to on 19 May 1986. That Act repealed the Repatriation Act and by force of s.17 of the Veterans' Entitlements (Transitional Provisions & Consequential Amendments) Act the applicant's claim, having been made before the commencement of the Veterans' Entitlements Act 1986 falls to be dealt with as if made under the Veterans' Entitlements Act.

4. The applicant claimed that his carcinoma was a "war-caused disease" within the meaning of that expression in s.9(1)(b) of the Act which provides that "a disease contracted by a veteran shall be taken to be a war-caused disease, if ...

"(b) the... disease contracted, by the veteran

arose out of, or was attributable to, any

eligible war service rendered by the veteran;"

5. Relevant to the issues before me are ss.119 and 120 of the Act which provide relevantly:

"119. (1) In considering, hearing or determining,

and in making a decision in relation to -

the Commission -

(f) is not bound to act in a formal manner and is

not bound by any rules of evidence, but may

inform itself on any matter in such manner as

it thinks just;

(g) shall act according to substantial justice and

the substantial merits of the case, without

regard to legal form and technicalities; and

(h) without limiting the generality of the

foregoing, shall take into account any

difficulties that, for any reason, lie in the

way of ascertaining the existence of any fact,

matter, cause or circumstance, including any

reason attributable to -

(i) the effects of the passage of time,

including the effect of the passage of

time on the availability of witnesses;

and

(ii) the absence of, or a deficiency in,

relevant official records, including an

absence or deficiency resulting from the

fact that an occurrence that happened

during the service of a veteran, or of

a member of the Defence Force or of a

Peacekeeping Force, as defined by

sub-section 68(1), was not reported to

the appropriate authorities.

...

120. (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.

...

(3) In applying sub-section (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.

...

(5) Nothing in the provisions of this

section, or in any other provision of this Act,

shall entitle the Commission to presume that -

...

(b) a disease contracted by a person is a

war-caused disease or a defence-caused

disease; ...

(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."

6. Before the Tribunal the applicant advanced three hypotheses which it was claimed were reasonable hypotheses for the purposes of s.120(3) of the Act. These hypotheses as summarised by Mr. McMahon at paragraph 23 of his Reasons for Decision were as follows:

"The first was that through a combination of diet,

stress and dehydration suffered by the applicant

during the course of his operational service, he

became chronically constipated and that this

constipation directly caused the colon cancern.

The second hypothesis was that the condition of

constipation masked the existence of polyps, thus

delaying diagnosis and treatment of the cancer.

The third hypothesis was that the applicant endured

an inferior low fibre diet during operational

service and that this diet caused the cancer."

7. Each of the hypotheses was said, before the Tribunal, to be based upon reports given by a Dr. Payne who gave evidence before the Tribunal.

8. The Tribunal in rejecting the application was of the opinion that none of the three hypotheses were "reasonable" within the meaning of s.120(3). No challenge is made in respect of the Tribunal's findings so far as those findings relate to the first and third hypotheses.

9. In the course of his reasons, Mr. McMahon referred to what had been said by Beaumont J. at first instance in Repatriation Commission v. Webb (1987) 76 ALR 131 at p 135:

"The point sought to be achieved by the

introduction into s.120 of the notion of a

'reasonable' hypothesis is the distinction between

a theory that is rationally based, on the one hand,

and an opinion or view that is irrational, absurd

or ridiculous, on the other. It is possible,

especially as here, where the aetiology of the

disease is unknown, to have more than one

reasonable hypothesis advanced which suggest

different causes of the disease. The exercise is

not one of balancing or weighing the respective

merits of a range of professional opinions.

Rather, it is a case of determining whether the

particular theory has a rational foundation. It is

not a question of considering the probabilities or

even the possibilities."

10. There is no disagreement between the parties as to the correctness of this statement of principle. However, Mr. McMahon then continued in paragraph 35 of his reasons:

"His Honour's decision was overturned on appeal but

not on the grounds that he had misconceived the

correct legal principles to be applied.

Nevertheless, there remains a requirement that an

hypothesis must have not only the negative

qualities of not being irrational, absurd or

ridiculous; it must also have the positive quality

of being 'reasonable'. If there is no evidence to

support it, it can hardly be said to be based upon

reason or, in other words, to be reasonable."

11. The applicant challenges the last sentence of this passage as being an incorrect statement of law and submits that Mr. McMahon fell into error in applying that sentence to the second hypothesis.

12. McMahon deals with the matter at paragraphs 36 to 38 of his Reasons, which read as follows:

36. The same observations can be made in relation

to the second hypothesis put forward by the

applicant, namely the delay caused by the

existence of constipation which in turn

delayed diagnosis and treatment.

37. This hypothesis was based on what might be

described as a 'throw away' observation by Dr.

Payne in these words -

'There was an obvious delay in diagnosis

because the cancer was not seen on the

barium enema x-ray. It could be presumed

the medical practitioners index of

suspicion was reduced by the patient's

'normal' but irregular bowel habit. The

symptoms irregular bowel habit,

constipation, diarrhoea and change in

bowel habit are all associated with bowel

cancer. This bowel habit must also have

caused the patient delay in his

recognition that something new was

happening. It is well known that

carcinomas take many months, or years to

enlarge sufficiently to cause complete

bowel obstruction.'

38. No further evidence was tendered in support of

this hypothesis. It is clearly speculation.

There is no evidence that delay occurred.

There is no evidence that the symptoms of a

polyp existed. In the absence of evidence,

any such hypothesis based upon such

speculation can not be regarded as reasonable."

13. It was submitted for the applicant that the Tribunal had erred in failing to provide a satisfactory process of reasoning for its finding that the second hypothesis was not reasonable. It was said alternatively, or perhaps additionally, that in reaching its conclusion that the second hypothesis was not reasonable, the Tribunal misdirected itself as to the construction to be given to ss.120(1) and (3) of the Act and in particular in requiring the existence of evidence of the hypothesised facts as a necessary prerequisite of an hypothesis being reasonable.

14. It was submitted that it was irrelevant to the issue before Mr. McMahon both whether there was evidence that delay had occurred or whether there was evidence that the symptoms of a polyp existed. No challenge, indeed, was made to either of these findings of fact.

15. It was submitted that, in a case such as the present, taking, for example, the factual matter of the existence of the symptoms of a polyp, the correct approach was to ask, not whether there was evidence of some sort before the Tribunal that the applicant did in fact have a polyp, but, rather, whether the hypothesis as a whole, including the issue of whether the applicant had a polyp was fanciful or unreal so as to make the hypothesis not a reasonable one within the meaning of s.120(3), cf. East v. Repatriation Commission [1987] FCA 242; (1987) 74 ALR 518 at p 533.

16. The meaning of s.120, and particularly the relationship between s.120(1) and s.120(3) is not without difficulty, nor for that matter is the relationship between those two sections, on the one hand, and s.119 on the other.

17. The explanation of the somewhat peculiar wording of s.120(3) and its juxtaposition with s.120(1) is to be found in the history of the provisions which is discussed in detail by this Court in East v. Repatriation Commission [1987] FCA 242; (1987) 74 ALR 518. Suffice it to say that the situation prior to 1985, as determined by the High Court in O'Brien v. Repatriation Commission [1985] HCA 10; (1985) 155 CLR 422 under the then Repatriation Act, was that the Commission was obliged to grant a claim unless it was satisfied beyond reasonable doubt that there were insufficient grounds for granting the claim. No onus of proof of a claim was placed on a claimant but where, in a particular case, the material before the Commission or Tribunal, did not provide any "positive inference in favour of the requisite connexion between death or incapacity and war service, then the Commission or Review Tribunal must be satisfied beyond reasonable doubt that there are insufficient grounds to grant the claim." Per Gibbs C.J., Wilson and Dawson JJ. at pp 433-4.

18. The 1985 amendment to the Repatriation Act and the subsequent Veterans' Entitlement Act of 1986 drew on what had been said by Brennan J. dissenting in O'Brien at p 438 where his Honour had said:

"Section 47 thus operates in a context where an

investigation has been carried out with reasonable

diligence and where all the relevant facts

ascertained in the investigation and furnished by

the claimant are before the decision-maker. If the

facts thus ascertained support a reasonable

hypothesis that the claimant is entitled to a

benefit under the elibigility provisions of the

Act, the Board or the Commission must determine to

grant the claim. If a reasonable hypothesis of

entitlement arises on some of those facts, the

Board or Commission must determine to grant the

claim unless other facts dispel the hypothesis

beyond reasonable doubt. If the Board or

Commission is satisfied that no reasonable

hypothesis of entitlement is supported by the facts

or that any such reasonable hypothesis is dispelled

beyond reasonable doubt, the Board or Commission

should reject the claim. Where, on the whole of

the material no reasonable hypothesis of

entitlement arises, there are 'insufficient grounds

for granting the claim'." (emphasis added)

19. As this Court pointed out in East, both the 1985 amendments to the Repatriation Act and the enactment of the current legislation evinced a continuing intention to overrule the law as enunciated by the High Court in O'Brien.

20. In East's case a number of hypotheses were advanced suggesting a connection between Mr. East's war service and his death. By way of example, one of the hypotheses concerned diet and it was said that there was during the war service a lack of vitamins A and C and that the diet was high in nitrates. There was, however, no evidence from which the Tribunal could reach a conclusion as to whether or not there were deficiencies in Mr. East's war time diet. The Tribunal thus found that there was no evidence sufficient to ground a hypothesis of causal connection with war service in the case of diet.

21. Before the Full Court in East it was said that the Tribunal had misconstrued s.120 and in particular what was meant by the requirement for a reasonable hypothesis connecting the death with war service. It was argued that s.120 in effect retained the O'Brien position, that is to say, that provided there was a real possibility of a causal relationship between war service and incapacity or death, and in the absence of proof beyond reasonable doubt of facts negativing that relationship, the claim must succeed. This argument was rejected having regard both to the history of the legislation and the meaning of the phrase "reasonable hypothesis".

22. The Court approved an explanation of the meaning of the phrase "reasonable hypothesis" emanating from a decision of a Veterans' Review Board in Stacey (Nos. V83/0396, V84/0821 and V28/072) in the following terms:

"'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 acceptabiltiy 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...'"

(emphasis added)

"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." (emphasis added)

24. It seems to me relatively clear, both from the wording of s.120(3) and, indeed, from what was said in East's case, that an hypothesis advanced in abstract which is not grounded in facts which are before the Tribunal could not be a reasonable hypothesis. The hypothesis must expressly be one which is raised by the material which is before the Tribunal. An hypothesis which exists in abstract can not easily be said to have been raised at all by the material before the Tribunal. Even if it be a possible interpretation of s.120(3) that an abstract hypothesis is raised merely by the assertion of that hypothesis, such an hypothesis could not be said to be a reasonable hypothesis of the relationship between the injury, disease or death, on the one hand, and the war service, on the other.

25. Thus s.120 is not concerned with abstract theories or hypotheses but is concerned with hypotheses which are grounded in fact. In other words, there will be a need for some evidence before the Tribunal to convert an hypothesis from being abstract to one having relevance to the facts of the particular case. In the absence of such facts which are a condition precedent to the hypothesis, the hypothesis even if it may be said to have been raised at all will certainly not show any relevant connection between the injury, disease or death and the war services and for that reason would not be a reasonable hypothesis.

26. Reference was made during the course of argument to the decision of the Full Court of this Court in Webb v. Repatriation Commission (1988) 78 ALR 696. It was put by counsel for the Commission that there was an inconsistency between East's case, on the one hand, and Webb, on the other, and that I should follow East in preference to Webb. It was also submitted that so far as relevant to the present case the issues were not fully argued in Webb and, in any event, the comments made in that case were obiter.

27. The claimant in Webb claimed that the cancer from which he suffered had been caused by a blow to his arm occasioned during war service. The Commission appealed from a decision of the Administrative Appeal Tribunal determining that the claimant was entitled to a pension. The question of law discussed in the appeal was the construction of s.120(3) of the Act and its relationship with s.120(1).

28. In the course of his judgment, Davies J. referred in some detail to the decision of the Court in East and continued at pp 699-700:

"Section 120(3) thus requires there to be material

which postulates a reasonable theory or hypothesis

positively connecting the claimant's incapacity or

death with his war service. But that is not to say

that s.120(1) is otiose or has no work to do.

Indeed, the legislative terms which were considered

in Law's case and O'Brien's case were re-enacted in

s.120(1) after both those decisions had been given.

Section 120(1) establishes the primary standard

with respect to matters of fact, that is to say

that if there be doubt as to the existence of a

crucial fact, the claimant has the benefit of that

doubt unless the non-existence of that fact is

established beyond reasonable doubt. The

requirement in s.120(3) of a reasonable hypothesis

is not a requirement that facts must be established

positively in the claimant's favour. Section

120(3) operates in the light of the standard

established by s.120(1), notwithstanding that it

requires that on the whole of the material there

must be a reasonable theory or hypothesis

connecting the incapacity or death to the war

service.

Necessarily, a theory or hypothesis which is

otherwise reasonable may be dispelled or brought to

nought if there be proof beyond reasonable doubt

that one of the facts, which, according to the

theory or hypothesis is essential to the connection

postulated, does not exist." (emphasis added)

29. After referring to what Brennan J. had said in O'Brien's case his Honour continued:

"Take, for example, a case where there was a

reasonable theory or hypothesis connecting the

development of a cancer, the subject of a claim,

with an injury which was alleged to have occurred

during war service. It if were proved beyond

reasonable doubt that that injury had in fact

occurred, not during war service, but shortly after

war service ended, that proof would bring the

otherwise reasonable hypothesis to nought."

(emphasis added)

"The combined effect of the two sub-sections is, in

my view, that the basic factual material, the data,

upon which the reasonable hypothesis referred to in

s.120(3) may or may not be raised, must, at the end

of the day, be found by the Commission to exist,

unless its existence is negatived beyond reasonable

doubt; the hypothesis or theory of connection

between the veteran's service and his injury,

disease or death, postulated upon this data is not

required to be established to any degree of proof

commonly referred to in the law. It is merely

required that the hypothesis be reasonable, not

fanciful or unreal, and that it be 'pointed to by

the facts, even though not proved on the balance of

probabitities': East v. Repatriation Commission

[1987] FCA 242; (1987) 74 ALR 518 at p 534. It is thus clear

that it is quite incorrect to speak of any

legislative requirement that a veteran's claim

should succeed unless a hypothesis so raised be

'dispelled beyond reasonable doubt.'

In any given case, s.120 requires, in my view, that

the Commission survey the whole of the relevant

material before it and determine whether there is

established a basic foundation of fact upon which

the required hypothesis of connection can be

raised. In determining whether this foundation

exists, it applies the prescribed 'heavy burden of

disproof' (per Toohey J., Law v. Repatriation

Commission (1980) 29 ALR 64 at 74). The

Commission then must determine whether, upon the

foundation so established, the reasonable

hypothesis of connection is raised. This

determination may involve simply a process of bare

reasoning from this foundation of fact (cf Adelaide

Stevedoring Co. Ltd. v. Forst [1940] HCA 45; (1940) 64 CLR 538

at 563-4) or may require the consideration of

competing propositions as to the connection or lack

of it advanced by way of expert medical testimony;

or both. It is quite clear that into this area of

deliberation there must not intrude any question of

onus of proof in the accepted sense of either the

veteran or the Commission bearing an overall burden

or proof in the case; nor of any particular

standard of proof, let alone one of disproof to the

criminal standard of a postulated connecting

hypothesis."

31. In my view there is no inconsistency at all between what is said in East's case and what is said in Webb.

32. Where, as will usually be the case, the material before the Commission does not itself show a clear connection between the death or incapacity or injury and the member's war service, it will be the duty of the Commission to examine the material before it to see whether that material raises an hypothesis which connects the injury, disease or death with the claimant's war service. The Tribunal must consider whether any hypothesis so raised is reasonable. If the material before the Commission discloses no evidence at all grounding the hypothesis so that the hypothesis is merely abstract, then it may be said either that the hypothesis is not raised on that material at all, or that such hypothesis is not, having regard to that material, a reasonable one. In other words, there must be some evidence to be found in the material before the Tribunal, or, as was said in East, the hypothesis must "find support in that material, that is, the material must point to and not merely leave open, a hypothesis as a reasonable hypothesis."

33. Taking by way of example the facts in Webb, the material before the Commission must raise the hypothesis and the hypothesis must be reasonable; that is to say, there must be some evidence in that material as to a blow to the arm occuring to the veteran while on war service.

34. Once the Commission has formed the opinion that the material before it does raise a reasonable hypothesis then s.120(1) will fall to be considered. It may then come about that, having regard to the material before the Tribunal, the hypothesis is dispelled beyond reasonable doubt. This, with respect, in my opinion, is what was meant by Davies J. in the passage I have cited from Webb when his Honour dealt with the case where it was proved beyond reasonable doubt that, although the cancer might be hypothesised to have originated in an injury, that injury did not occur during war service. His Honour, in the passage cited, had assumed that there was first found a reasonable hypothesis, that is to say, one which in the East sense was grounded in fact. His Honour then considered the application of s.120(1).

35. The same idea, it can be said, is caught up by Foster J. when his Honour refers to the basic factual material upon which the reasonable hypotheses is raised being found "at the end of the day" to exist. The application of s.120(1) in a case such as the present, in my view, will normally arise only after the reasonable hypothesis has been raised on the material before the Tribunal, that is to say, only after there is some ground of fact which both raises the hypothesis and allows it to be described as reasonable. An interpretation of the relation between s.120(1) and s.120(3) of the Act which suggests that in determining whether an hypothesis is reasonable any fact upon the existence of which the hypothesis is dependent is to be assumed unless dispelled by the evidence beyond reasonable doubt, would be contrary to the clear legistative intention to replace the O'Brien test with that expressed in dissent by Brennan J. It is not to be assumed that the Court in Webb overlooked what had been said in East.

36. Ultimately, in the present case, the applicant did not seek to rely upon there being any conflict between the two cases. Indeed, it was submitted that East's case dealt with s.120(3), that is the effect of the requirement to raise the reasonable hypothesis and that Webb's case dealt with the interrelationship of s.120(3) and s.120(1) so that there could be no inconsistency. While, this is of course so, if there were any conflict between what was said in each case, I do not think that that conflict could be so readily resolved.

37. The applicant sought to make a distinction between the concept of an hyopthesis and the concept of a fact. It was said, for example, concentrating on the existence of polyps, that the existence of polyps was not really a fact upon which evidence had to exist but was itself an hypothesis. Reference was made to evidence before the Tribunal from Dr. Payne which suggested that cancer may be preceded in a certain percentage of cases by polyps. Let it be accepted that this is so, and let it further be accepted that the applicant's constipation contributed to a failure of early diagnosis because it masked the symptoms which the polyps may have caused, so that both the existence of polyps and the existence of delay could be described as part of the hypothesis. If the argument is, however, put this way the hypothesis becomes a simple one, namely, that constipation will always lead to cancer for the simple reason that cancer comes from polyps; constipation causes delay which masks the effects of polyps; therefore constipation causes cancer. However, this hypothesis is precisely hypothesis one, which the Tribunal rejected as not being a reasonable hypothesis having regard to the evidence before it.

38. Whether or not a particular hypothesis is, on the evidence, reasonable or unreasonable is a question of fact and not a question of law. As this Court said in Hooke v. Repatriation Commission (unreported 11 February 1988): "It was a matter for the Tribunal whether it regarded the hypothesis by which each of the applicant's claims was supported as reasonable." The Court continued:

"This court has recently emphasised in Apthorpe v.

Repatriation Commission (Davies, Lockhart and

Gummow JJ. unreported 25 November 1987) that, where

Parliament has committed to the tribunal a decision

which requires an exercise of judgment, it is

necessary for an appellant to show an error of law

in that exercise of judgment before the tribunal's

decision can be disturbed on appeal. Reference was

made to what Lord Brightman said in Puhlhofer v.

Hillingdon London Borough Council [1986] UKHL 1; (1986) 1 AC 484

at 518:

'Where the existence or non-existence of a

fact is left to the judgment and discretion of

a public body and that fact involves a broad

spectrum ranging from the obvious to the

debatable to the just conceivable, it is the

duty of the Court to leave the decision of

that fact to the pubic body to whom Parliament

has entrusted the decision-making power save

in a case where it is obvious that the public

body consciously or unconsciously, are acting

perversely.'

A decision under s.120(3), that the tribunal is of

the opinion that the material before it does not

raise a reasonable hypothesis connecting a disease

with the circumstances of the particular service

rendered by the applicant, is just such a decision

as falls within Lord Brightman's dictum."

39. It follows, in my view, that the Tribunal did not err in law in the test stated by Mr. McMahon in paragraph 35. It further follows that it would be my view that the Tribunal did provide a satisfactory process of reasoning for its finding that the second hypothesis was not reasonable, that basis being that there was no evidence before the Tribunal which grounded the hypothesis in the first place. It should perhaps be said that the reasons of the Tribunal, while abbreviated, seem to reflect the significance that was placed upon the argument before the Tribunal. Be that as it may, in my view the Tribunal did not err in law and there being no attack by the applicant in the present case on the finding that there was no evidence at all before the Tribunal either in relation to delay or in relation to the existence of polyps the appeal, in my view, must be dismissed.