Matter remitted to the Tribunal for reconsideration in accordance with these reasons.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

This is an appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal") affirming a decision of the Veterans' Review Board ("the Board"). The respondent, who is the widow of Robert Francis Lowerson ("the veteran"), successfully appealed to the Board from a decision of the Repatriation Board that the Commonwealth was not liable to pay her pension under s.13 of the Veterans' Entitlements Act 1986 ("the Act") in respect of the death of her husband.

2. An appeal to this Court from a decision of the Tribunal lies only on a question of law: s.44(1) of the Administrative Appeals Tribunal Act 1975. It was submitted by Mr Robertson on behalf of the Repatriation Commission ("the Commission") that the Tribunal erred in its interpretation of s.120 of the Act in reaching its decision that the Commonwealth was liable to pay the respondent pension in respect of the veteran's death. Section 120 of the Act provides, inter alia:

"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.

(4) Except in making a determination to

which sub-section (1) or (2) applies, the

Commission shall, in making any determination or

decision in respect of a matter arising under

this Act or the regulations, including the

assessment or re-assessment of the rate of a

pension granted under Part II or Part IV, decide

the matter to its reasonable satisfaction.

(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."

3. The history of s.120 and of the legislation providing for the payment of benefits to ex-service personnel and their dependants is traced in East v Repatriation Commission [1987] FCA 242; (1987) 16 FCR 517.

4. The question which the Tribunal had to decide was whether the death of the veteran was war-caused. The Act provides that the death of a veteran shall be taken to have been war-caused if it was attributable to any eligible war service rendered by him: s.8(1)(b).

5. The veteran's war service ceased on 12 June 1944. His death occurred on 17 September 1969 as the result of injuries he received at 2 a.m. on 13 September when he was thrown from the car he was driving along the Hume Highway, Yagoona. According to an eye-witness of the accident, the veteran's vehicle appeared to be travelling at a high speed when it hit the median strip on the highway and became airborne, causing the veteran to be thrown from the vehicle. No tests were performed to determine whether he was under the influence of alcohol when the accident occurred. The Tribunal reached the conclusion that his death was war-caused.

6. The respondent's claim for pension rested on two alternative hypotheses. One hypothesis was that her husband's death might have been precipitated by his war-related disability of rheumatic fever with endocarditis. The Tribunal found it unnecessary to consider whether the material before it raised this hypothesis. It was satisfied that the material raised an alternative and reasonable hypothesis that the veteran had become an alcoholic as a result of his war service, was habitually intoxicated, and was probably in an intoxicated state at the time of the accident which caused his death. The Tribunal concluded that it was a reasonable hypothesis "that war-caused alcoholism was the cause of the veteran's drinking, which led to his lack of inhibition in driving his motor vehicle too fast, this speed causing him to lose control of the car, resulting in the accident and his death, so that his death is referable to, and was caused by, his war-caused alcoholism".

7. The Tribunal said the fact most crucial to the establishment of this hypothesis was that the veteran was an alcoholic. After referring to evidence as to the veteran's drinking habits, it said:

"There is clearly, on the evidence, an

element of doubt about the crucial fact of

alcoholism and my preceding observations do not

reveal it all. I have some doubt that the

veteran was an alcoholic, and think it possible

that, like many Australian males of his

generation, with or without war service, he had

fallen into the habit of heavy drinking, with

work colleagues, after work. But this doubt is

required by the Act to be resolved in favour of

the claimant unless the non-existence of the

crucial fact is established beyond reasonable

doubt. On the whole of the evidence before me,

it is not established beyond reasonable doubt

that the veteran was not an alcoholic at the

time of his death. Accordingly, I must find

that he was."

8. The Tribunal then turned its attention to the question whether the veteran's war service caused his alcoholism and whether he remained an alcoholic up to the time of his death. It considered whether it was possible that the veteran had become an alcoholic because of the conditions under which he undertook war service and concluded that he was a person of "vulnerable personality susceptible to disease like alcoholism". Having observed that incidents during his war service and his feelings of failure about his contribution to the war effort might have provided the initial basis for the veteran's habit of resorting to alcohol as an escape, and that he might have had a recurring emotional problem contributing to his drinking, the Tribunal said:

"These, of course, are mere possibilities.

But I do not consider that one is in the realm

of fantasy in entertaining them. The story is

a plausible one. The Act requires that the

claimant should have the benefit of the doubt

unless the non-existence of the crucial fact,

namely, in this instance, that war service

contributed to a continuing lifestyle problem of

alcoholism, is established beyond reasonable

doubt. In my view, the non-existence of that

fact is not established beyond reasonable doubt."

9. The Tribunal then turned its attention to the question whether there was any basis for a hypothesis that the veteran was affected by alcohol at the time of the accident. After observing that there was a degree of speculation as to how the veteran might have spent his last hours and after referring to evidence that he was a member of two licensed clubs and was living in lodgings separated from his wife, the Tribunal said:

"The time of the accident, 2 o'clock in the

morning, indicates a social occasion, given that

we know that the veteran's last working shift

had finished at 6 pm the previous day. He was

driving at a high speed, which is a sign of

uninhibition. Alcohol notoriously reduces

inhibition. I consider that it is more than

possible that the veteran was driving his

vehicle whilst intoxicated. Certainly, the

non-existence of that fact has not been

established beyond reasonable doubt."

10. Mr Robertson submitted that the above excerpts from the Tribunal's reasons demonstrate that it applied a wrong test in deciding whether, in terms of s.120(3) of the Act, the material before it raised a reasonable hypothesis connecting the veteran's death with his war service. The test that the Tribunal applied, so he submitted, was that if there is any doubt as to the existence of a fact which might form part of the material under consideration by the Commission, then a claimant for pension has the benefit of that doubt unless the non-existence of the fact is established beyond reasonable doubt. He submitted that if there were any doubt that this was the test applied by the Tribunal, the doubt was dispelled when reference was had to the following passage in the Tribunal's reasons. The passage followed immediately upon the Tribunal's reference to the two alternative hypotheses advanced on behalf of the respondent:

"In order to test the reasonableness of

these hypotheses, it is necessary first to

review the evidence which would provide their

factual bases and to make the findings of fact

which are available on the evidence according to

the appropriate standard of proof. Only then

will it be possible to determine whether the

asserted hypotheses are reasonable on the facts

as found.

Taking the first of the respondent's

hypotheses, the fact most crucial to its

establishment was that the veteran was an

alcoholic. In making a finding on this

question, I am guided by the words of Davies J

in Webb v Repatriation Commission (1988)

8 AAR 274 at 277:

'. . . 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."

11. It was submitted by Mr Smith on behalf of the respondent that the Tribunal did not apply the test as identified by Mr Robertson. Mr Smith submitted that the Tribunal's references to proof beyond reasonable doubt were references to the considerations referred to in s.120(1) of the Act. I do not think this submission is correct. The references in the Tribunal's reasons to what it took to be the Commission's obligation to prove certain matters beyond reasonable doubt were made in the context of its consideration of the question whether the material raised a reasonable hypothesis connecting the veteran's death with his war service. That is to say, the references were made in the context of the Tribunal's consideration of the question whether it should form the opinion referred to in s.120(3).

12. Hence, the real question for decision on the appeal is whether the test that the Tribunal applied was the correct test. In my opinion it was not. There is nothing in s.120(3) itself which requires the Commission to resolve any doubt as to the existence of a fact in favour of a claimant for pension unless the non-existence of that fact is established beyond reasonable doubt. In East v Repatriation Commission (supra) it was argued that the words "reasonable hypothesis" in s.120(3) take their colour from s.120(1). It was also argued that the effect of the adoption of the phrase "beyond reasonable doubt" in s.120(1) is to exclude a determination adverse to a claimant where there exists a possibility which is not fantastic or unreal. These arguments were rejected by the Court, which said that they paid insufficient regard both to the history of the legislation and to the meaning of the phrase "reasonable hypothesis": [1987] FCA 242; 16 FCR 517 at pp 531-532.

13. A precursor of s.120 of the Act is to be found in an amendment made in 1985 to the Repatriation Act 1920. That amendment, for the first time, introduced a provision which required the Commission not to grant a claim for pension if it was reasonably satisfied that, in effect, there was no material before it raising a reasonable hypothesis that there existed a connection between the death or incapacity of a veteran and his war service. In East the Court said (at p 532):

"The obvious intention of the 1985 amendment was

to reverse, to some extent, the trend towards

improvement of the position of claimants.

Parliament wished to retain the requirement that

the Commission should negative claims beyond

reasonable doubt but to limit the operation of

that requirement to cases where there was some

reason to believe in the existence of a causal connection."

14. The Court in East adopted the meaning of the phrase "reasonable hypothesis" explained by the Board in words quoted by the Tribunal in Re Dell and Repatriation Commission (1986) 9 ALD 596 at p 615 as follows:

"In the opinion of the Board, to be reasonable, a

hypothesis must possess some degree of

acceptability or credibility - it must not be

obviously fanciful, impossible, incredible or

not tenable or too remote or too tenuous. For

a reasonable hypothesis to be 'raised' by

material before the Board, we think it must find

some support in that material - that is, the

material must point to, and not merely leave

open, a hypothesis as a reasonable hypothesis.

At the same time, however, a hypothesis may be

reasonable without having been proved (either on

the balance of probability or beyond reasonable

doubt) to be correct as a matter of fact. Were

it otherwise, it would no longer be a hypothesis

but would have been elevated to some higher status."

15. East's Case was referred to with obvious approval by Davies J in Webb v Repatriation Commission (1988) 19 FCR 139 at p 141. The extract from his Honour's judgment quoted in the Tribunal's reasons in the present case cannot have been intended by his Honour to convey an opinion as to the effect of s.120(3) different from that expressed by the Court in East. The paragraph in his judgment in Webb from which the extract was taken is in the following terms (at p 142):

"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 war service."

16. Read in its entirety, what his Honour said is not inconsistent with East. His Honour accepted that on the whole of the material before the Commission there must be a reasonable hypothesis connecting a veteran's death with his war service. His Honour did not state that if there is any doubt as to the existence of a fact which might form part of the material under consideration by the Commission then the onus is on the applicant for a pension to prove the non-existence of the fact beyond reasonable doubt.

17. I think it is reasonably clear from the Tribunal's reasons that it placed too much emphasis on the words used by Davies J in the extract which it quoted from his judgment in Webb. In doing so, it was led into the error of construing s.120(3) as requiring it to find a fact proved unless it was disproved beyond reasonable doubt. This error explicitly appears from a passage in one of the excerpts from its reasons which is quoted above, viz.:

"On the whole of the evidence before me, it is

not established beyond reasonable doubt that the

veteran was not an alcoholic at the time of his

death. Accordingly, I must find that he was."

18. This approach to the construction of s.120(3) diverted the Tribunal from considering whether an assessment of the whole of the material before it caused it to be of the opinion that the material raised a reasonable hypothesis connecting the veteran's death with his war service.

19. This is not a case in which, reading the reasons of the Tribunal as a whole, it can be seen to have applied the correct test notwithstanding some language in its reasons which may give rise to some uncertainty as to the precise test which it applied: cf Politis v Federal Commissioner of Taxation (1988) 16 ALD 707. Rather, it is a case where the Tribunal's erroneous approach to the construction of the legislation clearly appears from its reasons. In such circumstances, its decision cannot be allowed to stand.

20. Accordingly, the matter must be returned to the Tribunal for its reconsideration. When the Tribunal reconsiders the matter it will be open to it to form the opinion that the material before it raises a reasonable hypothesis connecting the veteran's death with his war service if, but only if, the material points to, and not merely leaves open, the hypothesis as a reasonable hypothesis. That is not to say that any fact upon which the hypothesis is based must be proved on a balance of probabilities. But it will not be proper for the Tribunal to proceed on the basis that if there is any doubt as to the existence of a fact which it thinks is material, then the doubt is to be resolved in favour of the respondent unless the non-existence of the fact is proved beyond reasonable doubt. For example, it will not be proper for the Tribunal to regard itself as being bound to find that the veteran was an alcoholic at the time of his death unless the evidence before it proves that he was not.

21. The tribunal's task was well described by Hill J in Gilbert v Repatriation Commission [1989] FCA 31; (1989) 10 AAR 73 where his Honour said (at p 81):

"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'."

22. The appeal is allowed and the matter is remitted to the Tribunal for reconsideration in accordance with these reasons. The appellant does not seek any order as to costs and, accordingly, there will be no order as to the costs of the appeal.