REASONS FOR JUDGMENT
1 This appeal by the Repatriation Commission pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") concerns the rate of pension to which the respondent to the application, Hubert Joachim Alexander ("Mr Alexander") is entitled pursuant to the Veterans' Entitlements Act 1986 (Cth)("the Act"). Mr Alexander is a veteran who is receiving a pension for war-caused injuries and war-caused diseases under Part 2 of the Act. The Administrative Appeals Tribunal ("the Tribunal") determined on 12 July 2002 that Mr Alexander was entitled to be paid pension at the special rate under s 24 of the Act.
2 The Repatriation Commission contends that the Tribunal erred in determining that that rate of pension payable to Mr Alexander should be at the special rate, and says that the Tribunal erred in law in its consideration of s 24(1)(c) of the Act, applying an incorrect test and failing to take into account relevant considerations.
History of the Matter
3 Mr Alexander served in the Australian Army from 1960 to 1969, including service in Vietnam. On 11 March 1999 he lodged a claim for disability pension in respect of disabilities which he described as hearing loss, breathlessness, lower limb problems, regular headaches, gastric problems, lumbar spondylosis, anxiety state, legs ache and impotence. On 25 May 1999 a delegate of the Repatriation Commission, in relation to the 11 March 1999 claim for disability pension, made the following determination:
Bilateral sensorineural hearing loss with tinnitus, chronic bronchitis and emphysema, gastro-oesophageal reflux disease, depressive disorder and claustrophobia, were accepted as war-caused, with effect from 11 December 1998;
Localised osteoarthrosis of the left knee, right knee, right ankle and foot were rejected, as were migraine, lumbar spondylosis and atherosclerotic peripheral vascular disease;
Pension was granted at 100% of the general rate, with effect from 11 December 1998.
4 Section 20 of the Act permits the Repatriation Commission to back-date pension payments to a date three months prior to the date on which a claim for pension was lodged, hence the effective date of 11 December 1998.
5 Mr Alexander applied to the Veterans' Review Board for review of the delegate's decisions. On 1 February 2000, the Veterans' Review Board decided:
Atherosclerotic peripheral vascular disease in both legs should be accepted as war caused;
The delegate's refusal of claims for localised osteoarthrosis of the left and right knees, localised osteoarthrosis of the right ankle and right foot, lumbar spondylosis and migraine should be affirmed;
The assessment of the respondent's pension rate should be adjourned.
6 On 21 June 2000 the Board decided that the diagnosis of the respondent's psychiatric disorder should be amended from depressive disorder to post traumatic stress disorder, and that the respondent's rate of pension should remain at 100% of the general rate.
7 Meanwhile, on 3 April 2000 Mr Alexander had lodged an application for an increase in his pension. That application was refused by a delegate of the Commission, and the respondent sought review by the Veterans' Review Board. The Veterans' Review Board decided on 14 February 2001 that the respondent's rate of pension should continue at 100% of the general rate.
8 Mr Alexander applied to the Tribunal for review of the Veterans' Review Board's decisions of 1 February 2000, 21 June 2000 and 14 February 2001. Before that hearing, Mr Alexander and the Repatriation Commission agreed that Mr Alexander satisfied the requirements for special rate pension other than s 24(1)(c). The dispute between the parties in the Tribunal was therefore confined to the issue of whether the requirements contained in s 24(1)(c) were satisfied.
Legislative Framework
9 The regime for the payment of pensions to veterans provided for by the Act is as follows:
The Commonwealth is liable to pay a pension where a veteran has become incapacitated from war-caused injury or war-caused disease - s 13;
A veteran may make a claim for a pension - s 14;
A veteran who is in receipt of a pension may make an application for an increase in the rate of pension - s 15;
The Repatriation Commission is required to consider and determine the claim or application of a veteran - s 18.
The Repatriation is required to consider the rate or rates at which a pension would have been payable during the assessment period, and also the rate at which the pension is payable: s 19(5C). The assessment period commences on the day on which a claim or application is received, and ends on the day when the claim or application is determined: s 19(9).
10 A pension under the Act may be paid at the general rate (s 22), the intermediate rate (s 23), or the special rate (s 24).
11 It is helpful to set out the relevant parts of s 24, dealing with the special rate of pension:
"(1) This section applies to a veteran if:
(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;
(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
…
(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 his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and
…
(2) For the purpose of paragraph (1)(c):
(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 his or her own account, by reason of that incapacity if:
(i) 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; 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 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."
In relation to s 24(1)(aab), Mr Alexander was born on 9 July 1944 and was thus 55 years of age when he lodged his claim for pension.
12 Section 24(1)(b) addresses the severity of incapacity from war-caused injury or war-caused disease. It imposes a requirement, for the special rate of pension with which s 24 is concerned, that the veteran be totally and permanently incapacitated, which is defined by s 24(1)(b) to be an incapacity from war-caused injury or war-caused disease or both to be 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.
13 Section 24(1)(b) thus addresses the extent of the veteran's war-caused incapacity. Section 24(1)(c) is directed at a quite different question, causation. Section 24(1)(c) requires that the veteran's war-caused incapacity, and only that war-caused incapacity, prevented the veteran from continuing to undertake remunerative work that the veteran was undertaking.
14 Section 24(1)(c) is a "sole cause" requirement: the subsection contains the requirement that incapacity from war-caused injury or war-caused disease or both "alone" prevents a veteran from continuing to undertake remunerative work that the veteran was undertaking.
15 In Flentjar v Repatriation Commission 1997 48 ALD 1 ("Flentjar") at 5, Branson J (with whom Beaumont and Merkel JJ agreed) re-formulated the requirement as a question:
"… is the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?"
16 An application for special leave to appeal from the judgment of the Full Federal Court in Flentjar was refused with costs by Gaudron and Callinan JJ on 19 May 1998, Gaudron J announcing:
"The Court is of the view that there is no reason to doubt the correctness of the decision of the Full Federal Court. Accordingly, special leave is refused … with costs."
17 In Repatriation Commission v Hendy [2002] FCAFC 424, a Full Court of the Federal Court (Whitlam, Emmett and Stone JJ) on 19 December 2002 said at par 37:
"The consideration of what a veteran would probably have done, absent the service disabilities, is a hypothetical exercise. The language of s24(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." (Emphasis in original)
18 Burchett J noted in Cavell v Repatriation Commission (1988) 9 AAR 534 at 538, that Davies J in Re Easton v Repatriation Commission (1987) 6 AAR 558 at 570 to 571 referred to Banovich v Repatriation Commission (1986) 6 AAR 113, Lucas v Repatriation Commission (1986) 6 AAR 122 and Re Apthorp v Repatriation Commission (1986) 9 ALN N157, each of which cases emphasised that:
"… what must prevent the veteran from continuing to undertake remunerative work, in order to satisfy par (c), must be war-related incapacity and that incapacity alone."
Burchett J continued:
"As was pointed out in Lucas's case (supra), that means it must be relevant to determine whether the applicant would, in any event, have been debarred from work because of a factor such as age. But Davies J went on to say:
'I would not, however, substitute for the word 'alone' the description 'sole, unique and absolute cause' as stated in Re Repatriation Commission and Cavell (unreported, No 2891, 19 September 1986) … . In the absence of ambiguity, other words should not be used in place of the words used by the legislation.'
With respect, I entirely concur in the comment made by Davies J. This is not to say, of course, that a paraphrase may not throw light into a dark corner of a statutory prescription. But the phrase used by the tribunal, to which objection is taken, involves an almost scholastic insistence upon analysis of the concept of singularity. The tendency of that is to distract the tribunal from its true task - to make a practical decision whether the veteran's loss of remunerative work is attributable to his service-related incapacities, and not to something else as well. It is a decision that should not be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide."
Reasoning of the Tribunal
19 The evidence before the Tribunal included evidence by a specialist in occupational medicine, Dr Steven Goode. Dr Goode had been asked to report on the degree to which the physical or mental impairment Mr Alexander suffers from, as a result of his service-related conditions, has reduced his capacity to undertake the kinds of remunerative work identified in the questions asked by the Department of Veterans' Affairs. Dr Goode had answered as follows:
"Taken overall, the service-related conditions on their own would be sufficient to prevent Mr Alexander returning to work in any of his previous work environments, and it is the psychiatric condition which is most important in this regard." [Dr Goode's emphasis]
20 Dr Goode was also asked:
"In what ways if any, do Mr Alexander's non service-related and unclaimed conditions prevent him from undertaking the remunerative work which he ceased on 13 March 1999."
Dr Goode referred to conditions of chronic angina, lumbar spondylosis and left shoulder rotator cuff tendonitis, and then said:
"I would see the non service-related conditions as being of secondary importance to the service-related conditions in their adverse effects on work capacity."
21 The Tribunal's reasoning appears from its reasons at pars 45 to 48 inclusive:
"45. The Tribunal has given weight to Dr Goode's opinion evidence (paragraph 28). It is significant that Dr Goode's opinion identifies Mr Alexander's war service conditions as going beyond being simply dominant over the non-war service conditions but are elevated to a significantly higher level. That is, the war service conditions on their own would be sufficient to prevent Mr Alexander from returning to any of his previous work environments, including those activities prior to 1988. [Tribunal emphasis]
Moreover, Dr Goode, in recognising the psychiatric condition as the most important disability, states in his report (Exhibit 4, page 8):
'Because of the psychiatric condition, I doubt that Mr Alexander would cope very well at all with the general workplace environment, with the necessary interaction with workmates and Supervisors. He would be irritable in the workplace, with reduced concentration and attention, with the potential to make mistakes. I would see this as cutting across all potential work places.'
Accordingly, the Tribunal concludes that, notwithstanding that Mr Alexander has non-war service conditions, that it can be clearly adduced from Dr Goode's expert opinion to the reasonable satisfaction of the Tribunal, that Mr Alexander's war service conditions, alone, would prevent him from undertaking the relevant 'remunerative' work. That is, the question of whether some combination of war service conditions and non-war service conditions preventing Mr Alexander from undertaking remunerative work does not arise.
The Tribunal accepts Dr Goode's evidence and finds that if Mr Alexander did not have a psychiatric condition (PTSD), concentration and attention difficulties, physical problems (chronic obstructive airways disease; peripheral vascular disease), noise induced hearing loss and tinnitus as well as claustrophobia, he still would have been working. Unfortunately, he does have these war service conditions which prevent him from continuing in remunerative work. These war service conditions act independently from the non-war service conditions in preventing Mr Alexander from working. That is, in themselves, these war service conditions, alone, prevent Mr Alexander working in any of his previous work environments [see paragraph 28(a)]. Accordingly, the issue whether a combination of war service and non-war service related conditions preventing Mr Alexander from working is a non-issue in the factual circumstances of this application for review. Given this finding that Mr Alexander's war service conditions are the sole reason for Mr Alexander not being able to continue to undertake relevant remunerative work, the subsection 24(2)(b) requirements are satisfied: that is, it is irrelevant for the Tribunal to consider whether Mr Alexander made genuine attempts to seek work after he sold his video production business in October 2000. …"
22 The test under s 24(1)(c) is not, "would Mr Alexander's war-caused conditions alone prevent him from undertaking the relevant remunerative work?", as the Tribunal indicated in pars 47 and 48 was the test it applied. As par 48 in particular indicates, the Tribunal concluded that if Mr Alexander did not suffer from war-caused difficulties, "he still would have been working". This is not the test for which s 24(1)(c) calls. It is whether war-caused conditions, alone, prevent the respondent from continuing to undertake remunerative work that he had been undertaking. It seems to me the Tribunal has not addressed the question of causation that s 24(1)(c) calls for, but has, in effect, applied the requirements of s 24(1)(b). The conclusion that "a combination of war service and non-war service related conditions preventing Mr Alexander from working is a non-issue" is simply wrong. If the non-service related conditions were a factor in preventing Mr Alexander from continuing to undertake remunerative work, albeit those conditions were "of secondary importance", the "alone" requirement of s 24(1)(c) would not be satisfied.
23 The appeal must be allowed.
24 The Repatriation Commission originally sought, if it was successful, that the matter be remitted to the Tribunal, differently constituted, for reconsideration according to law. The qualification as to the composition of the Tribunal on a reconsideration was ultimately not pressed. The composition of the Tribunal for that reconsideration is a matter for the President of the Tribunal: see s 20 of the AAT Act. I have noted in this context the observations in Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11, of Gleeson CJ in par 4, Gummow and Hayne JJ at par 62.
25 The decision of the Tribunal of 12 July 2002 is set aside, and the matter is remitted to the Tribunal for determination according to law.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender .
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Solicitor for the Applicant: Australian Government Solicitor