CONSIDERATION
35 The text of s 120(1) of the Act has been authoritatively interpreted as assuming the existence of "incapacity from injury or disease" as a matter of established fact rather than as a matter of claim by the veteran. There is contextual support for that interpretation in s 120(3) of the Act which is expressly concerned only with the issue of causal nexus between incapacity from injury or disease and operational service leaving the issue as to the fact of incapacity from injury or disease to be resolved in accordance with the provisions of s 120(4) of the Act. The provisions of ss 196B(2), 120A(3) and 120A(4) also suggest that the Statement of Principles exists exclusively for the purposes of determining causation at the second stage of the enquiry with the first stage of the enquiry being governed by s 120(4) of the Act. That is the view which has prevailed as a matter of judicial decision.
36 In Repatriation Commission v Budworth [2001] FCA 0317; (2001) 63 ALD 422, Madgwick J at first instance, concluded at [40] that where the decision-maker is obliged to look to the issue of causation to determine whether the diagnosis is correct, the decision-maker must apply the reverse criminal standard in s 120(1). His Honour said:
[40] In my opinion, what the tribunal did was to refuse the claim on the basis of, as it were, a "rolled-up" issue of causation, in that the tribunal found that nothing that the applicant experienced while on service would give rise to PTSD and therefore that he did not suffer that particular disease. The only stressors said to give rise to PTSD were alleged war-related events. In such a circumstance, where a decision-maker under the Act is actually obliged to look to the issue of causation to determine whether the diagnosis is correct, there is, as I have indicated, much to be said for the view that it must apply the reverse criminal standard.
37 This approach was expressly rejected by Whitlam J at first instance in Benjamin v Repatriation Commission [2001] FCA 522; (2001) 64 ALD 411 at [24], subsequently by the Full Court in Budworth (2001) 16 FCR 200 and then by the Full Court in Benjamin [2001] FCA 1879; (2001) 70 ALD 622, following the Full Court in Budworth (2001) 116 FCR 200.
38 The Full Court in Budworth at [17] and [20] said of Madgwick J's reasoning:
[17] … [W]e are unable to accept that the differentiation between the application of the burden and standard of proof identified in subss (1), (2) and (3) of s 120 on the one hand and those indicated in subs (4) thereof on the other is to be qualified in the way which the primary judge outlined in [11]-[12] above. In that regard, we respectfully adopt this dictum of Whitlam J in Benjamin v Repatriation Commission (2001) 64 ALD 411 at 417, [24], as follows:
In Cooke the Full Court said (at 310) that s 120(1) and (3) of the Act assume the present existence of the relevant disease. This must, as the Full Court had earlier indicated (at FCR 308; ALD 2; ALR 18), be a claimed disease. With respect, I do not agree with the views about the ratio in Cooke adopted in Budworth v Repatriation Commission (2001) 63 ALD 422 and Meehan v Repatriation Commission (2001) 64 ALD 366, which do not refer to the "narrow issue of law" so identified by the Full Court. In my opinion, it should be borne in mind that a claim for a pension under Part II of the Act is required by s 14(5) to be made in respect of incapacity from "a particular injury or disease". That means for present purposes that it is first necessary to determine whether the veteran contracted the disease "as claimed". That important qualification is acknowledged in the language of s 19(7)(a) of the Act.
[20] … We regard Cooke as decisive of the critical issue on this appeal, namely what standard of proof is to be applied when determining whether a claimed injury or disease exists. Consequently we consider that the primary judge erred in concluding that the reverse criminal standard of proof contained in s 120(1) of the Act was relevantly applicable...
39 This resolution of the issue of interpretation is also supported by the decision of the Full Court in Benjamin where the Full Court said at 634 of the diagnosis stage of a PTSD claim:
[55] The first question for the tribunal will be how to characterise the psychiatric problems exhibited by the veteran. If the tribunal is satisfied that the symptoms constitute an injury or disease, the second question will be whether there is an SoP[sic] in force in respect of the disease. The diagnosis of that disease, and the determination of whether or not there is an SoP[sic] in force in respect of that kind of disease, falls for determination according to the standard of proof laid down in s 120(4). The characterisation of a disease (or injury or death in an appropriate case), for the purposes of determining whether or not an SoP[sic] is in force in respect of that kind of disease (or injury or death), is separate from the question of whether a claim relates to the operational service rendered by a veteran within s 120(1). The standard of proof laid down by s 120(1) has no application to the former question.
40 In our respectful opinion, the effect of the settled course of judicial authority is that a veteran is entitled to have that aspect of a claim for PTSD concerned with whether it was war-caused dealt with in accordance with the four-step process explained by the Full Court in Repatriation Commission v Deledio (1998) 83 FCR 82 (Deledio) only if it is established on the balance of probabilities that the veteran does in fact suffer from incapacity from that injury or disease: Budworth (2001) 116 FCR 200 at [19].
41 In Deledio at 97-98, the Full Court said as follows:
1. The Tribunal must consider all the material which is before it and determine whether that material points to a hypothesis connecting the injury, disease or death with the circumstances of the particular service rendered by the person. No question of fact finding arises at this stage. If no such hypothesis arises, the application must fail.
2. If the material does raise such a hypothesis, the Tribunal must then ascertain whether there is in force an SoP[sic] determined by the Authority under s 196B(2) or (11). If no such SoP is in force, the hypothesis will be taken not to be reasonable and, in consequence, the application must fail.
3. If an SoP[sic] is in force, the Tribunal must then form the opinion whether the hypothesis raised is a reasonable one. It will do so if the hypothesis fits, that is to say, is consistent with the "template" to be found in the SoP. The hypothesis raised before it must thus contain one or more of the factors which the Authority has determined to be the minimum which must exist, and be related to the person's service (as required by ss 196B(2)(d) and (e)). If the hypothesis does contain these factors, it could neither be said to be contrary to proved or known scientific facts, nor otherwise fanciful. If the hypothesis fails to fit within the template, it will be deemed not to be "reasonable" and the claim will fail.
4. The Tribunal must then proceed to consider under s 120(1) whether it is satisfied beyond reasonable doubt that the death was not war-caused, or in the case of a claim for incapacity, that the incapacity did not arise from a war-caused injury. If not so satisfied, the claim must succeed. If the Tribunal is so satisfied, the claim must fail. It is only at this stage of the process that the Tribunal will be required to find facts from the material before it. In so doing, no question of onus of proof or the application of any presumption will be involved.
42 The four step process adumbrated in Deledio is established by ss 120(3), 120A(3), 120B(3) and 196(B)(2) and (3) of the Act. That process is concerned with the issue whether incapacity from a disease or injury found to exist is war-caused: it is not concerned with the issue whether the disease or injury occurred. This anterior question is governed by s 120(4) of the Act. The obligation of the decision-maker was to determine Mr Bawden's claim by reference to an allegation of PTSD. Diagnosis is a process which necessarily involves examining a collection of symptoms in order to identify a disease in accordance with diagnostic criteria. The Tribunal, guided by the relevant diagnostic criteria set out in the DSM-IV, rejected a diagnosis of PTSD because it was not reasonably satisfied as a matter of fact that Mr Bawden had been exposed to a traumatic event.
43 A decision-maker is first obliged to examine the collection of symptoms of which the claimant complains to determine whether, according to the standard of "reasonable satisfaction" set by s 120(4), they constitute a disease for the purposes of entitling a veteran to a pension. The decision-maker's second task is to determine the aetiology of the disease by applying the Deledio process, which involves ascertaining whether there is a hypothesis, testing that hypothesis against the relevant Statement of Principles and turning to the facts to determine whether that hypothesis is excluded beyond reasonable doubt.
44 It may be accepted that, while a veteran must establish on the balance of probabilities that he or she suffers from "incapacity from injury or disease", the veteran is not obliged to attach a label to the injury or the disease from which the claimed incapacity is alleged to result. That having been said, where the disease propounded by the veteran as the cause of his or her incapacity is asserted to be PTSD, the issue arising from that assertion falls to be determined under s 120(4) of the Act because it is not a determination to which s 120(1) applies. That is because a traumatic event is necessary for a diagnosis of PTSD at a medical level. In Repatriation Commission v Warren [2007] FCA 866; (2007) 95 ALD 606 at [24]-[25], Kiefel J explained the two-stage process, and the legitimate use of the DSM-IV at the diagnosis stage:
[24] The function of the SoP, in general terms, is to identify the minimum factors which must be present in the circumstances of the veteran's case, to provide the necessary linkage between the disease suffered and operational service. The factors necessarily refer to the disorder in question. The principal purpose of the definition of each of PTSD and alcohol dependence is to permit a determination as to whether the SoP applies to the condition as found by the tribunal, presumably upon the basis of a clinical diagnosis. The diagnostic criteria for the disorders in the SoP are said to be "those specified in DSM-IV, and are as follows". The criteria are intended as part of the definition for the purpose of the application of the SoP.
[25] The anterior, or threshold, question for the tribunal is whether the veteran suffers from the disease as claimed. It is a distinct and separate statutory question, in the nature of a precondition to any entitlement to a pension. There is no provision of the VEA which expressly requires the tribunal to have regard to the SoP criteria in determining this question. The requirement that the tribunal be reasonably satisfied that the veteran suffers from the claimed disease will usually require medical opinion. A clinical diagnosis of a condition classified under DSM-IV would necessarily have regard to that manual and the criteria provided by it.
45 In our respectful opinion, the primary judge erred at Reasons [20] in holding that a veteran's claim for PTSD "is not to be precluded by a finding that the decision-maker is not satisfied on the balance of probabilities that the traumatic event in question occurred, made at the initial stage of the diagnosis". While there is no onus on a veteran to attach a label to the disease or injury manifest in his or her symptoms, if the disease or injury is alleged to be PTSD, the question of diagnosis is squarely raised and must be resolved.
46 The reasoning of the primary judge at Reasons [20] and [23] relies on the following passage from the Full Court in Budworth (2001) 116 FCR 200:
[19] The expression "as claimed" in s 19(7) to which Whitlam J drew attention in the passage from Benjamin which we have just cited, qualifies the whole clause to which it is attached, namely, "that the veteran suffered the injury or contracted the disease". This means, we consider, that the decision-maker has to identify the collection of relevant symptoms which he or she is satisfied constituted the disease which the veteran contracted. It is not a matter of nomenclature or attaching a traditional medical label to the collection of symptoms. That, as the conflicting expert psychiatric evidence of Dr Knox and Dr Dent on the one hand and Dr Spragg on the other, shows in relation to the label "Post Traumatic Stress Disorder", may turn on questions of causation or aetiology. Once the decision-maker has identified, to his or her reasonable satisfaction, the collection of relevant symptoms from which an applicant suffers, the question of whether those symptoms were war-caused has to be resolved by imposing on the commission the reverse onus of proof on the criminal standard in accordance with s 120(1) as qualified by s 120(3).
(Emphasis added.)
47 In our respectful opinion, this passage means that the decision-maker must be satisfied that a collection of symptoms manifests a diagnosable disease, and if it is so satisfied, it must then consider whether the illness or disease is war-caused. The point for present purposes is that PTSD can only be diagnosed as an illness or disease in terms of a traumatic event. It may be that, as Dr White suggested in his evidence before the Tribunal, there are PTSD-like diseases not falling within the DSM-IV description, such as, for example, an adjustment disorder or a depressive disorder. The decision-maker needs to consider whether the veteran's symptoms manifest any illness or disease resulting in incapacity. But, to the extent that the claim is for incapacity from PTSD and a decision-maker is not satisfied that a traumatic event produced those symptoms, the decision-maker cannot proceed to a diagnosis of PTSD.
48 The point on which the present case turns is not one of insufficient correspondence between the symptoms described in the DSM-IV and those described by Mr Bawden; rather it is concerned with the inability of the decision-maker to be satisfied that Mr Bawden suffered a traumatic stress. A diagnosis of the disorder depends on satisfaction as to the historical fact of a traumatic stress.
49 The reasons given by the primary judge for adopting his approach are not, in our respectful opinion, sufficiently compelling to overcome the settled course of interpretation. Both reasons given by his Honour involve the idea that whether a traumatic event has occurred is concerned solely with the issue of causal nexus with war service rather than diagnosis. In our respectful opinion, that is not so. A finding that a traumatic event has occurred is indispensable to a diagnosis of PTSD. Further, there is a difficulty in terms of policy with his Honour's approach in that it involves attributing to the legislature an intention that incapacity from an alleged illness or disease which is not accepted as having occurred at all, may nevertheless give rise to an entitlement to a pension for incapacity from a war-caused injury or disease. One should be slow to attribute to the legislature an intention that incapacity from an alleged illness which the decision-maker does not accept occurred at all is nevertheless compensable because it cannot be proven beyond reasonable doubt that it did not occur. The text of the Act does not warrant attributing that intention to the legislature.
50 For these reasons, we conclude that the Tribunal made no error of law in concluding that PTSD could not be diagnosed where it was not satisfied that Mr Bawden's symptoms were associated with the sampan incident.
51 As to the issues raised by Mr Bawden's notice of contention, to the extent that diagnosis involves a clinical judgment, there was opinion evidence before the Tribunal from Dr White and Dr Been to the effect that Mr Bawden suffered from PTSD associated with the sampan incident. As Dr White acknowledged in his evidence, his diagnosis of PTSD was dependent on accepting that the sampan incident was a traumatic incident. The Tribunal was not disposed to accept that the sampan incident was of that character. That decision was a decision on a matter of fact. As noted above, the appeal from the Tribunal lies "on a question of law". Where a choice falls to be made between two conclusions open on a consideration of the facts, the question is one of fact. See Commissioner of Taxation v Crown Insurance Services Ltd [2012] FCAFC 153 at [39].