ConclusionS
46 As noted above, Mr Derrington invited the Court to conclude that the AAT had simply determined, as a matter of fact, that the respondent could "do work" which, though apparently mundane, was undertaken for the purpose of generating income. He attacked the construction of cl 5(2)(b) adopted by the primary judge because of its links with a body of learning dealing with workers' compensation, an entirely different concept. That led the primary judge to focus upon the respondent's ability to find employment, rather than his ability to do work. It meant that his Honour ignored the fact that the respondent was able to undertake work, in the ordinary and natural meaning of that term, namely assisting his wife in the performance of their contractual obligations to the church school association. In effect, his Honour placed an inappropriate gloss upon the word "work" in the VE Act, and in the Determination.
47 We should say at once that we consider that neither ss 120(1) nor (3) of the VE Act, to which his Honour referred at [7] of his reasons for judgment, had anything whatever to do with the issue that presented itself for determination. It may be that his Honour's reference to those provisions related to an alternative submission that was advanced at one point, but was either abandoned, or did not have to be dealt with when it came to finalising the judgment. Nonetheless, his Honour's later reasoning that there was a "genealogical relationship" between the provisions governing invalidity service pensions and workers' compensation provisions seems to have been influenced by a mistaken belief that the respondent was claiming, in relation to cl 5(2)(b), to have suffered a war-caused injury. In truth, as has been noted, an entitlement to an invalidity service pension does not require proof of any causal link between operational service and the injury or condition that is said to give rise to the relevant incapacity.
48 Contrary to his Honour's analysis, the AAT said nothing about the respondent's condition having been war-caused. That was not an issue before it. There was no finding, explicit or otherwise, regarding that matter.
49 The workers' compensation provisions, to which his Honour referred, and from which he derived principles of construction said to be relevant cl 5(2)(b) were, in fact, dissimilar in many respects. Under workers' compensation statutes, an employee's entitlement stems from accidents occurring, or injuries sustained, in the course of employment. There must be a nexus between the employment and the injury. A person need not demonstrate such a nexus in order to qualify for an invalidity service pension.
50 The facts of the present case illustrate the difficulty that can arise in determining the limits that are to be imposed upon the term "work" in the context of the VE Act. Plainly, "work" connotes voluntary action of some kind. It may also be accepted that "work" is purposive, rather than random. However, it is by no means easy to distinguish between work and other purposive activity, much of which may be valuable. What differentiates work from play, sport, exercise, study, or leisure?
51 Mr Derrington accepted that "work", in this context, could be regarded as activity for which, in the normal course, remuneration might be paid. However, that was not a limiting principle so far as the respondent was concerned. By assisting his wife to perform their mutual obligations under the contract, for remuneration, he performed acts that had been sold in the marketplace. He was not engaged in merely personal activities.
52 There are problems with the submission that any ability to perform a remunerative task amounts to capacity for "work". On that definition, a quadriplegic who could make a voice activated response to a telephone request would be capable of doing work. The fact that someone might be willing to pay for such a service would mean that such a person was able to "do work", and probably for more than eight hours per week. Any definition of "work" that treated so severely disabled a person as able to "do work" might all but eviscerate entitlement to an invalidity service pension. It is hardly likely that this is what the legislature intended.
53 On the evidence in the present case, it would be open to conclude that the respondent could perform certain limited tasks. However, in a practical sense, it is unlikely that anyone would employ him. Such tasks, as he performed, were carried out in a sheltered environment. In essence, his wife performed nearly all of the contractual obligations owed to the church school organisation, with only occasional and sporadic assistance from him.
54 We are unable to accept Mr Derrington's submission that an invalidity service pension is only available to a person who is totally unemployable. Whether a person has the ability to "do work" is likely to depend, in part, upon that person's background, training and skills. A person may have done hard physical labour all his or her life. That person may have had only minimal education. A serious back injury may render that person incapable of doing work, whereas another person, with a different educational background, might be able to switch from physical labour to clerical duties.
55 There are other difficulties with using the marketplace definition of ability to do work. A veteran who is aged sixty-five might find it almost impossible to procure employment in circumstances where a veteran aged thirty would have little difficulty. A veteran who lives in a small rural town might be worse off, in terms of finding alternative employment, than a veteran who lives in a large capital city. Yet, their physical or mental impairment might be exactly the same. It would be odd to think that the entitlement to an invalidity service pension should depend upon matters of this kind. These difficulties are compounded by the use of the term "solely", meaning "alone", in cl 5(2)(b).
56 What is tolerably clear is that the term "work" in cl 5(2)(b) must essentially mean the same as the term "work" in ss 37(1) and 37AA. Clause 5(2)(b), being delegated legislation, cannot constrain the concept of "work" as it appears in the statute. And given that the statute uses the expression "remunerative work", it is arguable that the term "work" carries a wider meaning. It is of some significance to note that the expression in the Determination is to "do work", and not to "find work". Nonetheless, the term "work" cannot carry a meaning that is so wide as to render the entitlement to an invalidity service pension impossible to attain.
57 In our view, the expression to "do work" in cl 5(2)(b), when read in context, requires the decision-maker to focus upon the applicant, and not some hypothetical person. Consideration must be given to whether a person of the applicant's background, suffering from his or her condition, is, solely by reason of the impairment, permanently unable to do remunerative work of the type that he or she would otherwise be fitted to undertake. In answering that question, it must be determined whether the applicant can undertake such work for more than eight hours per week. In other words, the test looks at the individual applicant, treats "work" as remunerative activity, and assesses the applicant's ability to carry out that activity by reference to that person's qualifications, background and skills.
58 The test that we consider appropriate does not go as far as that seemingly applied by the primary judge. His Honour's analysis would treat an applicant as relevantly incapacitated in circumstances where that person could not readily find alternative employment. That goes too far. It imposes an unwarranted gloss upon the language used by the legislature. The correct test, in our view, does not focus upon employability, but rather the capacity to perform remunerative work of a kind for which the person is otherwise suited.
59 It will be recalled that, in interpreting the word "work" at [31] of his reasons for judgment, his Honour characterised it as "meaningful employment". He distinguished such employment from "some activity undertaken intermittently and at the applicant's own pace and … whim". It is doubtful that the adjective "meaningful" is of assistance in this context. It is difficult to conceive of "employment", whether "meaningful" or not, that would not relevantly constitute "work". Nonetheless, his Honour was correct in distinguishing between the type of activity that could amount to "work", and intermittent activity done at the applicant's own whim.
60 Where we consider that his Honour erred, however, was in equating the expressions "permanently incapacitated for work" and "permanently unable to do work" in the VE Act and the determination with the meaning given to analogous expressions in workers' compensation statutes. His Honour concluded that the aim of the VE Act was to provide an invalidity service pension where the veteran was "unable to work in employment". He construed the relevant terms in the VE Act and the determination as meaning "incapacity to earn wages". He equated those terms with a "physical inability to provide labour in the open labour market". Indeed, he said that it was plain that whether a person had a residual capacity to work was "determined by reference to labour markets reasonably available to that person". All of these formulations were taken directly from cases decided in relation to workers' compensation provisions.
61 In adopting what was in substance a test of "employability", we consider that his Honour fell into error. A test of that nature may be appropriate in the context of whether an employee who has been injured in the course of his or her employment is relevantly incapacitated, and entitled by reason of that fact to compensation. An invalidity service pension is genealogically different. It is analogous to a social security entitlement. There is no need for any link to be shown between the incapacity that the veteran now suffers, and any service that has been rendered. There is nothing to suggest that s 37(1) of the VE Act contains an implication that, in considering whether a person is "permanently incapacitated for work" regard must be had to the availability of the type of work for which that person is suited.
62 The primary judge also adopted the language of the workers' compensation cases when he referred to a workman who was in the position of an "odd lot" in the labour market. That expression is used in relation to a worker who is "fit only for special uses", and is not a "merchantable article" in the labour market. The cases establish that where an accident at work leaves a worker in that position, he or she is incapacitated unless the employer can demonstrate that there is a "customer" for the worker's services. With respect, we consider that there is no warrant for importing this notion, or any analogous concept, into the requirements for an invalidity service pension.
THE APPROPRIATE ORDERS
63 It follows that, in our view, his Honour erred in law in interpreting the relevant provisions of the VE Act and the Determination. Initially, Mr Derrington contended that if this Court were persuaded of that error, it should simply reinstate the decision of the AAT affirming the Repatriation Commission's rejection of the respondent's claim for an invalidity service pension. However, during the course of argument, Mr Derrington changed his position and conceded that this would not be an appropriate outcome. He accepted that the AAT had itself fallen into error in various ways that his Honour's reasons for judgment had exposed. That meant that the matter should be considered afresh by a tribunal differently constituted.
64 Mr Derrington submitted that the appeal should be allowed, in order to correct the primary judge's erroneous interpretation of the relevant statutory provisions. Nonetheless, he accepted that the orders pronounced by his Honour should stand, with one modification. He submitted that the appeal should be allowed, the decision of the AAT of 7 November 2003 be set aside, and the application for review of the decision of the Repatriation Commission rejecting the respondent's claim for a service pension under the VE Act be remitted to the AAT for reconsideration according to law, but not the law as expounded by the primary judge, but rather the law as expounded by this Court.
65 Mr De Marchi initially submitted that if this Court were to allow the appeal, solely in order to ensure that the law was correctly stated, it should nonetheless order that the decision of the AAT, rejecting the respondent's claim for an invalidity service pension, be set aside. He submitted that on the unchallenged psychiatric evidence, the only conclusion reasonably open to the AAT was that the respondent was unable to "do work" for the requisite eight hours per week. That is obviously a difficult argument to make, since the weight to be given to the psychiatric evidence is a matter for the tribunal of fact, and not for this Court. Recognising that difficulty, Mr De Marchi ultimately withdrew that submission.
66 In our view, Mr Derrington's concession, and his submission as to the proper outcome of this appeal, should be accepted. The AAT plainly did not have regard to the full import of the psychiatric evidence regarding the respondent's mental condition, and his ability to undertake "work" as contemplated by the legislation; it failed to take into account material that was not merely relevant, but highly probative. It would be open to the AAT, upon the totality of the evidence, to conclude that the respondent lacked the capacity to "do work" in the relevant sense. Whether or not the AAT comes to that conclusion, after giving proper consideration to that evidence, is of course a matter for it.
67 Mr Derrington acknowledged that his client had only appealed to this Court from the decision of the primary judge because it was concerned to correct an erroneous interpretation of the relevant statutory provisions. Accordingly, the case may fairly be regarded as something of a "test case". Where a public authority institutes a proceeding in order to clarify a point of law, it often undertakes, or is required to undertake, to pay the respondent's costs of that proceeding, irrespective of the outcome.
68 In our view, although the appellant has been successful, it would be inappropriate to deprive the respondent of the order for costs made by the primary judge in his favour. Given that the order remitting the matter to the AAT to be reheard and determined according to law will stand, with only slight modification, it would also be inappropriate to visit the costs of this appeal upon the respondent.
69 Indeed, this is an unusual case. The respondent, having lost before the Repatriation Commission, and again before the AAT, really had no alternative but to institute proceedings in the Federal Court in order to have his claim properly considered. He succeeded before the primary judge, and he has succeeded again before this Court (albeit for different reasons), in having the AAT's decision set aside. Notwithstanding the fact that the appellant has had a measure of success on the appeal, we consider that it should pay the respondent's costs. The order for costs made below should stand.
I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Wilcox, French and Weinberg.