Repatriation Commission v Olsen

Federal Court of Australia|2002-01-22|Before: Stone J

background and legislation 1 The applicant ("Commission") has applied to the Court under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) seeking review of a decision of the Administrative Appeals Tribunal ("AAT") made on 18 October 2000. The AAT set aside the Commission's decision (as varied by the Veterans' Review Board) that the respondent's condition of plantar fasciitis with calcaneal spur was not defence-caused, remitting the matter to it for assessment of the rate of pension payable to the respondent. 2 Mr Olsen served as a full-time member of the Defence Force between 24 September 1975 and 2 September 1994. Accordingly, Pt IV of the Veterans' Entitlements Act 1986 (Cth) ("the Act") applies to him; s 69 of the Act. Section 70 in Pt IV, Div 2 of the Act provides that the Commonwealth is liable to pay a pension by way of compensation to Mr Olsen if he "has become incapacitated from a defence-caused injury or a defence-caused disease". 3 Section 70(5) of the Act sets out circumstances in which an injury or disease is taken to be "defence-caused"; see also s 5D(2). In determining whether or not an injury or disease is "defence-caused", regard must also be had to s 120 and s 120B of the Act. The Commission is not entitled to presume that a disease or injury is defence-caused; s 120(5). Section 120(4) of the Act sets out the relevant standard of proof, being that the Commission must "decide the matter to its reasonable satisfaction." Subject to s 120B(4), s 120B(3) provides that the Commission shall be "reasonably satisfied" that an injury or disease is defence-caused only if: (a) the material before the Commission raises a connection between the injury or disease and a particular service rendered; and (b) there is in force a relevant Statement of Principles ("SoP") or a determination of the Commission, that upholds the contention that the injury or disease is, on the balance of probabilities, connected with the service rendered.

4 Under s 120B(4), s 120B(3) does not preclude the Commission being reasonably satisfied of the connection between an applicant's injury or disease and his defence service in the absence of the above factors provided that:

(a) there is no SoP determined under s 196B(3) of the Act in respect of the relevant kind of injury or disease; and (b) the Repatriation Medical Authority ("Authority") has not declared under s 196B(6) of the Act that it does not propose to make such an SoP. 5 Section 196B(3) of the Act provides: "If the Authority is of the view that on the sound medical-scientific evidence available it is more probable than not that a particular kind of injury, disease or death can be related to: (a) … (b) defence service…rendered by members of the Forces;

the Authority must determine a Statement of Principles in respect of that kind of injury, disease or death setting out:

before it can be said that, on the balance of probabilities, an injury, disease or death of that kind is connected with the circumstances of that service." Section 196B(8) of the Act provides for the amendment of SoPs: "If, after carrying out the investigation [see s 196B(4)], the Authority is of the view that there is a new body of sound medical-scientific evidence available that, together with the sound medical-scientific evidence previously considered by the Authority, justifies the making of a Statement of Principles, or an amendment of the Statement of Principles already determined, in respect of that kind of injury, disease or death, the Authority must:

(a) determine a Statement of Principles in respect of that kind of injury, disease or death under subsection (2) or (3); or (b) make a determination amending the Statement of Principles determined under subsection (2) or (3) in respect of that kind of injury, disease or death; or (c) revoke the Statement of Principles determined under subsection (2) or (3), and determine a new Statement of Principles under subsection (2) or (3) in respect of that kind of injury, disease or death;

as the case requires." 6 Divisions 3, 6 and 7 of Pt II of the Act apply in relation to Mr Olsen's claim for a pension; s 71 of the Act. If the Commission makes a decision unfavourable to a claimant, that claimant can have the decision reviewed by the Veterans' Review Board ("Board") (s 135 of the Act). If dissatisfied with the Board's decision, the claimant can apply to the AAT for a review of the decision of the Commission as affirmed or varied by the Board or, where relevant, for a review of a decision of the Board substituting its decision for that of the Commission; s 175(1) of the Act. In reviewing decisions of the Board, the AAT exercises the same powers and discretions as the Commission or the Board as the case may be; Administrative Appeals Tribunal Act 1975 (Cth)s 43(1). 7 In determining the respondent's application, the AAT considered two SoPs, Instrument No. 38 of 1996 ("the 1996 Instrument") and Instrument No. 4 of 2000 ("the 2000 Instrument"). The 1996 Instrument was in force at the time of the decisions of the Commission and the Board. The 2000 Instrument was determined in the period when the hearing before the AAT was adjourned for some months to enable the diagnosis of the respondent's condition to be clarified. 8 The AAT held that the respondent could not succeed if the 1996 Instrument applied. It noted, however, the Commission's concession that the respondent would succeed if the 2000 Instrument were applied. Accordingly, the fate of the respondent's application depended on which SoP was to be applied. The AAT applied the 2000 Instrument and stated that it was reasonably satisfied that the respondent's condition was defence-caused and remitted the matter to the Commission for assessment of the rate of pension payable to the respondent.

Keeley and Gorton 9 The only question of law raised in this application for review of the AAT's decision is which is the correct SoP to apply to the respondent's application for a pension. This was phrased differently in each party's written submissions. The Commission expressed the question thus: "When the AAT is reviewing a decision on a claim to which s 120B of the [Act] applies, is that review to be conducted by reference to the SoP in force at the time of the decision under review or by reference to the SoP in force at the time of the review?" The respondent expressed the question as follows: "When reviewing a decision which refused a claim to which s 120B of the [Act] applies, does the Tribunal have power to determine the claim by reference to a Statement of Principles…made after the time of the decision under review in circumstances where it finds that the claimant has no accrued right to pension under the Statement of Principles which was in force at the time of the decision under review…?" 10 Each of these formulations relies on an assumption. The Commission has assumed that the AAT, in any review, is only entitled to consider a claim in relation to one SoP. The respondent has assumed that the AAT has already made a decision with respect to the SoP in force at the time of the Commission's decision when it turns to consider whether to apply the SoP in force at the time of its decision. In my opinion the question is better expressed as follows: Is the AAT correct in upholding an applicant's claim where: · the AAT is reviewing the rejection of a claim to which s 120B of the Act applies; and · the applicant's claims were determined by the Commission with reference to an SoP which has since been replaced or amended; and · the AAT is of the opinion that the applicant's claim would be successful if the SoP in force at the time of review is applied? 11 Both parties conceded, correctly in my view, that, in relation to the question posed, there is no relevant distinction between this case (being in respect of defence service) and a case where the veteran has been engaged in operational service. That is, in the first bullet point above, it would be irrelevant if "s 120B" were replaced by "s 120A". This concession is also relevant to my decision in Repatriation Commission v Brown [2002] FCA 19 which was heard concurrently with this case. 12 In Repatriation Commission v Keeley (2000) 98 FCR 108 ("Keeley") the Full Federal Court considered a situation where the SoP in force at the time of the Commission's decision was more favourable than a later SoP that was determined after the applicant had lodged an application for review with the AAT. The AAT applied the later SoP and affirmed the Commission's decision to refuse a pension. The Full Court held that once Ms Keeley, the respondent in that case, had made her claim for a pension, she had, within the meaning of s 50 of the Acts Interpretation Act 1901 (Cth), an accrued right to have her claim determined by reference to the SoP in force at the time of the claim. 13 In Repatriation Commission v Gorton [2001] FCA 1194 ("Gorton"), a Full Court (Heerey, Emmett and Allsop JJ) was invited to reconsider the decision in Keeley. The Full Court declined the invitation (Heerey J at [28], Emmett J at [50], Allsop J at [61]) although Allsop J (with whom Emmett J agreed) indicated that the decision in Keeley did not accord with his own views. 14 The situation considered by the Full Court in Gorton was similar to the situation here. In Gorton the SoP in force at the time of the Commission's decision had, at the time of the hearing before the AAT, been replaced by one more favourable to the applicant for a pension. At first instance (Gorton v Repatriation Commission [2001] FCA 286), I took the view (at [24]) that the principle applied by the Full Court in Keeley was an exception to the basic principle that the current SoP should be applied; the exception, "dictated by the beneficial nature of the legislation to which the Court referred", being to preserve the benefit of an existing entitlement. In Gorton, Allsop J (with whom Emmett J agreed) expressed the principle thus: "[62] …Keeley did not decide that a SoP current at the date of the Tribunal's review undertaken pursuant to s 175 of the Act and s 43 of the AAT Act was not to be applied if it had not been in force at the time of the Commission's decision. Subsection 120A(3) makes it clearly compulsory for the Commission to examine the current SoP. In exercising the review under s 43 of the AAT Act I see no reason why the direction under subs 120A(3) does not bind the Tribunal. The only additional factor which the Tribunal must consider, if it comes to a view that the application of the current SoP leads to a conclusion that the injury, disease or death was not service caused, is that the claimant also has an accrued right to have his or her position judged by reference to the SoP in force at the date of the Commission's decision by force of the decision in Keeley.… [65] If the Tribunal, in reviewing a decision, comes to a conclusion in favour of the claimant by first applying the current SoP, the SoP current at the date of the Commission's decision (now repealed) may not need to be examined; its relevance having fallen away. However, if, by reference to the current SoP, the Tribunal is of the view that the claim should be refused, it should not do so without then assessing the rights of the parties under the accrued right recognised by Keeley: by reference to the repealed SoP. This is not a right of "election". It is a sequential approach mandated by a combination of the Act and the Full Court's decision in Keeley… [69] In any reconsideration the Tribunal should approach the question of the entitlement to the pension under the Act by reference to the SoP currently in force and, if it becomes relevant by a negative answer to the first enquiry, then by reference to the SoP in force at the time of the Commission's decision." Heerey J described how "the system operates" as follows: "[42] …Assume an SoP in force at the time of the claim is revoked by another SoP which is in force at the time of the AAT decision. The starting point is that the AAT must consider the reasonableness of the hypothesis advanced by reference to the SoP which "is in force": s 120A(3); see s 43 AAT Act. If the current SoP "upholds" the claimant's hypothesis then the AAT moves, pursuant to s 120(1), to consider whether it has been disproved beyond reasonable doubt. [43] If, however, the current SoP does not uphold the hypothesis, the claimant may then contend, pursuant to Keeley, that he or she has an accrued right under the earlier SoP. If that contention is accepted then again the hypothesis has to be disproved beyond reasonable doubt under s 120(1)." 15 As noted previously (see [8] above) the AAT held that the respondent could not succeed on the application of the 1996 Instrument but was entitled to a pension by virtue of the 2000 Instrument. On the authority of Gorton this is enough to dispose of this matter. However, as the matter has been the subject of substantive argument before me, I propose to address several of the Commission's submissions.

Commission's submission: which SoP to apply should not depend on which is more advantageous 16 The Commission had submitted that, where there are two SoPs, it is irrelevant which is more advantageous; either Keeley is correct and the SoP in force at the time of the Commission's decision should be applied, or Keeley was wrongly decided and the SoP in force at the time of the AAT's decision should be applied. As the Full Court in Gorton explained, however, both SoPs apply. An applicant before the AAT is entitled to receive a pension if he or she is entitled to do so by reference to either SoP. This is the case irrespective of which SoP is more advantageous, although, where one SoP is clearly more advantageous, the applicant may choose not to rely on the other. It should be stressed that this is not a matter of election on the part of an applicant but a matter of entitlement.

Commission's submission: legislation should not be understood as applying to past events 17 The Commission relied on the following comment by Dixon CJ in Maxwell v Murphy (1957) 96 CLR 261 at 267: "…a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events." The Commission submitted that the 2000 Instrument, being effectively new legislation, ought not to affect rights and liabilities defined by reference to "past events". The Commission submitted that, once a claim was lodged, the claimant had a "right" to have his or her claim determined by reference to the SoP currently in force and the Commission had a corresponding liability. Those rights and liabilities were said to continue to exist throughout the appeal process. It was submitted that these rights and liabilities ought not to be affected by a new SoP coming into force. 18 Nothing in Dixon CJ's comments in Maxwell v Murphy (above) suggest that new legislation may not create new rights and liabilities defined by reference to events occurring before new legislation took effect. For example, when a new SoP comes into force, all veterans gain the right to have their injuries and diseases assessed with reference to that new SoP, even though the injury or disease may have occurred in the past. What the respondent (and every other veteran) gained when the 2000 Instrument came into force was a new right to have his claim assessed by reference to that Instrument. One could argue that, in order to take advantage of this right, the respondent should have reapplied to the Commission and only then proceeded, if necessary, to the Board and the AAT. However, as indicated in cases such as Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 419 ("Drake"), to so require would be both inefficient and unnecessary because the AAT's role is to determine whether the original decision was the correct or preferable one on the material before it. The inefficiency of requiring a new application to the Commission in order to be able to rely on a new SoP is even more exaggerated because of the restriction in s 14(6) of the Act. 19 The Commission sought to cast doubt on Drake. It relied on Esber v Commonwealth of Australia & Anor (1992) 174 CLR 430 at 440 ("Esber"), where it was said that Drake was "not to the point here" because the appellant had a right to have the primary decision reconsidered and determined by the AAT under the legislative regime in force at the time of the original decision. Nothing in Gorton contradicts what was said in Esber; a veteran retains an accrued right to have the Commission's decision reviewed by the AAT by reference to the SoP in force at the date of that decision. The High Court's comments in Esber did not go so far as to suggest that, in the absence of or in addition to an accrued right, the AAT ought not consider a claim by reference to current legislation.

Commission's submission: Commission's liability ought not be affected by new SoP 20 The Commission argued that, by applying the later SoP, the AAT ignored the fact that for every right, there is a consequent liability. It was submitted that the Commission's liabilities are protected against legislative change in the same way as the respondent's rights are protected. A similar submission was answered by Allsop J in Gorton at [64]as follows: "I reject the submission of the Commission, based on the notion of the mutuality of right and obligation, that if the claimant obtains a vested right according to Keeley the Commission's position as to its liability is thereby frozen by reference to the corollary of the claimant's accrued right. This was said to be founded on the view that legislative changes are prima facie to be taken as universally neutral in not affecting either accrued rights or accrued liabilities: Drummond J in Repatriation Commission v Thompson [2001] FCA 341 [13] and see Victrawl Pty Limited v Telstra (1995) 183 CLR 595. The primary question is the intention of Parliament. In my opinion, even accepting the view expressed in Keeley that an accrued right arose to have the claim determined by reference to the SoP current at the date of the Commission's decision, the combination of (a) the nature and purpose of SoPs in seeking to apply up to date science in connection with the investigation of a causal connection which is unchanged in expression…, (b) the terms of ss 120 and 120A, especially subss 120(3) and 120A(3) of the Act and (c) the role of the Tribunal under s 43 of the AAT Act, leads me to the conclusion that Parliament did intend to have the rights and liabilities of the parties assessed by the Tribunal by reference to the SoP current at the date of the Tribunal's review, notwithstanding any accrued rights based on an earlier SoP, which may also exist." 21 I would add that it is difficult to see what pre-existing liability of the Commission has been affected. If a new "more favourable" SoP replaces a previous SoP in relation to a particular condition, additional veterans may become entitled to a pension. Except to the extent that the new SoP repeals a prior SoP, this will not affect the Commission's existing liabilities; it rather creates additional liabilities. 22 The only difference between the right gained by the respondent and the right gained by other veterans is that the respondent has already made an application to the Commission. That is, the respondent was entitled to have the AAT consider his claim by reference to the new SoP without having to make a fresh claim to the Commission. However, this is not a substantive right, but rather a procedural one. 23 It was submitted that the liability of the Commission was affected because of the different dates from which a pension would be paid. However, the date from which a pension is to be paid is a matter for the Commission and, in any event, the Commission cannot approve payment of a pension to a person from a date before the person became eligible to be granted the pension; s 20 of the Act.

Arnott and Thompson 24 The Commission referred to two recent Full Court decisions which they submitted confirm their position. The first is Arnott v Repatriation Commission [2001] FCA 262. In that case, Merkel J (at [17]) stated: "It seems to be implicit, if not explicit, in the approach of the Full Court in Keeley that a contrary intention might be found if the terms of a later SoP are more beneficial to a claimant than the terms of the SoP which it replaced. Of course, the contrary intention must be discerned from all of the terms of the later SoP and not just particular aspects of it." [emphasis in original] 25 The Commission submitted that this comment would suggest that, where there was no contrary intention in the terms of the later SoP (for example, because it was not universally beneficial), the earlier SoP would apply. What is clear from Gorton, however, is that a later SoP will apply to all claims being considered by the Commission, the Board and the AAT after it comes into force. It is possible, however, that an SoP could manifest an intention that would override the effect of Keeley. That is, an SoP could state (explicitly or implicity) that the AAT ought not to consider an applicant's claim by reference to an earlier SoP, despite the fact that the Commission considered the claim by reference to the earlier SoP. In this case, I do not need to consider whether the 2000 Instrument manifested such an intention because Mr Olsen has not sought to rely on any accrued rights. 26 The applicant also drew my attention to the following passage in the judgment of Drummond J in Repatriation Commission v Thompson [2001] FCA 341 at [13]: "I have difficulty with some of what was said by the majority in Keeley. Since legislative changes are prima facie to be taken as universally neutral in not affecting either accrued rights or accrued liabilities, I doubt that the fact that a change made in the statute law which is beneficial to a person claiming a right justifies departure from the prima facie rule since that change will, of necessity, be detrimental to the correlative liability of the person against whom the right is asserted.…I think for the reasons given by Emmett J that changes made with respect to a Statement of Principles after the Commission's determination which are more favourable to the pension claimant than the earlier Statement are accommodated within s 31 of the Veterans' Entitlements Act, rather than within a legislative intent identified in Keeley that review of a Commission determination should be in accordance with the most beneficial Statement of Principles in force at any time, if the majority in Keeley intended their comments at [46] to go that far." 27 The passages to which Drummond J refers in the judgment of Emmett J, who was also in the majority, are (at [52] - [53]): It is clear from the majority's view in Keeley's Case that the decision by the Commission of a claim could be affected by the determination of a Statement of Principles after the making of the application. It is possible, of course, that a Statement of Principles may affect an application beneficially. There is a mechanism, in s 31 of the Act, whereby that possibility may be acknowledged. Section 31(1) provides that where: · the time has not expired for making application to the Board for a review of a decision of the Commission with respect to a claim for pension in accordance with clause 14; or · an application has been made to the Board for review of such a decision but has not been determined by the Board, the Commission may, in its discretion, review that decision. Under s 31(2) where application has been made to the Tribunal for a review of a decision of the Commission that has been affirmed by the Board or a decision by the Board in substitution for decision for Commission but the review has not been determined, the Commission may, in its discretion, review that decision and, with the consent of the applicant, vary that decision. In the present case, the Commission commenced a review under s 31 in order to ensure that the Veteran would not be disadvantaged by having his claim decided before the Authority had issued a Statement of Principles. Section 120A must be construed in the light of the overall scheme of the Act, including the provisions of s 31." 28 Nothing in the comments of Emmett J suggest that s 31(2) of the Act is the only means by which a claimant can take advantage of a SoP that comes into effect while his or her AAT review is pending. In particular, Emmett J did not state that the AAT ought not to consider claims by reference to the new SoP.

Conclusion 29 For the reasons set out above the application must be refused with costs. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Counsel for the Applicant: Mr P J Hanks QC with Ms R M Henderson

Solicitor for the Applicant: Australian Government Solicitor

Solicitor for the Respondent: Legal Aid Commission of NSW

Veteran's Entitlements Act 1986(Cth)ss 69, 70, 120, 120B, 135, 175, 196B

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