Repatriation Commission v Van Heteren

REASONS FOR JUDGMENT 1 This appeal from a decision of the Administrative Appeals Tribunal in a matter arising under the Veterans' Entitlements Act 1986 (Cth) ("the Act") raises a narrow but important issue. It can be put relatively shortly. 2 One of the conditions to be satisfied before a veteran receiving a disability pension at the 100 per cent general rate can be granted a pension at the special rate under s 24 of the Act is that: "s 24(1)(c) The veteran is, by reason of incapacity from … 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." 3 Mr Van Heteren ceased to engage in remunerative work in December 1992 when the factory in which he had worked closed down. He had previously sustained a significant and enduring work-related shoulder injury. That shoulder injury was a factor in his being unable to obtain a new welding position in 1993. By December 1998 he was in receipt of a pension under the Act assessed at 100 per cent on account of accepted war-caused conditions. He applied for a special rate pension under s 24 of the Act on 2 November 2000. This was rejected by the Repatriation Commission. That rejection was affirmed by the Veteran's Review Board on 22 May 2001, the Board finding that the veteran did not satisfy the so-called "alone" test of s 24(1) as both war-caused and non war-caused disabilities prevented him from obtaining or continuing in paid work. He applied to the Tribunal for review. 4 After the Board Hearing but before the Tribunal's hearing, the Repatriation Commission accepted that the veteran now had the further war-caused disability of ischaemic heart disease. The Tribunal held that that new condition alone prevented the veteran from continuing to engage in remunerative work for the purposes of s 24(1)(c). 5 The short question raised is whether, for the purposes of making its s 24 assessment of the veteran, the Tribunal could disregard the factors that may have prevented the veteran from continuing to engage in remunerative work at and from the time he ceased work notwithstanding that the ischaemic heart disease disability was later accepted. 6 The applicant, the Repatriation Commission, contends that account must be taken of such factors as they bear on the questions (a) whether incapacity from war-caused disabilities alone prevented the veteran from continuing to undertake remunerative work that the veteran was undertaking; and (b) whether the veteran is suffering a loss of income that he or she would not be suffering if free of that incapacity. 7 The respondent's submission is that the Tribunal was required to make its s 24(1)(c) determination during the "assessment period" which ran in this matter from 2 November 2000 until the date when Mr Van Heteren's claim was determined. That is what the Tribunal did and why it gave the ischaemic heart disease the prominence it did. 8 The Tribunal's actual decision (to which I will refer below) also raises a number of ancillary issues. These are the product of apparently inconsistent findings, gaps in findings and some opacity in reasoning. The Tribunal's Decision 9 The Tribunal noted that Mr Van Heteren had served in the Australian Army and had operational service. At the time of the hearing he had "shrapnel wound right thigh, post traumatic stress disorder, with alcohol abuse, gastro-oesophageal reflux disease, diabetes mellitus, and ischaemic heart disease" accepted as war caused disabilities. 10 On discharge from the Army, Mr Van Heteren's evidence was that (i) he obtained employment as a fibrous plasterer for about eight months; (ii) he worked with General Motors Holden ("GMH") as a welder for six years; (iii) he then worked again as a fibrous plasterer in the building industry; (iv) in 1980 he joined Bridgestone Tyres; (v) two years later he resumed work as a fibrous plasterer; (vi) in 1987 he unsuccessfully attempted to find a job in the hospitality industry but then worked for two years as a welder; (vii) in 1990 he began work with British Tube Mills ("BTM") as a welder; (viii) in 1992 he had a problem with his right shoulder, had time off work, and later took up light duties on his return to BTM; (ix) BTM offered him a job as a guillotine worker but he rejected it because of his shoulder; (x) he was subsequently made redundant; (xi) he sought work and took courses but "[d]espite numerous efforts to find work he has been unable to find work since BTM"; (xii) he did voluntary work at his local soccer club but he ceased this "as he got stressed out and … people annoyed him"; (xiii) he agreed his heart disease restricts the type of work he can perform; and (xiv) because he is "careful with what he does" he does not have any difficulties with his right shoulder. 11 The Tribunal then paraphrased the reports of five medical practitioners who had either treated or examined Mr Van Heteren. One, a general practitioner, characterised Mr Van Heteren as too aggressive for any job. A medical registrar considered that his heart disease would restrict the type of work he could perform in the future. A consultant occupational physician stated that Mr Van Heteren was incapacitated for all work because of the accepted conditions of cardiac disease and post traumatic stress disorder. A psychiatrist considered that Mr Van Heteren was incapacitated for undertaking remunerative work for more than eight hours per week only because of his post traumatic stress disorder and alcohol dependence. 12 Having noted the parties' submissions and the concession that, in Mr Van Heteren's case, the requirements of s 24(1)(a) and (b) of the Act had been complied with, the Tribunal turned to s 24(1)(c) which it said, correctly, had to be read in conjunction with s 24(2). Having accepted that the applicant was a truthful witness, the Tribunal stated its conclusions in the following paragraphs: "44. The Tribunal is satisfied that all of the accepted disabilities except for the ischaemic heart disease have had a marked affect on the applicant. The applicant was at the time of this hearing in receipt of the Service Pension at 100% of the General Rate. The accepted disability of the ischaemic heart disease did not arise until after the VRB hearing and prior to the hearing before this Tribunal. Without that additional accepted disability the Tribunal is satisfied that the applicant's chances of succeeding before this Tribunal would be remote. The applicant being in receipt of the Service Pension at 100% of the General Rate was so assessed on the basis of the then accepted disabilities. 45. The Tribunal is satisfied and finds that the applicant ceased employment with BTM when it ceased to operate. Due to the collapse of BTM, notwithstanding the shoulder condition of the applicant, he was given a redundancy package. He has not worked since that time in paid employment but only in a volunteer capacity with the soccer club. Even this part-time volunteer work was short-lived and he ceased this due to a falling out with officers there as a result of his aggressive and abusive manner. Whilst little credit was given to the applicant in his subsequent endeavours to find employment and also through undertaking a number of courses to enable him to develop skills to assist him in finding employment, the Tribunal is satisfied that the applicant is not what can be described as a "malingerer" but is to be commended for trying to be a useful member of the community. Very few applicants before this Tribunal make the same efforts as this applicant. 46. The vexed issue before this Tribunal is whether or not it applies the alone test as at the time the applicant ceased work with BTM in about 1992 brought about by its collapse. In the alternative the date of the applicant's lodging his application on 2 November 2000 as the date of effect. To add to the situation the subsequent ischaemic heart disease was accepted with effect from 27 November 2001. The Tribunal on the law has no difficulty in rejecting the date of effect being in 1992 or thereabouts. 47. The Tribunal, if satisfied that the applicant satisfies the alone test must then decide whether the date of effect is 2 November 2000 or 27 November 2001. This in fact was agreed upon by the parties at the outset of this hearing and the Tribunal is satisfied that such is the case. The Tribunal needs to satisfy itself as to whether or not the applicant fulfils the two parts of the above test. Firstly to decide if the applicant's accepted conditions including the ischaemic heart disease alone prevent him from working and from undertaking remunerative work. Secondly, whether or not there are any other factors that play a role in preventing him from working or that contributed to him ceasing work. 48. The Tribunal is satisfied and finds on the whole of the evidence before it including the medical evidence that the applicant ceased work solely due to his accepted disabilities but in particular due to his post traumatic stress disorder with alcohol abuse. If the Tribunal were left only with this factor then the applicant could not succeed as all of these have been considered by the VRB when affirming the decision of the respondent. However, this Tribunal also takes into account the affect that the ischaemic heart disease has on the applicant's ability to work or to continue to be incapacitated for work solely due to his accepted disabilities which now includes the said heart condition. 49. The Tribunal is satisfied that the date of effect is assessed at 2 November 2000 then the applicant fails to satisfy the requirements of section 24 of the Act. However, the Tribunal is satisfied that the medical evidence before it clearly supports the fact that by reason of the ischaemic heart disease alone, the applicant is prevented from continuing to engage in any remunerative work. Accordingly, the Tribunal finds that the applicant satisfies subsection 24(1)(c) of the Act. 50. In light of this finding, and with the respondent conceding subsections 24(1)(a) and 24(1)(b) of the Act, the Tribunal finds that the applicant is qualified to receive pension at the Special Rate as and from 27 November 2001." Conclusions on the Application 13 I should state at the outset that there is a deal that is contradictory and confusing in the passages quoted above. One need only refer to the apparent internal inconsistencies in par 48. It is fair to say that a consequence of this is that at the hearing before me some debate did centred upon what actually was being found by the Tribunal. I would note (without quoting it) that one of the Commission's grounds of appeal appears to be born of that uncertainty. 14 Be the above as it may, this is an application that must be allowed. The Tribunal, in my view, simply has not engaged with the requirements of s 24(1)(c) of the Act and has not made the findings and has not engaged in the reasoning process necessary to sustain its conclusion. 15 There is now very considerable judicial exegesis of the proper approach to be taken to the application of s 24(1)(c). The four questions endorsed by the Full Court in Flentjar v Repatriation Commission (1997) 48 ALD 1 at 4-5 express the burden of that approach: see eg Forbes v Repatriation Commission (2000) 101 FCR 50 at 54. Those questions are: "1. What was the relevant "remunerative work that the veteran was undertaking" within the meaning of s 24(1)(c) of the Act? 2. Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work? 3. If the answer to question 2 is yes, 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? 4. If the answers to questions 2 and 3 are, in each case, yes, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?" 16 It is true, as counsel for the respondent emphasises, that these questions do not have statutory force. But it is equally true, as counsel for the Commission contends, that (i) the Tribunal did not answer expressly, or probably at all, the first question; (ii) its finding that war-caused conditions prevent him from continuing to engage in any remunerative work would satisfy as an answer to the second; (iii) the third question probably has not been evaluated in the manner dictated by the cases and most notably by Repatriation Commission v Hendy [2002] FCAFC 424 at [37] and Forbes case at [40]; and (iv) no explicit consideration was given to the considerations relevant to answering the fourth question. 17 Because I am in general agreement with the Commission's contentions, I do not intend to set out in detail the various submissions advanced by the parties. Rather, I will state shortly why I consider that the failure to engage with the substance of what is required by s 24(1)(c) obliges me to set aside the Tribunal's decision. 18 First, the "remunerative work" to which the paragraph refers is the remunerative work undertaken by the veteran before he or she was prevented from continuing to undertake that work. The term, though, does not refer simply to a particular job with a particular employer: Banovich v Repatriation Commission (1986) 69 ALR 395 at 402; nor merely to the last remunerative work undertaken before the veteran's inability to work became complete: Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225. It signifies the type of work which the veteran previously undertook but which because of war-caused incapacity alone he or she can no longer undertake: Banovich at 402. The Act requires identification of that type of work as part of the veteran's demonstration that he or she has suffered a real and substantial loss consequent alone upon war-caused incapacity: see Starcevich's case, at 225. It is that remunerative work and not remunerative work at large with which s 24(1)(c) is concerned. 19 The Tribunal did not make any positive finding as to the type(s) of work Mr Van Heteren previously undertook seemingly because it found he was prevented from continuing to engage in any remunerative work. The significance of the failure to deal with the particular type(s) of work previously undertaken by Mr Van Heteren becomes apparent when one turns to consider both limbs of s 24(1)(c) (ie the third and fourth Flentjar questions). 20 Secondly, as the Commission conceded, Mr Van Heteren was totally and permanently incapacitated for the purposes of s 24(1)(b). His incapacities from war-caused disabilities alone were such as to render him incapable of undertaking remunerative work for periods aggregating more than eight hours per week. Section 24(1)(c) presupposes he is so incapacitated such that the veteran cannot simply point to it without more to satisfy the two limbs of s 24(1)(c). The reason why this is so is that factors other than war-caused incapacity may be part of the reason preventing the veteran from continuing to engage in the particular type of work in which he or she had previously been engaged: Forbe's case at [39]-[40]. 21 The Tribunal found that Mr Van Heteren ceased work after being made redundant by BTM in 1992. Equally, the Tribunal appears to have accepted the Veterans' Review Board conclusion that, if Mr Van Heteren was assessed prior to acceptance of the ischaemic heart disease condition, he could not have satisfied s 24(1)(c) of the Act: see reasons, pars 44, 48 and 49. The Board had accepted that he had a number of non war-caused disabilities ("a right shoulder injury, a low back problem and right elbow and wrist strain"). Its finding was that: "while the veteran's accepted disabilities have a more substantial effect than his non war-caused disabilities in preventing him from obtaining or continuing in paid work, both contribute to his loss of earnings." 22 In Hendy's case the Full Court observed at [37] that: "The language of s 24(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. If a period of time elapses after a veteran ceases remunerative work and before the commencement of the assessment period, lack of recent work experience, time out of the workforce and increasing age will be relevant for consideration under s 24(1)(c) of the Act. The decision-maker is required to consider the effect, contribution to, and relative weight to be attached to any or all of those factors during the assessment period. So long as the Tribunal performs this exercise, the conclusions drawn from the assignment of the relative impact the various factors on the ability of the veteran to continue in remunerative work is not reviewable, except in exceptional circumstances. Moreover, having considered any or all of the factors which may have contributed to a veteran's incapacity, the Tribunal is then required to determine whether it is the veteran's war-caused injury or war-caused disease, or both, alone which prevent the veteran from continuing to undertake remunerative work. Error on the part of the Tribunal is determining whether the veteran's war-caused injury or war-caused disease is the sole determinant in the prevention of continued remunerative work is, similarly, not open to review." Emphasis in the original. 23 Unfortunately the Tribunal's reasons do not reveal its understanding of the inquiry it was to undertake in applying s 24(1)(c). However, in light both of its apparent acceptance of the Board's finding that Mr Van Heteren had non war-caused disabilities that had some effect in preventing him from continuing to engage in remunerative work, and of its later disregard of that, it can only be said that the Tribunal misapprehended the task before it and fell into error in consequence. 24 The Tribunal seems to have said (a) that the heart condition alone prevented Mr Van Heteren from continuing to engage in any remunerative work (seemingly of any kind); and (b) therefore, that that condition alone prevented him from continuing to engage in the type(s) of work in which he was previously engaged without giving any consideration to whether other factors (eg non war-caused conditions) might not have been part of the reason preventing him from so continuing to engage in that work. The Tribunal, in my view, assumed that which had to be determined as a matter of practical judgment: Cavell v Repatriation Commission (1988) 9 AAR 534 at 539; and for this reason its decision must be set aside. Mr Van Heteren's heart condition alone may have been sufficient to prevent him from continuing to engage in his previous remunerative work. But it may not necessarily have been the only reason preventing him from so doing: see generally Hendy's case; Forbe's case; and cf Moorcroft v Repatriation Commission (1999) 29 AAR 482 at [19]-[21] which cannot be regarded as now correct in light of Flentjar and Hendy. The Tribunal did not consider that question even though it was aware of Mr Van Heteren's non war-caused disabilities and of their earlier significance in preventing him from continuing to engage in remunerative work. 25 Finally, the second limb of s 24(1)(c) (ie the fourth Flentjar question). If the Tribunal has found that the "alone" test is satisfied it must then determine if the veteran was suffering a loss of income that he or she would not be suffering if free from war-caused incapacity. This question is not answered simply by finding that, in the assessment period, the veteran is unable to engage in any remunerative work. It in fact presupposes that he or she may well not be: cf s 24(1)(b). And because of the deemed "no loss" provisions of s 24(2)(a)(i) which apply where the veteran has ceased to engage in remunerative work for reasons other than his or her war-caused conditions, it requires an examination of the reasons why the veteran ceased work. 26 In the present matter the Tribunal found (at par 45) that Mr Van Heteren ceased employment with BTM when it ceased to operate and that he had not worked since that time in paid employment but only in a volunteer capacity. It later found (at par 48) that he ceased work "solely due to his accepted disabilities but in particular due to his post traumatic stress disorder with alcohol abuse". How these two findings sit together is not easy to discern unless the par 48 reference to "work" is a reference to "voluntary work". Such a finding was clearly open on the evidence but it would be without consequence as s 24(2)(a)(i)'s concern is with the veteran's ceasing to engage in remunerative work. 27 Given the conclusion I have already reached that the Tribunal's decision must be set aside, it is unnecessary to reach a conclusion on whether the Tribunal has not had regard to the considerations relevant to answering the fourth Flentjar question. For present purposes I will merely indicate that its reasons rather suggest that it has not. The two findings to which I have referred are emblematic of the problems the reasons raise in relation to this matter. 28 I will order that (i) the application be allowed; and (ii) the decision of the Tribunal be set aside and the matter be remitted to the Tribunal to be heard and determined again. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.