Repatriation Commission v Watkins

REASONS FOR JUDGMENT THE COURT: 1 This is an appeal from the judgment of a single judge of the Court, allowing an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of the Administrative Appeals Tribunal. The effect of this judgment was to set aside the decision of the Tribunal, which had affirmed a decision of the Veterans' Review Board affirming the appellant Commission's decision to refuse to increase Mr Watkins' pension beyond 100 per cent of the general rate. Having considered the parties' written submissions and further submissions made on Mr Watkins' behalf at the hearing, the Court made orders that day, including an order dismissing the appeal. The Court stated that it would deliver its reasons shortly thereafter. The following are the reasons of the Court for the orders made on 9 February 2015. 2 Mr John Watkins is a veteran who served in the Royal Australian Navy for nine years, including during the Vietnam War. 3 As at July 2009, Mr Watkins was in receipt of a service disability pension at 100% of the general rate, under s 22 of the Veterans' Entitlements Act 1986 (Cth). The pension was paid by reason of multiple medical conditions that he suffered, of which bilateral sensorineural hearing loss with tinnitus, osteoarthritis of the right ankle and foot, solar keratosis, post-traumatic stress order (PTSD) and alcohol dependence had been accepted by the Repatriation Commission as having been "war-caused". 4 On 31 July 2009, shortly before his 64th birthday, Mr Watkins applied to the Commission for his pension to be paid at a higher, special rate provided for by s 24 of the Act. 5 Section 24(1) makes provisions for the payment of a special rate as follows: 24 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; and (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 (ii) the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and (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 (d) section 25 does not apply to the veteran. 6 Section 24(1)(c) is effectively qualified by the terms of s 24(2), which provides as follows: (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. 7 Because he was not yet 65 years of age when he applied for the special rate of pension, these provisions, rather than ss 24(2A) and (2B), applied to his application. 8 On 29 October 2009, the Commission decided that Mr Watkins was not eligible for a special rate of pension and so his rate of pension should remain at 100% of the general rate. In so deciding, the Commission had regard to the terms of s 24(1)(c), and considered Mr Watkins did not cease work due to his accepted "war-caused" disabilities alone. 9 Mr Watkins then sought review of the Commission's decision by the Veterans' Review Board (VRB), but it agreed with the Commission and dismissed the review application. 10 Mr Watkins then sought review of the decision of the VRB in the Tribunal. 11 The Tribunal, in dismissing the review application and finding that a special rate of pension was not payable, focussed on the s 24(1)(c) requirement and addressed three questions: (1) Is Mr Watkins unable to work for more than eight hours per week? (2) When and why did Mr Watkins stop working? (3) Did Mr Watkins' accepted war-caused conditions alone prevent him from working? 12 The Tribunal noted that the parties agreed, on the basis of medical advice, that Mr Watkins was unable to undertake remunerative work for more than eight hours per week. 13 The Tribunal noted that Mr Watkins' doctor recommended in May 2005 that he should stop working; but that he was able to use his accumulated sick leave, long service leave and an available insurance plan before officially stopping on 24 June 2008. At this point, his work was with the Melbourne Metropolitan Fire Brigade as a firefighter and station officer, with both management and operational responsibilities. 14 The Tribunal noted that Mr Watkins stated that, during the late 1990s, he had problems with his right ankle and foot and his hearing deteriorated. In October 2004, he underwent surgery for an acoustic neuroma and was off work until February 2005. He resumed full time work for the next three months. His hearing deteriorated further and he was finding it difficult to hear clearly in the fire truck. He said his ankle was also troubling him in terms of getting in and out of the fire truck. 15 Mr Watkins indicated that he had earlier left the Navy in November 1972, having enlisted relatively soon after leaving school at the age of 14, and having served for nine years, which included operational service. 16 The Tribunal, noting the agreement of the parties, first accepted that Mr Watkins met the requirements of ss 24(1)(a)(i) and 24(1)(b). However, the parties disagreed as to whether Mr Watkins met the requirements of s 24(1)(c) of the Act. 17 As to whether s 24(1)(c) was satisfied, the Tribunal proceeded to determine that question by considering four questions posed by Branson J, in Flentjar v Repatriation Commission [1997] FCA 1200; (1997) 48 ALD 1 at 4-5, namely: 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? 18 As to question 1, the Tribunal found that the remunerative work was as a firefighter and station officer, which involved both management and operational responsibilities. 19 The Tribunal accepted that Mr Watkins was prevented from working more than eight hours per week due to his accepted war-caused disabilities, so the answer to question 2 was yes. 20 As to question 3, the Tribunal said there were, however, also other factors to be taken into account in relation to his employability apart from his accepted war-caused conditions. In that regard, the Tribunal noted what Nicholson J had said in Forbes v Repatriation Commission [2000] FCA 328; (2000) 101 FCR 50 at 57 [39]-[40] and what Spender J had said in Repatriation Commission v Alexander [2003] FCA 399; (2002) 75 ALD 329 at 334 [22]. 21 After reviewing the medical evidence provided to the Tribunal and other evidence considered relevant given by Mr Watkins, and submissions made on his behalf, the Tribunal was not satisfied that Mr Watkins' accepted war-caused disabilities were the only factors preventing him from working for more than eight hours per week during the assessment period. The Tribunal found that his health issues at the time he commenced extensive leave in May 2005, included chronic headaches and ataxia, which were not accepted conditions. Further, the Tribunal found that his hearing was slightly worse than it had been previously, namely a total loss in one ear as the result of his surgery for the acoustic neuroma, noting, however, that Dr Horsley and Dr Sillcock stated that the audiometric reports they had seen indicated that his hearing overall was not much worse than previously was the case. The Tribunal noted that they had expressed surprise that he would have been able to continue working with a hearing problem of that magnitude. 22 The Tribunal found it unlikely that a person with Mr Watkins' health history would be employed as a firefighter. He was almost 64 years of age at the beginning of the assessment period. It was then four years since he had actually worked as a firefighter. The Tribunal noted there are onerous physical requirements for those working as firefighters as well as medical standards to be met. It also noted that: An examination of [his] medical history, which included the chronic headaches and ataxia at the time he stopped working with those conditions continuing for some time thereafter would be likely to rule him out of such a role, as would his accepted disabilities. His age and time out of the workforce would also be likely to rule him out of reappointment to a similar role. 23 Thus, the Tribunal said that the answer to the third question was no. (In those circumstances, there was no need to answer question 4.) 24 The Tribunal expressly found that Mr Watkins ceased work as a firefighter due to his accepted disabilities but also due to his headaches and ataxia. As a result, it found that he failed to satisfy s 24(2)(a) of the Act. The Tribunal also said he did not claim to meet, nor did the evidence show that he met s 24(2)(b) of the Act. 25 The Tribunal ultimately found that Mr Watkins failed to meet the criteria in s 24(1)(c) of the Act and he was therefore not eligible for a special rate of pension. In the course of its analysis, the Tribunal observed that Dr Rosenhain, in his report and clinical notes, had stressed that none of the medical certificates he issued gave the cause of his patient's inability to work as anything other than his accepted war-caused conditions. The Tribunal stated, however, that the issue in dispute was not whether Mr Watkins' accepted conditions were sufficient to stop him working for more than eight hours. Section 24(1)(b) of the Act had been met. The Tribunal said that in Alexander it was pointed out that the decision-maker is required to determine if there are any other factors that also impacted on Mr Watkins' ability to continue to work, to determine if he met s 24(1)(c). 26 Mr Watkins then appealed to this Court under s 44(1) of the Tribunal Act against the decision of the Tribunal, raising six questions of law: (1) Was the Tribunal required to apply s 24(2)(b) of the Act to the veteran's claim? (2) Did the Tribunal have regard to all relevant factors when applying s 24(2)(b)? (3) Was the Tribunal required to provide adequate and sufficient reasons for its application of s 24(2)(b)? (4) Was the Tribunal required to "include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based" pursuant to s 43(2B) of the Tribunal Act in purporting to apply s 24? (5) When applying s 24(2)(a), did the Tribunal misinterpret the meaning of the statutory phrase "ceased to engage in remunerative work"? (6) Did the Tribunal err in law in taking into account irrelevant considerations and failing to take into account relevant considerations with respect to its application of s 24? (7) Did the Tribunal correctly interpret and apply the "alone test" in s 24(1)(c) of the Act? (8) Was the Tribunal's finding that Mr Watkins did not meet the "alone test" irrational or illogical? 27 The primary judge allowed the appeal on the basis that the Tribunal had misconstrued s 24(1)(c) of the Act and rejected all other grounds of appeal. See Watkins v Repatriation Commission [2014] FCA 787. After an extensive review of authority on the proper construction of the s 24(1)(c) criteria, his Honour considered, at [46], that "where a veteran suffers from both war-caused ailments and non war-caused disabilities, … the correct approach to the 'alone' element posed by the first causative limb of the s 24(1)(c) criteria is to ask whether, putting aside the veteran's war caused ailments and their consequences, the veteran's non war disabilities prevent the veteran from continuing to undertake the remunerative work that the veteran was undertaking". His Honour said that, if the answer to that question is yes, it will follow that the veteran's war-caused ailments are not the only cause, and are not "alone" in preventing the veteran from working. In that case, the s 24(1)(c) criteria will not be satisfied. Alternatively, his Honour said, if the answer is no, it will follow that the veteran's war-caused ailments are the only cause preventing the veteran from working and so the first causative limb of the s 24(1)(c) criteria will be satisfied. 28 The primary judge, at [50], considered it was clear from the reference made to Alexander, that what the Tribunal turned to consider was whether the existence of "non war factors" had impacted upon the veteran's ability to work, rather than the proper question of whether the non war factors had caused that inability. 29 The primary judge also noted, at [52], that the Tribunal's ultimate finding, on the third Flentjar question, was that it was unlikely that "a person with Mr Watkins' health history would be employed as a fire fighter". His Honour said that the reference to "health history" was an obvious reference to the combination of his war-caused and his non war-caused ailments and the making of that finding was consistent with what the Tribunal's reasons otherwise revealed about its construction of s 24(1)(c). In his Honour's view, this confirmed the error, which he had earlier identified. 30 The primary judge, at [54], rejected a further submission made by the Commission that, even if the Tribunal misunderstood the "alone" element of s 24(1)(c), its reasons revealed that it did in fact isolate Mr Watkins' non war-caused disabilities and determined that those disabilities of themselves prevented him from working as a firefighter. 31 The primary judge also dismissed the appeal to the extent that it relied on the other questions of law identified above. 32 The Commission now appeals against the decision of the primary judge on the basis that the primary judge erred: (1) in the construction of s 24(1)(c) of the Act, by holding that non war-caused disabilities will only be a disqualifying factor if they, of themselves and independently of the war-caused ailments, would prevent the veteran from undertaking the relevant work. (2) in holding that, where a veteran suffers both war-caused and non war-caused disabilities, non war-caused disabilities will only prevent the veteran from meeting the "alone" test in s 24(1)(c) if the non war-caused disabilities, of themselves and independently of the war-caused ailments, would prevent the veteran from undertaking the relevant work. (3) in that his Honour should have held that a veteran who is affected by non war-caused disabilities which contribute, in combination with the veteran's war-caused ailments, to cause the veteran's incapacity to undertake the relevant work, fails to meet the requirement in s 24(1)(c) that the veteran's war-caused ailments alone prevent the continuance of work. 33 The primary issue on the appeal therefore is whether the primary judge erred in the construction he gave s 24(1)(c).