Repatriation Commission v Woodall

Federal Court of Australia|2015-11-20|Before: Tracey J

REASONS FOR JUDGMENT 1 This appeal from the Administrative Appeals Tribunal ("the Tribunal") raises a number of issues relating to the construction and application of s 24 of the Veterans' Entitlements Act 1986 (Cth) ("the Act"). The Tribunal determined that Mr Woodall was entitled to a payment of a pension at the special rate with effect from 29 July 2010. 2 The appeal is brought on questions of law pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). 3 Mr Woodall is an Army veteran who suffers from a variety of war-caused injuries including generalised anxiety disorder ("GAD") and the displacement of an intervertebral disk. These conditions have been found to affect his ability to obtain and retain employment. There is no dispute that Mr Woodall is entitled to a pension under the Act. There has, however, been a long and ongoing dispute between the parties as to whether Mr Woodall's pension should be paid at the special rate or the general rate. That history is recounted in the Tribunal's decision and need not be repeated: see Woodall v Repatriation Commission [2015] AATA 163 at [1]-[10]. 4 As already noted the Tribunal determined that Mr Woodall was entitled to be paid a pension under the Act at the special rate. In doing so it relied on s 24 of the Act. 5 Relevantly s 24 provides that: "(1) This section applies to a veteran if: (aa) … (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 … (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."

the tribunal's decision 6 The evidence before the Tribunal was, to a large extent, uncontroversial. Mr Woodall had, for some 11 years, been employed as a warehouse manager. In October 2008 his position was made redundant and his employment was terminated. Between October 2008 and September 2009 he had applied for about 70 jobs which he had seen advertised in newspapers. He had received only five responses. Of these five only three prospective employers invited him to attend for interview. 7 Mr Woodall gave uncontested evidence that he had performed badly during these interviews. He told the Tribunal that: "… I had difficulty focusing due to concentration issues which relate to my anxiety disorder. I did not respond well to questions in the interview situation. Additionally, I disclosed to the potential employers my back problems after I was questioned on whether I had medical issues. It is my belief that my back condition was a significant reason why I was not offered employment by those who interviewed me. I also believe that my inability to interview well was also a real factor." 8 After one of the interviews he was invited to inspect the company's warehouse. His attention was drawn to the physical environment in which he would perform work and he was told that that work would involve lifting heavy items from floor level. At that point he disclosed that he had "back problems". Shortly thereafter he was told that the company was looking to engage a younger person and that he would not be offered the job. 9 The Tribunal referred to the decision of the Full Court of this Court in Smith v Repatriation Commission (2014) 220 FCR 452 at 456 (Rares J) and 490 (Foster J) where their Honours identified three requirements which had to be satisfied in order for a veteran to have the benefit of the ameliorative provisions of s 24(2)(b) of the Act. They were that: • the veteran must have been genuinely seeking to engage in remunerative work; • but for incapacity by war-caused injuries, the veteran would be continuing to seek to engage in remunerative work; and • the war-caused incapacity is the substantial cause of his inability to obtain remunerative work. 10 The Tribunal found that the first two of these requirements had been satisfied. These findings are not challenged on appeal. 11 The Tribunal also found that the third requirement had been satisfied. In doing so, the applicant Commission contends, it fell into error. 12 That error was said to have been exposed in the Tribunal's reasons. Those reasons need to be read as a whole and fairly. It will, therefore, be necessary to have regard to a significant part of those reasons when dealing with this allegation of error. In doing so the Court must not be overzealous in seeking to discern error: see Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287. 13 The Tribunal noted (at [47]) that Mr Woodall had worked for many years despite the incapacitating back pain from which he suffered. Following the termination of his employment he continued to seek work despite his physical injury. He was emotionally volatile, a condition which "was attributable to his GAD and a reaction to his persisting back pain …" (at [48]). 14 The Tribunal then continued: "57. The remaining issue is whether the incapacity was the substantial cause of his inability to obtain remunerative work. 58. The language of s 24(1)(c) would appear to contemplate the potential entitlement to special rate pension in the circumstances of a veteran who was employed but was prevented from continuing that employment by incapacity from war-caused injuries alone. Section 24(2)(b) appears to contemplate the circumstances of a veteran who has not been working and has been seeking work but the substantial cause of him being unable to obtain it is the incapacity by the war-caused injuries. If that is established, he is deemed to be prevented from continuing to undertake work. 59 The apparent distinction therefore between those provisions is the former enquires into whether the incapacity by war-caused injuries alone prevented the veteran from continuing to work whereas the latter provision enquires into whether the incapacity by war-caused injuries was the substantial cause of an inability to obtain work. 60. Section 24(2)(b) is often referred to as an ameliorative provision, because in the absence of having to satisfy the alone test provisions of s 24(1)(c), if the war-caused injuries are the substantial cause of an inability to obtain work, the veteran is deemed to be prevented by incapacity from continuing to undertake remunerative work that was previously undertaken. 61. In the circumstances of this application, the respondent contends that the applicant cannot establish that the substantial cause of his inability to obtain work was his war-caused injuries. It was put that in the absence of 67 potential employers to whom he applied being aware of his war-caused injuries, it cannot be found that those injuries were the substantial cause of an inability to obtain work. 62. The material before the Tribunal does point to the other three employers to whom the applicant applied rejecting him because of his injuries. When those injuries did become known to them during interviews, any prospect of employment with them became fatal. I concede that neither of them said words to that effect, however his emotional state during interview on two occasions, by reason of his GAD and disclosure of his back injury does raise a reasonable inference that his war-caused injuries were a substantial cause of his inability to be engaged by those employers. That is so because his prior work experience and qualifications were of some attraction to those employers because they responded to his application and did interview him. 63. The persons at the Epping Furniture went one step further and showed him through their premises, however when he was told that there was an expectation of him having to lift from floor level and the applicant indicating he would not be able to perform that work because of his back injury, he was told by those persons that they would prefer to engage a younger person. I think that response should be treated with some suspicion. 64. It was contended on behalf of the respondent that it should not be found that the applicant was unsuccessful in that application because if that potential employer was truly looking to engage a younger person, the applicant would not have been shown through the warehouse. 65. There may be some force in that contention however on balance, it could also be contended, and I will make this finding, that the communication to the applicant that he would not be engaged because a younger person would be preferred, could have been expressed before the tour of the workplace occurred. I think it is no coincidence that the potential employer notified the applicant that a younger person would be preferred at the time the applicant was told he would be required to lift from floor level, also at about time the applicant disclosed that he had a back injury. 66. I am also satisfied that it may reasonably be inferred that the experience of the applicant on those three occasions is indicative of the likely outcome, had he been interviewed elsewhere. 67. Other employers might have preferred to engage a younger person, or a person who possessed skills that may readily be adapted to the proposed work (that the applicant did not have), so far as it might have been gleaned from his written application. Additionally, the applicant may have faced competition amongst many other persons who applied for the same position. But it does not follow that those reasons individually or in combination were the substantial cause of his inability to obtain remunerative work. 68. I think it may also reasonably be inferred that the applicant would not have presented well at interview and he was vulnerable to rejection, especially when it would have become known that he had a back injury, as he volunteered on the three occasions where he was interviewed. 69. A determination of the substantial cause of the inability of a veteran to obtain remunerative work by war-caused injury must take account of the likelihood of the outcome of his presentation to potential employers. It must be balanced also against other causes which might reasonably be considered by those employers. 70. It would not be unusual for a potential employer to be cautious when considering engaging a person who discloses injuries which might either have affected the ability of that person to undertake the proposed work, to cause uncertainty of regularity of work by time off because of an exacerbation of back pain or the GAD or expose the employer to claims for compensation. I think it would be also notoriously difficult for any job applicant to obtain reasons for rejection of a job application, especially when the application was not acknowledged. 71. There is no onus on a veteran, the legislation is beneficial in nature and it should be constructed liberally and in a practical way (Hill v Repatriation Commission (2004) 82 ALD 60 at [44]; Repatriation Commission v Richmond [2014] FCAFC 124 at [92]; Smith at [17]). 72. I have not been able to locate an authority, nor was any suggested during submissions where the expression inability to obtain work has been discussed or determined. 73. The word inability, followed by the words to obtain, suggests, if literally and rigidly applied, that the veteran was lacking in ability to acquire or procure remunerative work. To obtain also involves the giving or granting of a job from an employer to a veteran who has sought to obtain it. 74. The respondent contends that the absence of knowledge by the other 67 employers of his back injury and GAD prohibit him from demonstrating an inability to obtain remunerative work by his incapacity because they must have rejected him for other reasons. 75. Surely a veteran is entitled to raise a reasonable inference or submit a hypothesis that if his incapacity by war-caused injuries were known to potential employers, it would be unlikely that he would obtain remunerative work. That inference is bolstered by the experience the applicant had with three employers that in fact did interview him and rejected him when his injuries became known. 76. If s 24(2)(b) does ameliorate the effect of the alone test in s 24(1)(c), the extent and nature of the war-caused injuries must be considered in a practical, liberal and beneficial manner and be balanced against those other factors that might discriminate against being engaged, in order to determine whether the substantial cause of the inability to obtain work is incapacity by war-caused injuries. In this application, I am satisfied that the greater or more dominant cause - the substantial cause - was the applicant's incapacity by war-caused injuries. 77. Additionally, a realistic appraisal of the ability of a veteran with hypertension, anxiety disorder and a back injury to obtain work of a manual nature involving lifting and standing would conclude the person with those disabilities is not only unlikely to procure or acquire a job but it is equally unlikely that a job would be given or granted by a potential employer. The substantial cause would be the war-caused injuries. (Original emphasis.)

THE COMMISSION'S APPEAL 15 The Commission filed an amended notice of appeal on 31 July 2015. That notice identified the relevant question of law as being: "Whether the Tribunal misconstrued and/or misapplied s 24(2)(b) of the [Act]?" 16 In the course of argument I raised with counsel for the Commission whether the notice identified a question of law. Following consideration the Commission sought leave to further amend its notice. 17 In its further amended form the notice contained reframed questions of law and grounds. The questions of law were said to be: "Whether the Tribunal misconstrued s 24(2)(b) of the [Act] … by (a) misconstruing s 24(2)(b) as requiring a 'liberal and beneficial' approach to the assessment of the extent and nature of a veteran's war-caused injuries; (b) misconstruing the third element of s 24(2)(b) as requiring causal factors other than the veteran's war-caused incapacity to themselves be the substantial cause of the inability to obtain remunerative work; and/or (c) failing to undertake the evaluative task required by the third element of s 24(2)(b), and instead dismissing the other causal factors identified by the Tribunal based on a hypothetical assessment of what would have happened if those other factors were not operative." 18 The amended grounds read: "1. The Tribunal misconstrued s 24(2)(b), and the cases which describe that provision as having an 'ameliorative' effect, as requiring a 'liberal and beneficial' approach to the assessment of the extent and nature of a veteran's war-caused injuries, and therefore misapplied the test provided by the third element of s 24(2)(b) of the Act. 2. The Tribunal misconstrued s 24(2)(b) of the Act by: (a) proceeding on the basis that, in order to find that the Applicant's war-caused incapacities were not the substantial cause of his inability to obtain remunerative work, other causal factors must be 'the substantial cause' of the inability to obtain employment. (b) impermissibly speculating as to what would have happened if the Applicant had obtained an interview for the positions in respect of which he did not, in fact, obtain an interview; and/or (c) failing to undertake the weighing exercise that was necessary in order to determine whether the Respondent's accepted war-caused incapacities were 'the substantial cause' of his inability to obtain remunerative work." 19 The respondent did not object to the further amendment being made and leave was granted. 20 I continue to harbour reservations as to whether or not the Commission has succeeded in identifying a question of law of the kind contemplated by s 44 of the AAT Act. I harbour these reservations notwithstanding the greater latitude accorded to appellants by the Full Court's recent decisions in Haritos v Commissioner of Taxation (2015) 322 ALR 254 at 274-5 and May v Military Rehabilitation and Compensation Commission (2015) 322 ALR 330 at 365-6. 21 That said, the parties did not seek to contend that an appropriate question of law could not be framed or that the existence of such a question could not be discerned in the course of the hearing of the appeal.

THE COMMISSION'S SUBMISSIONS considered 22 The Commission's challenge to the Tribunal's decision focussed on the approach of the Tribunal to the construction and application of s 24(2)(b) of the Act. The Commission contended that the Tribunal had been led into error by adopting "a practical, liberal and beneficial" approach when construing the provision. It further submitted that the Tribunal had erred in determining that Mr Woodall's war-caused injuries were the "substantial cause" of his inability to obtain remunerative work. 23 In dealing with these submissions the Court must "beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision": see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272.

Ground 1 24 As to the first point the Commission acknowledged that s 24(2)(b) operates to ameliorate what would otherwise be the "harsh" effects of s 24(1)(c) which denies eligibility for a special rate pension to a veteran unless he or she is prevented from continuing to undertake remunerative work by reason only ('alone') of incapacity caused by war-caused injury or disease: cf Repatriation Commission v Richmond (2014) 226 FCR 21 at 36. It did not, however, follow, so the Commission contended, that a "'liberal and beneficial' approach is required to the assessment of the extent and nature of a veteran's war-caused injuries." The Tribunal had fallen into error in undertaking the weighing exercise required by the third element of s 24(2)(b), so it was said, by ignoring and failing to balance other causal factors such as Mr Woodall's age, skills and workplace restrictions, at the time he made his applications, against the war-caused injuries as causal factors. 25 The liberality of approach was said to be apparent in paragraphs [66], [75] and [77] of the Tribunal's reasons. In each case the Tribunal had inferred that Mr Woodall had failed to obtain the three jobs for which he had been interviewed because of his back condition and his GAD. It had further inferred that, had Mr Woodall been interviewed by other prospective employers, they would have responded in the same way upon becoming aware of his war-caused injuries. 26 The High Court has, repeatedly, reaffirmed that statutory construction requires an examination of the ordinary and grammatical meaning of the words used in legislation having regard to their context and legislative purpose: see, for example, Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1 at 13; Commissioner of Taxation v Unit Trend Services Pty Ltd (2013) 250 CLR 523 at 539-40. 27 Section 24(2)(b) contains, as the Tribunal found, three requirements. The third requires that the veteran's war-caused incapacity must be "the substantial cause" of his inability to obtain remunerative work. This phrase clearly recognises that factors, additional to war-caused injury, may impede a veteran who is seeking to obtain employment. As Kiefel J said in Fox v Repatriation Commission (1997) 45 ALD 317 at 319-320: "The words 'the substantial cause' require that, if the incapacity is not of itself productive of the inability to obtain work, it is nevertheless the operative factor which, more than any other, explains it. That something might be 'a substantial cause' has regard to the situation where there may be a number of factors operating which are of sufficient causal significance to qualify as 'substantial' …. The definite article in s 24(2) … requires a stronger and more direct causal connection between the incapacity and the inability to obtain remunerative work." 28 In paragraphs [58] and [59] of its reasons the Tribunal placed s 24(2)(b) in the context of the legislative scheme. At [76] it accepted the need to balance the nature and extent of a veteran's war-caused injuries against other factors which might militate against success in a job application when determining whether the war-caused injuries were "the substantial cause" of the veteran's lack of success. 29 At [67] the Tribunal identified a number of factors which might adversely affect Mr Woodall's ability to obtain employment. In the last sentence of [76], the Tribunal determined that it was satisfied "that the greater or more dominant cause - the substantial cause - was ['Mr Woodall's] incapacity [caused] by war-caused injuries." This conclusion was open on the limited material which had been placed before the Tribunal. 30 That material included Mr Woodall's age, his employment history, his skills and the physical limitations. The Tribunal also had before it the details of Mr Woodall's attempts, between October 2008 and September 2009, to obtain alternative employment. Mr Woodall had had no response to 65 of his 70 applications. He was, however, able to give evidence (which the Tribunal accepted) about his experience at the three interviews to which he had been invited. This evidence, particularly that relating to his experience at the Epping Furniture warehouse, was sufficient to support the inferences which the Tribunal drew. The negative effect of Mr Woodall's war-caused injuries were then put into the balance against the other factors which might have impeded his capacity to obtain employment and were found to be the substantial cause of his failure to secure employment. 31 The Tribunal's references to the need to undertake the balancing exercise "in a practical, liberal and beneficial manner" was an acknowledgement of the beneficial purpose of the Act generally and s 24(2)(b) in particular. They related to the application of s 24(2)(b) rather than its meaning. The Commission's real complaint appears to be that that the Tribunal misapplied s 24(2)(b) in the circumstances of the case. The Tribunal's acceptance of the Act's beneficial purpose did not lead it to depart, in any impermissible way, from the ordinary and natural meaning of s 24(2)(b). The beneficial purpose of this paragraph as an ameliorative provision is readily apparent. 32 I would add that there is nothing contentious about the characterisation of s 24(2)(b) as an ameliorative provision in beneficial legislation. In Hill v Repatriation Commission (2004) 82 ALD 60 at 70 Mansfield J described the Act as "beneficial legislation" which should be "construed liberally". In Smith at 457 Rares J observed that: "It is important that a beneficial provision like s 24(1)(c) be construed in a practical way. … The expression 'continuing to undertake remunerative work that the veteran was undertaking' in s 24(1)(c) must be construed in a realistic and practical way so as to avoid underlying technical constraints on its application to a veteran whose income earning capacity has been completely or significantly impaired." 33 It is to be noted that his Honour was speaking of s 24(1)(c) and its construction. If this provision is to be regarded as beneficial in nature, a fortiori, s 24(2)(b) which mitigates some of the rigour of s 24(1)(c), must similarly be so regarded.

Ground 2 34 The second ground on which the Commission relies is related to the first. To a considerable extent this ground is a more expansive version of the first ground. 35 The ground has been set out in full above at [18]. It attributes to the Tribunal a series of errors. 36 The first of these alleged errors was that the Tribunal had considered that it was necessary, in order to make a finding adverse to Mr Woodall, to find that causal factors other than his war-caused injuries "must be" the substantial cause of his inability to obtain employment. This error was said to be apparent in what the Tribunal said at [66], [67] and [75] of its reasons. A fair reading of the Tribunal's reasons does not support this contention. The Tribunal did not approach its task in the manner alleged. Paragraphs [66] and [75] deal with the drawing of the inference relating to the resistance Mr Woodall may have encountered had he been interviewed by additional prospective employers. In [67] the Tribunal went no further than saying that, even if other negative factors may have been at work, it did not follow that those other factors "individually or in combination were the substantial cause of [Mr Woodall's] inability to obtain remunerative work." No misconstruction or finding of the kind attributed to the Tribunal was made. 37 The Commission next asserted that the Tribunal had impermissibly speculated about what would have happened had Mr Woodall obtained interviews with additional employers. This error was said to be manifest in paragraph [75] of the Tribunal's reasons. I do not accept this submission. In the first place, the error (if there be one) is not one of construction but rather of application of s 24(2)(b) of the Act. In any event, what the Tribunal did, as I have already observed, was to draw inferences from the limited available evidence about what had occurred when three prospective employers interviewed Mr Woodall. This evidence supported findings about Mr Woodall's incapacity to obtain alternative employment. The Tribunal did not find that any particular employer, who did not accord Mr Woodall an interview, would have refused him employment on these grounds. 38 In this context the observations of Burchett J in Cavell v Repatriation Commission (1988) 9 AAR 534 at 539 are apposite. In dealing with the Tribunal's function when determining whether a veteran had satisfied the requirements of s 24(1)(c), his Honour said that the Tribunal's task was: "to make a practical decision whether the veteran's loss of remunerative work is attributable to his service-related incapacities, and not to something else as well. It is a decision that should not be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide." 39 These observations were expressly endorsed recently by the Full Court in Richmond at 35. A similar "practical", realistic and "common sense" approach is, in my view, also called for when the Tribunal is making decisions under s 24(2)(b) of the Act. The Tribunal carried out its task with appropriate regard to the practicalities of Mr Woodall's position in a difficult and competitive employment environment. 40 The final error, alleged by the Commission, was that the Tribunal had failed to undertake the "weighing" exercise, required by s 24(2)(b). This complaint lacks substance: it ignores the plain words of paragraph [76] of the Tribunal's reasons.

DISPOSITION 41 The appeal must be dismissed with costs. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.

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