White v Repatriation Commission

Factual background 8 Mr White is presently 82 years of age, having been born on 13 April 1919. When he made the subject application on 1 December 1995 for a pension at the special rate, he was 76 years of age, which obviously satisfied the starting point set by s 24(2A)(b) of the Act to the effect that an applicant veteran must have turned 65 years before an application is made for a special rate pension. Mr White had attained the age of 65 years nearly 12 years earlier on 13 April 1984. He was a qualified accountant, and he last undertook remunerative work in November 1995 in the circumstances described in [13] below. The AAT set out in careful detail Mr White's employment and professional activities over the preceding forty years or so, which I will now endeavour to summarise. 9 Mr White was employed by the well known Travelodge organisation as company secretary from 1960 until September 1978, at which time he resigned as a result of declining health occasioned by his war-caused injuries. He was then 58 years of age. From 1972 to 1997, Mr White was a director of two Sydney-based private companies for which he performed a variety of accountancy tasks, being tasks which periodically occupied his working time in the aggregate for five to six weeks each year. He undertook such offices as a director concurrently with his work at Travelodge as well as subsequently. He received from such private companies every six months the sum of $1,250 (at least as at 1995). Such fees were, however, recorded as representing the reimbursement of travelling expenses, such accounting characterisation having been made for Mr White's personal taxation purposes. When he left Travelodge, he planned to seek less stressful employment in Sydney of an accounting nature, once he had recovered from his deterioration in health, but he was unsuccessful in obtaining the same. 10 In late 1979 Mr White and his wife decided to leave Sydney, and they bought 28 acres of rural land near Singleton in New South Wales. They built a home on this land, and established an orchard and goat farm which they conducted for the following 9 years. By this time Mr White's health had improved, and he sought to obtain casual accountancy work in the Singleton district. In the result, he engaged periodically in various kinds of accountancy work, mainly the completion of tax returns and diesel fuel rebate applications for his neighbours. Over the period from 1982 to 1989/90, Mr White was rewarded (to adopt a neutral expression for the moment) for such accountancy work by his neighbours in the form of goods and services, in lieu of fees, which he valued at an approximate total of $5,760 for the purpose of his application to the Commission, such goods and services provided by the neighbours comprising labour and materials for his small farming operation. After finally selling the farm in 1990, Mr White and his wife took up residence in the township of Singleton, but Mr White continued to do his former neighbours' tax returns, in return for the provision of occasional labour and garden furniture for his new home. 11 Earlier as from the year 1981, Mr White had also undertaken voluntary accounting work for various community bodies such as the local RSL Club, the Probus Club, the Disabled Children's Association and the Chamber of Commerce, in order to become known to the Singleton community with a view to gaining accountancy work. It was apparently by reason of such voluntary work that in 1991, he was invited to work professionally for a local accountancy firm named Crawfords for a period of 18 months, at an annual salary of $28,000. His professional tasks at Crawfords were limited essentially to completing clients' tax returns. He usually worked at Crawfords between 8:30am to 4:30pm, and was paid fortnightly with tax instalments deducted. 12 After cessation of his employment with Crawfords, Mr White commenced professional work at the Coopers & Lybrand accountancy office in Singleton. The nature of this work was mainly that of attending to an accumulation of overdue taxation returns. He ceased such work after a period of 4 months for health reasons. Throughout all material times mentioned in these reasons for judgment, Mr White maintained his membership of his professional association and his subscriptions to accountancy and taxation journals, being a factor of relevance exemplified in Thomson (see [6] above). 13 Mr White additionally engaged in the evening in lecturing at the Singleton TAFE on the subjects of bookkeeping and accountancy, having commenced to do so as from 1985 whilst still farming. He was remunerated by way of salary, with tax instalments deducted. He taught throughout the academic year and spent about 27 hours per week in preparation for and in giving lectures. He was engaged in this field of work for TAFE for about 8 to 9 years until November 1993. When his teaching activities at TAFE ended, he commenced similar teaching work at Skillshare in Singleton on 6 June 1994, and continued to do so until November 1995, and once again he was remunerated weekly with income tax deducted. During such last mentioned employment, the time frames within which he worked were fragmented and irregular; thus he worked for approximately 8 weeks in June-July 1994, four weeks in April-May 1995 and 3 weeks in November 1995. He continued to maintain his professional membership and journal subscriptions at his own expense. He discontinued such employment with Skillshare when his doctor advised that he could no longer continue working for health reasons, though Skillshare nevertheless closed down its Singleton office at about the same time. He was offered similar work at Skillshare's operations in a nearby town, but could not accept the same because of such adverse health reasons, which involved his war-caused orthopaedic condition.

The AAT's findings 14 As appears from the Full Court's dicta cited from Grant in [5] above, the Commission is required to determine the nature of the "specific remunerative activity or activities" that the veteran was last undertaking before making his or her claim, pursuant to the requirements of s 24(2A)(d) of the Act, such activity or activities being defined in s 24(2A) as "last paid work". The AAT found that the specification of such "last paid work", that is to say, the work which Mr White undertook before making his present claim on 1 December 1995, was that of a professional accountant, the same having concluded with the three weeks' course of lectures given in November 1995 for Skillshare above referred to. Mr White's engagement in farming for nine years until 1990 (see [10] above) did not constitute "last paid work" within s 24(2A)(d), because he had ceased that work almost six years before he made his s 24 application on 1 December 1995. Set out below is a table summarising the AAT's findings in relation to the working occupations (to presently adopt a neutral expression) pursued by Mr White after leaving Travelodge (except for the two Sydney based directorships which commenced before such departure from Travelodge), and in particular its findings as to whether such occupations were undertaken in the capacity of an employee of another entity, or were pursued on his own account (i.e. as an independent contractor). Job description Period work performed AAT's finding

Company director of two Sydney based private companies 1972-1997 Non-remunerative work, or else not work of a substantial nature, and only relinquished because of change of residence

Farming at Singleton 1981-1990 Not last paid work; work on his own account

Accountancy work for farming neighbours) 1982-1990 Voluntary, non-remunerative work

TAFE (Singleton) - lecturing in accountancy 1985 - November 1993 Work on his own account

Crawford's (accountancy work) 1991-1992 Employee (thus not undertaken on own account)

Coopers & Lybrand (accountancy work) 1993 (4 months) Employee (thus not undertaken on own account)

Skillshare - lecturing in accountancy) 1994-1995 (15 weeks) Work on his own account

Irrespective of the assistance that may be gained from the chronologically orientated table assembled above, it is necessary to set out such findings in more detail, though in the chronological sequence set out above, rather than the precise sequence undertaken in the course of the AAT's reasons for decision. 15 The first finding of the AAT, taken in chronological sequence, related to Mr White's working directorships of the two Sydney based private companies referred to in [9] above. It was an adverse finding expressed alternatively, that is to say, either that he was not remunerated in the statutory sense because the only payments made were expressed to be made by way of reimbursement of travelling expenses, or in any event that the directorships were relinquished, not because of his disabilities, but because of his ultimate change of residence to Murwillumbah, or that in any event, it was not work of a sufficiently substantial nature to qualify within s 24(2A) of the Act. 16 The AAT next found that the accountancy work performed by Mr White for the benefit of his farming neighbours at Singleton, namely completing their tax returns and diesel fuel rebate application forms, did not constitute remunerative work such as to satisfy s 24(2A) of the Act, Mr White having received in return from such neighbours only the provision of labour and materials for his farming operations. In so finding, the AAT likened such activity to the accountancy and bookkeeping work voluntarily undertaken by Mr White in Singleton for the RSL, Probus Club and the Disadvantageous Children's Association. 17 The AAT thereafter determined that the work performed by Mr White for Crawfords accountancy practice conducted at Singleton, and subsequently for Coopers & Lybrand accountancy practice also conducted in Singleton, was so undertaken in the capacity of an employee, or more specifically, pursuant to a contract of service in contrast to a contract for services, being the distinction drawn by legal authorities on that subject. The basis for this finding comprised or included the circumstances that in each case, he was retained on a fixed salary, worked regular times each day, performed his duties in the respective firms' accountancy offices, and utilised staff provided by such firms. Consequently the AAT concluded that such employment by both firms fell for consideration pursuant to s 24(2A)(g)(i) of the Act alone, to the exclusion of s 24(2A)(g)(ii), in contrast generally to what the AAT found in relation to the other activities tabled in [14] above. 18 Lastly in point of time, the AAT characterised Mr White's lecturing appointments to TAFE, and subsequently to Skillshare, as that of an accountant engaged pursuant to a "contract for services", such as to bring the same within the scope of s 24(2A)(g)(ii) of the Act by way of work in a profession, trade, employment, vocation or calling, in contrast to work as an employee within s 24(2A)(g)(i). To reach that conclusion, the AAT undertook an examination of the differing indicia, established by the authorities, involved in determining the existence of a contract for services on the one hand, and the existence of a contractor of employment in the traditional master and servant relationship on the other. 19 There was no challenge to the AAT's occupational characterisations concerning Mr White on the appeal, which were made by the AAT after consideration of well known case law authorities. The AAT concluded that Mr White had not undertaken "remunerative work" for the continuous period of 10 years that began before he turned 65 years of age on 13 April 1984, either for such period as an employee, or alternatively for such period as an independent contractor. He thereby failed to meet the requirements set out in s 24(2A)(g) of the Act, and in particular as to sub-paragraph (ii) thereof, which relates to "working on his or her own account in any profession, trade, employment, vocation, or calling" which was the principal basis of the AAT's decision. Consequently Mr White did not qualify for a pension at the special rate pursuant to s 24. The parties' submissions 20 Counsel for Mr White submitted that in examining whether Mr White satisfied the requirements of s 24(2A)(g)(ii), and the continuity test thereby stipulated, the AAT erroneously construed such sub-paragraph as requiring ten years' continuous engagement remunerative work on his own account. It is appropriate that I reproduce the full text of the initial segment of Counsel's written submissions, in that regard: "7. It is submitted that the sequence of its reasoning set out above, including its reasoning at [73], [78] and [82], explains that it found against the test of 10 years continuity of "so working in that profession" by excluding from its consideration, or by treating as disqualifying gaps in his pursuit of his profession, those of Mr White's past professional activities which it had found not to be "remunerative work" or to have been performed "as an employee". 8. It is submitted that this reasoning reveals a misconception of the continuity test in relation to s 24A(2A)(g)(ii), and a misunderstanding of the distinction made in Thomson v Repatriation Commission (2000) 96 FCR 550 at [8], [11], [12], [14] and [15]. 9. In effect, the Tribunal has looked for a 10 year continuity of self-employed activities each of which amounted both to "remunerative work" within the meaning of that term in s 24(2A)(d) and also "work on his own account" within s 24(2A)(g)(ii). This is an erroneous reading of the latter provision, since only 'last paid work' is required to satisfy both of these requirements." 21 What the Tribunal should have done, so counsel for Mr White submitted, having determined that "the last paid work" undertaken by Mr White fell within s 24(2A)(g)(ii) of the Act (that is to say, the work which was undertaken by Mr White for Skillshare on his own account), was to take into consideration the time gaps which occurred during the prescribed period of time when Mr White did not work on his own account as an accountant, but was instead employed to work for others, referring thereby to his employment at Crawfords and Coopers & Lybrand. Thus Mr White's submissions continued as follows: "10. Instead, the Tribunal should have taken account of all of Mr White's professional activities over the 10 year period prior to December 1995, so as to consider their implications for a finding of continuity of working at any level in a professional practice as a self-employed person over that period. 11. The Tribunal should have asked itself whether all Mr White's paid and unpaid professional activities over the 10 year period showed that he had maintained a continuity of work on his own account as an accountant. It should have considered whether those activities explained why the gaps in which he did not obtain remuneration on his own account did not indicate a retirement from the pursuit of a professional occupation on his own account." The reference to "Mr White's other professional activities" were said to extend to the work Mr White undertook for the two private companies and for his farm neighbours. 22 Counsel for the Repatriation Commission joined issue upon the thrust of Mr White's contentions, in an equally precise way, which I would summarise as follows from her written submissions: (i) the structure of s 24(2A)(g) is predicated upon the distinction in working capacity between so-called "self-employment" and "employment", being a distinction required to be maintained in respect of the whole of the "continuous period"; (ii) the s 24(2A) notion of "last paid work" cannot include non-remunerative activity, being the characterisation which was correctly applied by the AAT to Mr White's unpaid accountancy services rendered to his farming neighbours; and (iii) contrary to Mr White's submissions, the AAT did give consideration, to what is described as "gaps" in [Mr White's] work", for instance, in paragraph [82] of its reasons for decision, which reads as follows: "82. There is no evidence that the Tribunal accepts that the Applicant was seeking other work that he was unable to obtain in the intervals between his short-term contracts with Skillshare in 1994/95. Indeed he was in receipt of Service Pension for much of that time, and his work with Skillshare appears to have been no more than supplementation of his pension income. Apart from any voluntary accounting work for his neighbours, that the Tribunal has already rejected as being remunerative work, contrary to the submission for the Applicant, there is no evidence that he was seeking any work other than with Skillshare since he ceased work with TAFE." Did the AAT commit an error of law? 23 The Full Court in Thomson postulated a construction of s 24(2A)(g) as a whole which, read literally, and given the AAT's findings, would deny Mr White fulfilment of its requirements: see the first paragraph extracted from its judgment in [6] above, which postulates that sub-paragraphs (i) and (ii) thereof operate in an entirely mutually exclusive way. It is to be appreciated nevertheless that the Full Court was not there engaged in an assessment of circumstances such as here involved, where the veteran is seeking to establish fulfilment of the requirements of sub-paragraph (ii) upon the basis of continuity of work predominantly on his own account, supplemented by gaps in time when his skills were temporarily applied in the capacity of an employee of Crawfords, and subsequently of Coopers & Lybrand. In Thomson, the veteran medical practitioner engaged solely in work on his own account, subject only to gaps in time when he undertook no work at all, possibly for reasons of non-availability thereof. 24 It may be observed that the sub-paragraph (i) continuity test focuses upon the need to identify one employer during the statutory ten year period, subject only to exceptions in the case of a predecessor or predecessors of that employer, irrespective (implicitly) of what changes might have occurred in the nature of the business of that employer or its predecessor or predecessors during that period of time, whereas the sub-paragraph (ii) continuity test focuses upon the nature or description of the profession, trade, employment, vocation or calling in which the veteran was engaged during such period. Incidentally, the expression "employment", as used in sub-paragraph (ii), connotes self-employment only, given the preceding words "working on his or her own account" which control the subsequent words "in any profession, trade, employment, vocation or calling…". 25 With the foregoing general observations upon the structure of s 24(2A)(g) in mind, Mr White's submissions as to permissible "time gaps" having occurred within the ten year period addressed by sub-paragraph (ii) thereof fall for consideration, being time gaps claimed by Mr White to bear analogy with what was postulated by the Full Court in Thomson as set out in the last paragraph extracted in [6] above. 26 I do not think that the wording of sub-paragraph (ii) accommodates the width of interpretation which Mr White has sought to establish by his time gaps thesis, having regard to the expression "… had been so working in that profession, trade, employment, vocation or calling…"(my emphasis). It is not easy to rationalise a statutory test, which, upon the basis of what was said in Thomson (see again the first paragraph of the judgment extracted in [6] above), allows for permissible gaps in time caused by unavailability of work for the veteran on his own account say as an accountant or doctor, yet does not allow for temporary accounting or medical work as an employee. Particularly is that a somewhat strange result, given the generality of the wording of the Second Reading speech, which I have extracted in [2] above. Nevertheless it is apparent that the legislature framed subparagraph (i), as well as subparagraph (ii), in more restricted terms than was foreshadowed by the generality of the Second Reading speech. 27 The consequence of my foregoing finding is that Mr White could only fulfil the continuity test by reliance upon a combination of accounting work undertaken whilst principally engaged in farming (see [10] above), and of accounting work undertaken at TAFE as a lecturer, and thereafter of similar accounting work undertaken at Skillshare. Putting aside the issue whether such accounting work was "remunerative work" within paragraph (d) of s 24(2A), I do not think that such first mentioned accounting work could be characterised as work undertaken on his own account for the purposes of satisfying sub-paragraph (ii), since such accounting work was undertaken mainly during the time when Mr White's trade, employment, vocation or calling was in substance and reality that of a farmer. Consistently with subparagraph (i), which refers to a single circumstance of employment, albeit involving a predecessor of the last employer if applicable, sub-paragraph (ii) conceives of only one species of profession, trade, employment, vocation or calling worked by a veteran on his own account. Additionally or alternatively, Mr White sought to cover contentious time gaps by reliance upon his accounting work undertaken for the two private companies over the lengthy period of time which spanned at least the period of time from his retirement in 1958 from Travelodge to the year 1997 when Mr White moved to Murwillumbah, but the findings of the AAT, particularly in [15] above, do not allow room for legitimate reliance upon that latter activity as remunerative work, despite its accountancy nature, or else as work engaged in continuously in any relevant sense. 28 By reason of the foregoing conclusions which I have reached, I am of the opinion that Mr White's appeal must be dismissed, upon the basis that no error of law on the part of the AAT, material to the formation of its decision, has been demonstrated [29]. I would add however that had the issue as to the meaning relevantly of the statutory expression "remunerative work" contained in s 24(2A) (as to which see again [4] above) become critical to my decision on this appeal, such as to have required account to have been undertaken by the AAT of the accounting work undertaken for Mr White's neighbouring farmers, I would have found myself unable to accept the view that the undertaking of work by a professionally qualified person in return for the provision, without monetary charge, of goods and services in specie, was incapable in principle of satisfying such statutory expression. There is nothing in the statutory context to exclude from the ambit of the statutory expression "remunerative work" the provision of goods or services received by a veteran which is quantifiable in money. As was observed by Blackburn J in R v Postmaster-General (1876) 1 QBD 658 at 663, "'Remuneration'… means a quid pro quo. If a man gives his services, whatever consideration he gets for giving his services seems to me a remuneration for them." In another statutory context, the word "remuneration" has been described as "… what the doer expects to get as the result of the work he does in so far as what he expects to get is quantified in terms of money": see S & U Stores Ltd v Lee [1969] 1 WLR 626 at 629 per Blain J with whom Lord Parker CJ and Melford Stevenson J agreed. 29 Since the appeal may be considered to have been in the nature of a test case, by reason of the complexity of Mr White's post retirement accountancy related activities undertaken over a long period of time for the purpose of maintaining a reasonable standard of living for himself and his wife, being activities falling partly within subparagraph (i) and partly within sub-paragraph (ii) of paragraph (g) of s 24(2A) of the Act, it may well be thought that the appropriate result would be for no order to be made as to costs of the appeal. I will therefore delay the making of final orders for fourteen days until 9:30am on 22 November 2001, in order to receive submissions on the matter of the costs of the appeal. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Associate: Dated: 9 November 2001 Counsel for the Applicant: Mr MB Smith

Solicitor for the Applicant: Legal Aid Commission of New South Wales

Solicitor for the Respondent: Australian Government Solicitor