Statement of Principles concerning malignant neoplasm of the gallbladder (Reasonable Hypothesis) (No. 36 of 2024)

The central concept is the “reasonable hypothesis” standard, which is the lower of two evidentiary thresholds under the VEA and MRCA. Under section 120A of the VEA, the reasonable hypothesis test applies to claims for operational, peacekeeping, hazardous, and British nuclear test defence service; under section 338 of the MRCA, it applies to warlike and non-warlike service. A reasonable hypothesis is one that is consistent with the known medical facts and is not fanciful. The SoP codifies what evidence will be accepted as sufficient to raise such a hypothesis for malignant neoplasm of the gallbladder. It does not require proof on the balance of probabilities; only that the hypothesis is plausible and supported by the specified factors.

Another key concept is “clinical onset”. Many of the 13 factors are measured against the timing of clinical onset of the disease. For example, cholelithiasis must exist before clinical onset; smoking must have commenced at least five years before clinical onset and can only count if clinical onset occurs within 20 years of cessation; obesity or overweight must have been present for at least five years within the 20 years before clinical onset. Clinical onset is not defined in the SoP but is well established in case law as the time when a person first experiences symptoms or when the condition becomes diagnosable. The precise date matters because many factors have temporal cutoffs.

The dictionary definitions are themselves substantive legal rules. For instance, “being exposed to high levels of dietary aflatoxins” is defined as living or working in a region where food is regularly contaminated with high aflatoxin levels, and consuming those foods as a major part of the diet. The note gives examples: sub-Saharan Africa, Southeast Asia, Eastern Mediterranean, and China. This definition will require a claimant to prove geographic residence and dietary habits, not merely oral ingestion. Similarly, “chronic infection with hepatitis B or C virus” requires laboratory confirmation of serological or nucleic acid markers and an infection duration of at least six months. That excludes self-reported diagnoses or historical claims without contemporaneous testing.

The concept of “relationship to service” is critical. Section 10(1) requires that any factor in section 9 be related to the person’s relevant service. That means the factor must have arisen from, been caused by, or been aggravated by the service itself. For example, if a veteran has cholelithiasis (gallstones), the veteran must show that the gallstones are service related (e.g., due to diet or weight gain during service). If the gallstones are idiopathic or unrelated to service, the factor cannot be used. This is a second layer of causation: first, the factor must exist; second, it must be connected to service. This is not merely a medical question but one of service history evidence.

The SoP also introduces a factor for “inability to obtain appropriate clinical management of malignant neoplasm of the gallbladder before clinical worsening”. This is the only factor that applies specifically to aggravation cases (subsection 10(2)). It reflects a common SoP provision that allows a worsening of the disease to be linked to service if the claimant could not receive proper treatment due to service circumstances. However, the factor is narrow: it only applies where the disease was suffered or contracted before or during (but did not arise out of) relevant service. It does not apply to initial onset.

The SoP directly affects veterans and members of the Australian Defence Force who have rendered relevant service as defined in the Schedule. This includes operational service, peacekeeping service, hazardous service, and British nuclear test defence service under the VEA, as well as warlike and non-warlike service under the MRCA. It also indirectly affects their dependents who may claim compensation after the veteran’s death from malignant neoplasm of the gallbladder. The instrument governs claims under two separate legislative schemes: the VEA and the MRCA. Claimants under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 are not covered because that Act uses a different standard of proof (reasonable satisfaction) and is not referenced in the SoP.

The Repatriation Medical Authority (RMA) is the body that determines these SoPs. The RMA is composed of medical and scientific experts, and its determinations under section 196B of the VEA are legislative in character. The SoP binds the Department of Veterans’ Affairs (DVA), the Veterans’ Review Board (VRB), and the Administrative Appeals Tribunal (AAT) when they assess claims. It does not bind courts, but courts will give it significant weight in judicial review proceedings.

The SoP also affects health professionals who provide medical opinions in support of claims. The factors require specific clinical findings: for example, factor 2 requires a chronic biliary infection of Salmonella typhi or paratyphi detected on at least two separate occasions at least a month apart within two years before clinical onset. A diagnosing doctor must be aware of this evidentiary standard to ensure that appropriate tests are performed and documented. Similarly, the definitions of obesity and overweight rely on BMI or waist circumference measurements, which may require specific recording.

Legal practitioners advising veterans must be familiar with the 13 factors and understand that the SoP is exhaustive. If a veteran’s circumstances do not fall within any factor, the reasonable hypothesis cannot be raised (subject to the possibility of a “special circumstances” argument, which is rarely successful). The SoP therefore narrows the scope of claims that can succeed and effectively sets the floor for what must be shown.

The instrument also affects the RMA itself. Under section 196B(3) and (4), the RMA must determine SoPs based on sound medical-scientific evidence and must keep them under review. The fact that the 2015 SoP was repealed and replaced suggests that new evidence emerged, or that the RMA concluded the previous factors were no longer sound. The replacement has resource implications for the DVA in re-assessing pending and future claims.

The SoP creates no direct duties on private individuals or businesses. It imposes a legal duty on decision-makers within the DVA and the VRB to apply the SoP when assessing claims for malignant neoplasm of the gallbladder. Under section 120A of the VEA and section 338 of the MRCA, if a claim is submitted for a disease for which an SoP exists, the reasonable hypothesis must be determined by reference to that SoP. The decision-maker must consider whether at least one factor exists and whether that factor is related to service. They must also apply the dictionary definitions strictly; they cannot substitute their own medical judgment about what constitutes obesity or a pack-year.

The rights of claimants are largely procedural. A claimant has the right to have their claim assessed in accordance with the applicable SoP. If the DVA rejects a claim by misapplying a factor or by ignoring relevant evidence, the claimant can seek merits review at the VRB and then the AAT, and judicial review in the Federal Court. The SoP itself does not confer a right to compensation; it is a necessary but not sufficient condition. Even if a factor is satisfied, the decision-maker must still be satisfied that the reasonable hypothesis is raised and that the factor is related to service.

The SoP also gives the RMA the right (or duty) to review and revoke or replace SoPs. There is no private right to challenge the SoP itself directly; it can be challenged only indirectly in a judicial review of a decision applying it, on grounds such as that it was made without power or that the RMA failed to take into account relevant medical evidence. In practice, SoPs are rarely struck down.

There is a notable absence: the SoP does not create a right for a claimant to rely on factors not listed. If a claimant’s medical evidence suggests a different causal mechanism (e.g., occupational exposure to chemicals not mentioned), the SoP does not permit that evidence to raise a reasonable hypothesis unless it falls within one of the 13 factors. That is a limitation on the claimant’s ability to present their best case, but it is a deliberate feature of the legislative scheme to standardise decision-making.

For the RMA, there is a duty under section 196B(3) of the VEA to determine SoPs only if there is sound medical-scientific evidence. The RMA must also ensure that the SoP is consistent with any relevant Ministerial direction. There is no obligation to consult publicly before making or amending an SoP, unlike some other legislative instruments. This means affected veterans have no formal right to participate in the determination process.

This SoP contains no penalty provisions. It is not a regulatory instrument that proscribes conduct; it is an evidentiary standard used within the veterans’ compensation system. However, enforcement mechanisms exist in the broader legislative framework. If a claimant knowingly provides false or misleading information in support of a claim that relies on this SoP, they may face prosecution under section 135.1 of the Criminal Code (Cth) for obtaining a financial advantage by deception, or under the general fraud provisions applicable to Commonwealth payments. The DVA has recovery powers under the VEA and MRCA to demand repayment of overpaid compensation if it later discovers that a factor was not genuinely present.

The Repatriation Medical Authority has no enforcement role. Its function ends once the SoP is made. The Department of Veterans’ Affairs is the primary enforcement body. If a claim is granted but later found to be based on an erroneous application of the SoP (e.g., the veteran did not actually have chronic hepatitis B infection for six months), the DVA can review the decision under section 31 of the Administrative Appeals Tribunal Act 1975 or under internal review mechanisms, and then recover overpayments.

For legal practitioners, the risk of penalties arises if they assist a client to fabricate evidence to meet a factor. For example, if a practitioner advises a veteran to claim they lived in Southeast Asia and ate contaminated grains when they did not, that could amount to aiding an offence. There is also a risk of adverse costs orders if a claim is pursued unreasonably in the AAT.

The SoP indirectly affects the burden of proof. Because it sets a minimum standard, claims that do not meet any factor are likely to be rejected summarily, which reduces the administrative burden on the DVA. Conversely, claims that fall within a factor must receive careful consideration. There is no penalty for the DVA if it misapplies the SoP; the remedy is merits review or judicial review.

The SoP operates within the framework of the VEA and MRCA. It is made under subsection 196B(2) of the VEA, and its application is tied to sections 120A and 120B of the VEA and section 338 of the MRCA. These are the provisions that require a decision-maker to apply an SoP when determining a reasonable hypothesis. If the SoP did not exist, the decision-maker would be required to determine the reasonable hypothesis on the basis of the medical evidence alone, without the codified factors. The SoP therefore overrides the general common law approach by specifying the exclusive pathways.

The SoP interacts with other Statements of Principles through section 11. If a factor in section 9 refers to an injury or disease for which a separate SoP has been determined (for example, factor 8 “having diabetes mellitus” or factor 10 “having non-alcoholic fatty liver disease”), then the factors in that separate SoP apply to determine whether that condition itself is related to service. This creates a chain: to satisfy factor 8, a claimant must show not only that they had diabetes mellitus but also that the diabetes is related to service under the diabetes SoP. This mechanism prevents double counting and ensures consistency across SoPs.

The SoP also interacts with the International Statistical Classification of Diseases and Related Health Problems, Tenth Revision, Australian Modification (ICD-10-AM). The SoP states that malignant neoplasm of the gallbladder attracts code C23, but the meaning is the legal definition in subsection 7(2), not the ICD code. This means a medical report that diagnoses ICD code C23 will be relevant but not conclusive; the DVA must check whether the condition falls within the legal definition, including the exclusions. For example, a diagnosis of “bile duct cancer” coded as C23 may need to be re-evaluated because bile duct cancer is excluded under subsection 7(2)(c)(ii).

The SoP does not interact with state workers’ compensation laws or private health insurance. It is exclusively for Commonwealth veterans’ compensation. However, if a veteran has also claimed compensation under a state scheme, any evidence gathered for that claim may be used in the federal claim, subject to privacy laws.

The definition of “relevant service” ties to the VEA and MRCA definitions. This means that service under the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 is not covered; those claims use a different standard of proof and are not governed by SoPs. Similarly, service by non-defence Commonwealth employees is excluded.

The SoP repeals the Statement of Principles concerning malignant neoplasm of the gallbladder (No. 89 of 2015) made under subsections 196B(2) and (8) of the VEA. That earlier SoP was registered as F2015L00921. The present SoP commences on 28 May 2024. The repeal is complete; the 2015 SoP no longer applies to any claim made after that date, even if the disease was diagnosed earlier. However, transitional arrangements are not specified in the instrument; generally, the SoP in force at the time of the decision on the claim applies under section 120B of the VEA.

The new SoP introduces several factors not present in the 2015 SoP. Based on the text of the new instrument, factors new to this version include: chronic biliary infection of Salmonella typhi or paratyphi (factor 2), non-alcoholic fatty liver disease (factor 10), and exposure to high levels of dietary aflatoxins (factor 12). The 2015 SoP contained factors such as cholelithiasis, primary sclerosing cholangitis, Thorotrast, porcelain gallbladder, obesity, overweight, diabetes, smoking, hepatitis B/C, and inability to obtain clinical management. The new SoP adds the Salmonella and aflatoxin factors and the NAFLD factor, reflecting updated medical evidence on causal links.

The definitions have also been updated. The new SoP includes a definition of “porcelain gallbladder” (not defined in the 2015 SoP, though it was a factor). The definition of “one pack-year” now includes a note with an example calculation, which is more precise than the 2015 version. The definition of “being obese” explicitly incorporates BMI and waist circumference thresholds, and the definition of “being overweight” uses BMI of 25 or greater. These tighten the evidentiary requirements.

The note under factor 2 (Salmonella) provides clinical details: detection by specific antibodies in serum or detection of Salmonella sp. in stool samples. This is new guidance. The note under factor 12 (aflatoxins) names specific geographic regions. These notes are part of the operative text and carry legal weight.

The RMA has the power to amend SoPs at any time, and this instrument is the result of a review presumably undertaken because of new medical-scientific evidence. The repeal date of the 2015 SoP is 28 May 2024, which is the commencement date of the new SoP. There is no gap period.

There is no reported litigation specifically concerning this SoP, as it commenced only on 28 May 2024 and no decisions applying it have yet been judicially reviewed. However, the broader litigation landscape for Statements of Principles is well established. SoPs are frequently challenged in the Administrative Appeals Tribunal and the Federal Court on two main grounds: first, that the RMA failed to have regard to sound medical-scientific evidence under section 196B(3); second, that the RMA acted unreasonably in determining the factors. For earlier SoPs on gallbladder cancer, there were AAT decisions interpreting the 2015 SoP, but those are not binding on this new instrument.

The SoP itself could be challenged by a person affected by a decision applying it, on the basis that it is ultra vires the VEA or that the RMA made an error of law. Courts have held that the RMA has a broad discretion in determining factors, but it must base its decisions on sound medical-scientific evidence. If a claimant could show that the RMA ignored a reputable body of evidence linking gallbladder cancer to, say, a specific chemical exposure not listed, that could be a ground for review. However, such challenges rarely succeed because the courts give the RMA considerable deference as a specialist body.

In the AAT, the SoP is binding; the Tribunal cannot substitute its own medical opinion for the factors. If a claimant’s evidence does not fit within any factor, the claim must be rejected, even if the Tribunal thinks there is a plausible connection. This has been the subject of criticism but has been upheld in case law such as Repatriation Commission v. Gorton (2001) and Repatriation Commission v. Deledio (1998), which established the framework for applying SoPs. The Federal Court has held that the SoP is a “catalogue of factors” that is both definitive and exhaustive.

There has been litigation on the meaning of “clinical onset” in other SoPs, and that case law will apply here. Similarly, the term “reasonable hypothesis” has been extensively litigated, most notably in Repatriation Commission v. Bey (1997) and later cases. Those general principles will govern the application of this SoP.

No cases have yet considered the specific definitions for porcelain gallbladder or aflatoxin exposure in this SoP, so those are novel terms that may be judicially considered in the future.

Several provisions in the SoP are traps for the unwary.

First, factor 2 for Salmonella biliary infection requires detection on at least two separate occasions at least a month apart within two years before clinical onset. A single positive stool culture or a single rising antibody titre is insufficient. The claimant must have had two documented tests separated by a month, and the infection must be chronic biliary, not merely an acute gastroenteritis. This is a high evidentiary bar that many claimants may not meet, even if they had a remote history of typhoid fever.

Second, factor 12 (aflatoxins) requires not just consumption but that the claimant lived or worked in a geographic region where food items are “regularly contaminated with high levels of aflatoxins” and that they consumed those foods as a “major part of the diet”. The note lists sub-Saharan Africa, Southeast Asia, Eastern Mediterranean, and China as examples. A short holiday or a two-year posting to one of these regions may not suffice; the factor requires at least five years of such exposure within the 30 years before clinical onset. The five-year period must be on more days than not. A claimant who lived in Singapore (a developed city with strict food standards) but who occasionally ate imported nuts may not satisfy the definition.

Third, the obesity and overweight factors require the condition to have been present for at least five years within the 20 years before clinical onset. A claimant who was obese only in the year of diagnosis will not satisfy factor 6. Also, the definition uses BMI or waist circumference. Weight fluctuations over time must be documented by medical records. Self-reports may not be accepted.

Fourth, factor 9 (smoking) requires at least 20 pack-years, with smoking commencing at least five years before clinical onset, and if smoking ceased, clinical onset must occur within 20 years of cessation. This means an ex-smoker who developed gallbladder cancer 25 years after quitting cannot rely on this factor. Also, the pack-year calculation is specific: one pack-year equals 20 cigarettes per day for one year, or 7,300 grams of smoking tobacco. Pipe and cigar smokers must convert by weight, which may be difficult to prove.

Fifth, factor 13 (inability to obtain appropriate clinical management) applies only to clinical worsening, not initial onset, and only if the malignant neoplasm was suffered or contracted before or during (but did not arise out of) service. This is a narrow factor and requires evidence that the claimant could not access proper treatment due to service circumstances.

Sixth, the definition of “porcelain gallbladder” is “intramural calcification of the gallbladder commonly associated with chronic cholecystitis”. This is a radiological diagnosis; not all calcified gallbladders meet this definition. A claimant must have a report specifically describing porcelain gallbladder.

Seventh, the relationship to service requirement (section 10) applies to every factor. Even if a claimant has gallstones and meets factor 1, they must prove the gallstones are service related. For example, obesity acquired post-service will not be service related. This is often the hardest hurdle.

Eighth, the dictionary definition of “chronic infection with hepatitis B or C virus” requires laboratory confirmation. A claim of infection based on a past history without serological markers will fail.

“Compliance” in this context refers not to regulatory compliance by businesses but to the requirements for legal practitioners and claimants seeking to rely on this SoP to establish a reasonable hypothesis, and for decision-makers applying it.

For legal practitioners representing veterans or members, the starting point is to determine which of the 13 factors might be available. The practitioner should obtain the veteran’s complete medical history, including any records of gallstones, biliary infections, weight history, smoking history, diabetes, liver disease, hepatitis exposure, and dietary history. The practitioner must then map the available evidence to each factor, ensuring that temporal requirements are met. For example, if the claimant has gallstones, the practitioner must find evidence that the gallstones were present before the clinical onset of gallbladder cancer (which may be difficult if the cancer was diagnosed at an advanced stage but gallstones were only found at surgery). The practitioner must also gather evidence that the gallstones are service related: this might involve showing that the veteran had a high BMI during service, or that post-service gallstones are attributable to a service-caused obesity.

For factor 2 (Salmonella), the practitioner must locate laboratory records showing two separate positive results at least one month apart, and that these occurred within two years before the first symptoms of gallbladder cancer. This may require contacting overseas laboratories if the infection occurred during service in a relevant region. For factor 12 (aflatoxins), the practitioner must gather evidence of the veteran’s residence history and dietary patterns, which may include service records, postings, and personal diaries.

The practitioner must also be aware of the interaction with other SoPs. For example, if the veteran has diabetes mellitus (factor 8), the practitioner must also satisfy the diabetes SoP to show that the diabetes is service related. That may require a separate claim or a separate set of factors for diabetes.

For decision-makers in the DVA and the VRB, compliance means strictly applying the dictionary definitions. If a claimant says they were obese, the decision-maker must check whether the medical records show a BMI of 30 or greater, or a waist circumference over 102 cm (male) or 88 cm (female). The decision-maker cannot accept a self-report of being “overweight” without a recorded BMI.

Decision-makers must also be careful with timing. For example, factor 6 requires obesity for at least five years within the 20 years before clinical onset. If the claimant was obese for only three years, the factor is not satisfied, even if the obesity was severe.

The “inability to obtain clinical management” factor (13) is easily misunderstood. It applies only to worsening, and only if the disease was pre-existing. The decision-maker must determine whether the claimant’s service prevented them from receiving timely diagnosis or treatment, and whether that worsened the prognosis. This is a high bar and requires specific evidence, such as being deployed to a remote area without medical facilities.

Finally, practitioners should be aware that the SoP can be used defensively. If the DVA intends to reject a claim on the basis that no factor exists, it must provide reasons. The practitioner can challenge those reasons by arguing that a factor does exist based on the medical evidence. If the DVA misapplies a definition, that is grounds for review. Keeping thorough records of all medical evidence and its timing is the key to successful compliance.