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No.14 July 2008

Cadd v Repatriation Commission

COURT Federal Court, Adelaide
JUDGE Finn J
DATE OF DECISION 8 July 2008
DECISION Appeal dismissed
ISSUES Meaning of “ceasing to engage in remunerative work” in s 24(2)(a)(i)

Facts

Mr Cadd applied unsuccessfully for a special rate of pension under s 24 of the Veterans’ Entitlements Act 1986 (VEA). At the time of his application for a special rate of pension, he was in receipt of a pension at the general rate for post-traumatic stress disorder (PTSD) and other war-caused disabilities. He sought review of that decision in the Administrative Appeals Tribunal (AAT).  He appealed from the decision of the AAT to the Federal Court.

The Tribunal’s reasoning

The Tribunal characterised that type of work in Mr Cadd’s case as “a club manager” and found that his PTSD alone would prevent employment for more than eight hours per week. In considering whether s 24(1)(c) was satisfied the Tribunal indicated the decisive issue was whether the exclusionary provisions of s 24(2)(a)(i) of the VEA applied to Mr Cadd’s circumstances. The Tribunal held that these provisions did apply saying:

The Tribunal finds that in 2003, the year Mr Cadd resigned from the Club, his psychiatric symptoms were not such as to allow a diagnosis of PTSD to be made.  The diagnoses made by Dr Ewer in 2003 were, in April, pathological gambling and adjustment disorder with depressed mood and in August, again pathological gambling, this time in remission, together with adjustment disorder with depressed mood and alcohol dependence, also in remission.

The Tribunal has considered Mr Cadd’s evidence to the effect that he attempted to find employment after his resignation from the Club.  However, on balance, the Tribunal finds that with effect from 1 March 2003, that is the day after Mr Cadd resigned his employment with the Club, Mr Cadd had “ceased to engage in remunerative work”.  The effect of this finding is that, pursuant to s 24(2)(a) of the VE Act, Mr Cadd is deemed not to satisfy the second limb of s 24(1)(c), that is he 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 his incapacity from accepted disabilities…

Grounds of appeal

Mr Cadd appealed to the Federal Court on the ground that the Tribunal applied the wrong test in determining that his circumstances brought him within the exclusionary provisions of s 24(2)(a) of the VEA. Specifically, Mr Cadd submitted that the Tribunal had misapplied the law by focussing on why he ceased a particular job and not upon why, if it was the case, he ceased to be engaged in remunerative employment.

The Commission’s position

The Commission submitted that the Tribunal asked and answered the correct question, ie whether a state of affairs had been reached such that it could properly be said that Mr Cadd was no longer engaged in remunerative work.  The Commission said that the Tribunal had considered all of the medical evidence and Mr Cadd’s oral evidence at hearing and found, in effect, that he ceased to engage in remunerative work on his resignation for reasons related to conditions from which he then suffered which were not war caused.

The Court’s Consideration

Justice Finn was satisfied that the Tribunal had not misapprehended and misapplied the test in  s24(2)(a)(i) of the VEA.  His Honour considered that the Tribunal understood and asked itself the question required to be asked when considering whether in the circumstances a veteran ceased to engage in remunerative work for reasons other than his war-caused incapacity and disease.  His Honour agreed with the Commission’s submission that the Tribunal addressed the evidence – both medical and of Mr Cadd – that related to that question. His Honour said:

[15]…In light (i) of the events which occurred since he ceased to have remunerative work in February 2003, ie his persistent inability to get work;  (ii) of his medical condition at February 2003 until the onset of PTSD in 2004;  and (iii) of his own appreciation, albeit for the most part in retrospect, of his fitness for work (but compare his 18 March 2003 application noted by the Tribunal (at [13] of its reasons)), the conclusion that Mr Cadd ceased to engage in remunerative work for a reason other than incapacity from war-caused condition was one that clearly was open to it.

In addition, Justice Finn noted:

[16] At best the appeal seeks a review on the merits of the Tribunal’s decision. Such is not permissible.

Formal decision

Justice Finn was satisfied that the Tribunal did not apply the wrong test in determining that Mr Cadd’s circumstances brought him within the exclusionary provisions of s 24(2)(a) of the VEA. As such, Mr Cadd’s appeal was dismissed.

Editorial Note

Section 24(2)(a) provides that a person will not be able to satisfy the “loss of earnings” test if there are other reasons that are also causally related to his or her having ceased to engage in work or related to the person’s being prevented from engaging in work.

In Mr Cadd’s case the Tribunal considered whether, in his particular circumstances, it could properly be said that he was no longer engaged in remunerative work.  The Tribunal took the view that Mr Cadd had ceased in his normal line of work as a club manager for some other reason (ie. resignation related to pathological gambling, adjustment disorder and depressed mood which were not war caused) and that he had not worked since.  The Tribunal considered the evidence that Mr Cadd had attempted to find employment after his resignation but also considered his oral evidence at hearing that he considered himself unfit for any employment since his resignation from the Club. This latter evidence would seem to indicate that Mr Cadd had no definite plans to go to another job, or that his war caused PTSD had intervened to prevent that happening. As such, it was clearly open to the Tribunal to find that the other reasons (ie. resignation due to pathological gambling, adjustment disorder and depressed mood which were not war caused) were the reasons why Mr Cadd had ceased to engage in remunerative work, and therefore the reason why he was not entitled to pension at the Special Rate. The Federal Court agreed that this finding was open to the Tribunal.

Whether or not s 24(2)(a) will apply to exclude a person from obtaining the special rate of pension will always depend on the circumstances of each individual case. In cases where a person leaves a job for any number of reasons, the operation of s 24(2)(a) will not necessarily prevent them from being awarded the special rate of pension.  For example, if a person resigned with the intention of going to a new job, but his or her accepted disabilities, alone, intervened to prevent him or her from doing so, then the person’s resignation is not the reason why he or she has ceased to engage in work.

Further reading:  Please see pages 30 to 33 of  VeRBosity Special issue: Special rate of pension

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