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Richmond v Repatriation Commission

[2014] FCA 272

COURT Federal Court, Melbourne
JUDGE Dodds-Streeton J
DATE OF DECISION 25 March 2014
DECISION TThe appeal was allowed
ISSUES Whether applicant was prevented from working by war caused injuries alone and whether Tribunal misconstrued s24(1)(c) and the questions indentified in Flentjar

Facts

The applicant, Mr Richmond suffers from a number of medical conditions which the respondent accepts as war caused: hyperkeratosis, basal cell carcinoma, bilateral sensorineural hearing loss, bilateral tinnituis, non melanotic malignant neoplasm of the skin, and alcohol dependence and anxiety disorder.

On 14 February 2011 a delegate of the Commission decided the applicant was not entitled to a special rate of pension. This decision was affirmed by the Veterans’ Review Board on 10 November 2011 and affirmed by the AAT on 20 June 2013.

The applicant appealed to the Federal Court.

The main issue in the appeal was whether the AAT erred in holding the applicant was not eligible for a pension at the higher rate because it misconstrued s24(1)(c) of the VEA and the questions identified in Flentjar v Repatriation Commission[1997] FCA 1200.

Grounds of appeal

The applicant’s amended notice of appeal set out the following grounds:

  1. The Tribunal misapplied s24(1)(c) of the Act and the decision in Flentjar v Repatriation Commission by asking itself the wrong question and/ or identifying a wrong issue when it found that
    1. the applicant’s age and frustration at the teaching environment added to his decision to stop working; and
    2. the applicant ceased work also because of his age and these matters were factors that prevented the applicant from working more than eight hours a week during the assessment period.
  2. The Tribunal erred in the application of s24(1)(c) of the Act in that it:
    1. failed to enquire into the hypothetical position that would have been obtained if the applicant was not incapacitated due to his war caused disability; and
    2. erred in using consequences of the applicant’s war caused disability as a reason to deny entitlement to the special rate of pension,
  3. The Tribunal properly failed to accord procedural fairness to the applicant by failing to respond to a substantial, clearly articulated argument that the applicant’s frustration at the teaching environment was a consequence of his war caused psychiatric injury.
  4. The Tribunal failed to provide adequate reasons for its decision.

The Court’s consideration

The Court’s consideration in the appeal centred on the four questions which a decision maker should consider and address in applying s24(1)(c) of the Act. These questions were set out by Branson J in the Flentjar decision:

Flentjar questions

  1. What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s24(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?

The grounds of appeal in this case involved a consideration of the third and fourth questions in Flentjar.

The Tribunal decision in relation to the Flentjar questions

In response to the first Flentjar question the Tribunal found that the remunerative work undertaken by the applicant was as “a trade teacher, boilermaker and boat operator”.

It also found that the answer to the second Flentjar question was “yes”, based on the evidence from medical practitioners that the applicant was prevented from working more than eight hours per week in any of his previous roles.

The Tribunal then referred to the third Flentjar question and stated:

[62] In respect of question 3, [the applicant] has emphasised the impact of his accepted war caused conditions on his inability to work. He lodged the application which is the subject of this review in August 2007, more than two and a half years after he has resigned from Goulburn Ovens and more than two years after his short resumption of teaching at the Gordon Institute in mid 2005. He was 62 years old at the start of the assessment period and is now 68 years of age. It is now eight years since he stopped working and he has not undertaken remunerative work since lodging the claim ….

The Tribunal then concluded:

[63] The Tribunal is not satisfied that [the applicant’s] accepted war caused disabilities are the sole factors that have prevented him from working for more than eight hours per week during the assessment period. The Tribunal finds that [the applicant’s] age and frustration at the teaching environment were two of the additional factors adding to his decision to stop working. His leave records show that he was a conscientious employee. He did not take time off because of his accepted war conditions except during 2002 when his chest pains were under investigation. The Tribunal finds that [the applicant] ceased work as a trade teacher due to his accepted disabilities but also because of his age.

[64] The answer to the third Flentjar question is no.

[65] There is no evidence that [the applicant] has sought work since… January 2010. The Tribunal is not satisfied that he meets 24(2)(b) of the Act.

The Court’s consideration of each ground of appeal

Ground 1

The Tribunal misapplied s24(1)c of the Act and the decision in Flentjar v Repatriation Commission by asking itself the wrong question and/or identifying a wrong issue when it found that

  1. the applicant’s age and frustration at the teaching environment added to his decision to stop working; and
  2. the applicant ceased work also because of his age and these matters were factors that prevented the applicant from working more than eight hours a week during the assessment period.

The Court noted s24(1)(c) may be divided into limbs, each of which may be amplified or qualified by another provision of s24.

The first limb of s24(1)(c) is:

(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…

That limb is read subject to the application of s24(2)(b) which states:

(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 the 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.

This section is ameliorative as a veteran who has not been engaged in remunerative work may still satisfy the alone criterion in 24(1)(c) if satisfies 24(2)(b).

Gordon J described s24(2)(b) in Smith v Repatriation Commission:

It operates when the veteran has not been engaged in remunerative work. Next, if the conditions are satisfied, it operates as a deeming provision. It creates a fiction – it treats a veteran not engaged in remunerative work as “having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking”

Section 24(2)(b) operates to ameliorate the effect of s24(1)(c) in two important ways:

  1. it extends the class of veterans entitled to make an application for a pension at the special rate to include veterans who have not been engaged in remunerative work; and
  2. it provides that the veteran’s war caused injury or war caused disease need not be the sole cause but must be a “substantial cause” of his or her inability to obtain remunerative work.

The second limb of s24(1)(c) is:

(c) the veteran… is, by reason thereof, suffering a los of salary or wages, or of earnings on his own account, that the veteran would not be suffering if the veteran were free of that incapacity;..

That limb is to be read with s24(2)(a), which provides:

For the purpose of paragraph 1(c):

  1. 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 her own account, by reason of that incapacity if;
    1. 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
    2. the veteran is incapacitated, or prevented from engaging in remunerative work for some other reason…

The Court noted the different subparagraphs (b) and (c) of 24(1) were explained by Spender J in Alexander:

Section 24(1)(b) addresses the severity of incapacity from war caused injury or war caused disease. It imposes a requirement, for the special rate of pension with which s24 is concerned, that the veteran be totally and permanently incapacitated, which is defined by s24(1)(b) to be an incapacity from war caused injury or war caused disease or both to be 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.

Section 24(1)(b) thus addresses the extent of the veteran’s war caused incapacity. Section 24(1)(c) is directed at a quite different question, causation. Section 24(1)(c) requires that the veteran’s war caused incapacity, and only that war caused incapacity, prevented the veteran from continuing to undertake remunerative work that the veteran was undertaking.

Section 24(1)c is a “sole cause” requirement. The subsection contains the requirement that incapacity from war caused injury or war caused disease or both “alone” prevents a veteran from continuing to undertake remunerative work that the veteran was undertaking.

The Court also noted that s19(5C) “introduces the notion that the respondent’s inquiry is restricted to the assessment period”. The “assessment period” is defined in s19(9) to mean the period starting on the application day and ending when the claim or application is determined.

The Court also stated that the four questions articulated by Branson J in Flentjar have been endorsed in subsequent authority as embodying the correct approach to the application of s24(1)(c).

The Court went on to say at [106]

It is well established that, in the context of the first Flentjar question, the Tribunal must consider the remunerative work that the veteran was undertaking. Such work “does not mean a particular job with a particular employer but the substantive work that the veteran had undertaken in the past”: Hendy at [36].

The Court also noted at [108]

The authorities in my view establish that if there is a non war caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing , the “ alone test will not be satisfied.

[109] However a factor which prevents or contributes to preventing the veteran from continuing to undertake the remunerative work, but is itself the consequence of the veteran’s war caused condition, will not constitute an independent preventative factor for the purpose of defeating the “alone” requirement in s24(1)(c).

In the present case the Court noted the Tribunal was required to consider and determine whether there were any factors other than the applicant’s war caused condition that played a part in, or contributed to, the veteran’s being prevented, during the assessment period commencing on March 2007, from continuing to engage in remunerative work as a trade teacher, boiler maker and boat operator. It was also required, having considered any or all of the factors which contributed to a veteran’s incapacity, to determine “whether incapacity from the relevant condition alone prevents a veteran from continuing to undertake remunerative work”.

The Court considered the Tribunal made no finding that there was any factor which prevented or contributed to preventing the applicant from undertaking remunerative work. Rather the Tribunal considered factors which caused or contributed to the applicant’s “decision to cease remunerative work”, including the applicant’s attaining 60 years of age and his dissatisfaction with the conduct of students and management practices in the TAFE system.

The Court considered the Tribunal did not recognise any material distinction between factors which cause an inability or incapacity to continue to undertake work and on the other hand, incentives or reasons for the applicant deciding not to continue it.

The Court considered at [117]

The Tribunal erred in treating in the context of the third Flentjar question, a factor acting as an incentive or influencing a decision voluntarily to cease to work as equivalent to a factor which prevents, or contributes to preventing, a veteran from continuing to undertake the relevant remunerative work.

The Court went on to say at [118]

The alone test in the first limb is defeasible only by factors additional to the veteran’s war caused condition which prevent or contribute to preventing, the veteran’s continued undertaking of the relevant work.

The Court also considered the relevance of inducements and incentives voluntarily to decide not to continue to undertake work is confined to the fourth Flentjar question.

It noted the Tribunal addressed only the reasons for the applicant’s ceasing work as a trade teacher and to some extent as a boat operator. The Court noted the Tribunal did not make the distinction between a factor preventing continued work and a factor inducing the veteran to cease work, it also failed to address the relevant occupations as required by Flentjar.

It failed to address the situation during the assessment period and consideration of relevant factors was limited to those up to mid 2005. It cannot be assumed that the factors remained unchanged during the assessment period. Although particular factors may have induced the applicant to cease work in 2005 it could not be assumed that he was not prevented by war caused conditions alone from working during the assessment period.

The Court concluded that the Tribunal failed to ask the hypothetical question which applied to the fourth Flentjar question and failed to consider the assessment period or the range of relevant occupations. In the Court’s view legal error was established in ground 1.

Ground 2A

Failed to enquire into the hypothetical position that would have been obtained if the applicant was not incapacitated due to his war caused disability.

The Court noted that the Tribunal had failed to consider the third Flentjar question and did not address the fourth Flentjar question.

In the Court’s opinion the hypothetical question is also applicable to the third Flentjar question and the first limb of 24(1)(c).

The Court noted the hypothetical question was described by Beaumont J in Smith at [337]:

…The Tribunal must attempt an assessment of what the respondent probably would have done if he had none of his service disabilities. The starting point is an examination of the prospects of employment…

The Court also noted the case of Hendy recognised that at the commencement of the assessment period where the veteran has already been out of the workforce for some time, whether factors such as lack of recent experience or advanced age during the assessment period should be treated as defeating the alone test may depend on an assessment of what the veteran would have done prior to the assessment period but for his war caused illness, which is necessarily hypothetical. If, for example the veteran would not have left the workforce or moved to a different area but for the war caused condition, such factors would be a consequence of the condition rather than an independent preventative factor.

Analysis of the relevant authorities indicates that the hypothetical question is not limited to the fourth question or the second limb of 24(1)(c).

The Court considered although the applicant had been out of the workplace for years prior to the assessment period, the Tribunal, while purporting to discuss the third Flentjar question, considered factors which contributed to the applicant’s decision to stop work in 2005 and it did not address the assessment period. The possibility that advancing age and lack of recent experience were additional preventative factors did not arise. The Tribunal’s failure to ask the hypothetical question in relation to the third Flentjar question to which it was potentially relevant or in relation to the fourth question in the Court’s opinion was an error and ground 2A was established.

Grounds 2B and 3

Erred in using consequences of the applicant’s war caused disability as a reason to deny entitlement to the special rate of pension,

The Tribunal properly failed to accord procedural fairness to the applicant by failing to respond to a substantial, clearly articulated argument that the applicant’s frustration at the teaching environment was a consequence of his war caused psychiatric injury

The Court noted the authorities establish that a consequence of a war caused condition may not be relied on to exclude a veteran from satisfying the alone test in s24(1)(c).

The Court considered there is no basis on which the Court can conclude that the applicant’s frustration was the consequence of the war caused condition.

The court observed that there is a distinction between the Tribunal’s failure to accept the applicant’s frustration as part of his war caused condition, and its failure to consider the applicant’s submissions and evidence on that question.

The Court considered the Tribunal’s observations were too oblique to establish that it recognised and considered the applicant’s submissions. The Court found ground 2B was not established but ground 3 was established.

Ground 4

The Tribunal failed to provide adequate reasons for its decision.

The Court considered the Tribunal’s answer to the third Flentjar question did not follow from its findings. The Tribunal did not sufficiently explain its reasoning on that question. The Tribunal did not make clear whether it deemed it unnecessary to address the fourth Flentjar question and if not, why not. To the extent that it purported to address the second limb of s24(1)(c) by reference to s24(2)(a).

The Tribunal merely stated a conclusion and did not expose its reasoning on which of the alternative criteria in s24(2)a it relied.

The Court therefore considered the Tribunal’s reasons inadequate and the error alleged in ground 4 was established.

The Court’s Decision

The appeal was allowed.

All Practice Notes