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Smith v Repatriation Commission

[2014] FCAFC 53

COURT Full Federal Court, Melbourne
JUDGEs Rares, Buchanan and Foster JJ
DATE OF DECISION 1 May 2014
DECISION The appeal was allowed
ISSUES Application for increase to rate of pension – whether efforts to obtain work before the assessment period were relevant – whether entitlement to intermediate rate of pension should also have been considered.

Facts

Mr Smith appealed to the Federal Court from a decision of the Administrative Appeals Tribunal (AAT) that determined he was not entitled to the special rate of pension. In its decision the AAT determined that in relation to s24(2)(b) of the VEA,  Mr Smith’s attempt to obtain remunerative work had not occurred during the assessment period. The AAT therefore held that Mr Smith did not satisfy s24(1)(c) of the VEA and was not eligible for special rate. Gordon J of the Federal Court dismissed the appeal. Mr Smith then appealed to the Full Federal Court.

Appeal to the Federal Court  and decision of Primary Judge

The main question of law raised by the appeal was whether a failure by a veteran to take active steps during the assessment period to obtain remunerative work precludes a finding that he has been genuinely seeking to engage in remunerative work.

The AAT interpreted the phrase “genuinely seeking to engage in remunerative work” as requiring that Mr Smith demonstrate he had been genuinely seeking work during the assessment period. The AAT noted there was no material before it to demonstrate that Mr Smith made a real effort to obtain work at any time during the assessment period.

Decision of Gordon J

The Federal Court agreed with the reasoning of the AAT and dismissed the appeal. However, the Court went on to say that  s24(2)(b) deals with veterans who, following military service, cannot work. The Court noted it applies to a veteran “who has not been engaged in remunerative work”. Mr Smith had a work history and was therefore a person who needed to satisfy s24(1)(c). Section 24(1)(c) refers to “remunerative work that the veteran was undertaking”. Section 24(2)(b) simply refers to “remunerative work”. That phrase in s24(2)(b) would extend to remunerative work that he would, but for the incapacity, be continuing so to seek. It cannot refer to work the veteran has actually undertaken because the section is directed to veterans who have not been engaged in remunerative work.

Issues of law before the Full Federal Court

 Grounds of appeal to Full Federal Court

  1. Does s24(2)(b) of the VEA Act apply only to veterans who have no work history following military service.
  2. Does 24(2)(b) of the VEA Act require a veteran to satisfy the relevant decision-maker that he or she had been genuinely seeking remunerative work during the assessment period.
  3. Does 24(1)(c) of the VEA Act require identification of the remunerative work that the veteran was undertaking before he or she became incapacitated and does that subsection require consideration of whether the veteran’s incapacity was attributable to the veteran’s war caused injury or war caused disease alone, and if not, does that subsection require a determination whether the veteran’s incapacity was the substantial cause of the veteran’s inability to obtain remunerative work in which to engage?

The Full Court’s Consideration and Decision

The Full Court came to the conclusion that efforts to obtain employment before the commencement of the assessment period could also be taken into account when deciding whether genuine efforts had been made for the purposes of s24(2)(b).

The Full Court also noted that that s24(2)(b) was not confined in its operation to veterans who did not or could not work following military service.

Failure to address whether s23 applied to the veteran was also considered to be an additional ground to set aside the decision.

Justices Rares, Buchanan and Foster each gave separate reasons for their judgment.

Reasons for Judgment - RARES J

Justice Rares noted that the primary Judge held that because Mr Smith had a work history, he needed to satisfy s24(1)(c) and that the benefits of s24(2)(b) could never apply to him. The primary judge reasoned that the expression “who has not been engaged in remunerative work” in s24(2)(b) supported that construction.

Justice Rares considered this reasoning to be incorrect.

Section 24(2)(b) can apply to a veteran who has never been engaged in remunerative work and to one who had, but for any reason, subsequently ceased work, and later sought to obtain remunerative work.

Justice Rares also considered the veteran must sincerely or honestly be doing something in an attempt to try to engage in remunerative work. In  Leane ‘s case  it was held that it was not essential that there be objective signs of active pursuit or work. They gave an example of a veteran who honestly wished to engage in remunerative work, had made a reasonable assessment of his or her disabilities, had reasonably concluded that he or she could only be employed in a particular type of work, was checking employment advertisements on the lookout for such work, but had not yet identified any such employment prospect.

Justice Rares also determined that s23(3)(b) could be relied on by a veteran who genuinely has been seeking to engage in more, or greater amount of, remunerative work. The genuine seeking referred to in s23(3)(b) will usually be in relation to obtaining increased hours of work over and above what the veteran has been able to achieve.

Justice Rares noted the reason that a veteran would wish to apply for pension under s23 is because, despite his or her attempts to get more work, it is not available when the application under s15 is received. Subsequent attempts to obtain more work may be relevant, but they cannot be essential for the decision-maker’s assessment. That is because the existing facts, at the commencing date of the assessment period often will reflect that the veteran at that date has been genuinely seeking to engage in remunerative work ie ss23(3)(b) and 24(2)(b) refer to historical seeking, and do not require subsequent genuine seeking of remunerative work.

Reasons for Judgment - BUCHANAN J

In Justice Buchanan’s view s24(2)(b) accommodates a cessation of earlier remunerative work as well as a circumstance where a veteran has not worked since injury or since incapacity.

Justice Buchanan also disagreed with the primary judge, who took the view that s24(2)(b) only operated where a veteran had not been engaged in remunerative work at all since becoming incapacitated. This approach of the primary judge appears to have been accepted in the recent Federal Court case of Richmond. This view was not the approach the Full Court stated should be applied.

Justice Buchanan’s view was that the test in s24(2)(b) is one to be applied at the time when the assessment is required to be made under s19(5C). A veteran who has not been engaged in remunerative work at a particular point in time (i.e. before or during the assessment period) may nevertheless satisfy s24(1)(c) by demonstrating that there has been a genuine effort to engage in remunerative work, which effort would continue but for the incapacity.

Justice Buchanan noted at [52]:

On the view taken by the AAT, the appellant was disentitled to the benefit of s24 by reason of the fact that s24(2((a)(i) applied to the remunerative work that he had earlier been undertaking, namely that he ceased that work for reasons other than his accepted incapacity. The AAT then took the view that efforts to find work earlier than the assessment period should not be taken into account so that s24(2)(b) was not engaged. The latter finding, in my respectful view, was an error of law which was not corrected by the primary judge.

Justice Buchanan considered the AAT made two errors of law.

  1. the AAT disregarded the efforts made by the applicant to obtain work before the commencement of the assessment period.
  2. there was a requirement to address whether any entitlement arose under s23. Such an assessment is prima facie required by s19(5C) and (6) of the Act.

Justice Buchanan noted in particular at [70]:

I see no reason why a veteran would be disentitled to make an application for an increase in pension if he or she had ceased to work for particular reasons at one point in time, then commenced genuine efforts to find work and was prevented only by a war caused injury or disease from obtaining such work. Ceasing to work at a particular time for reasons other than war caused injury or disease, including for reasons which might be entirely beyond the control of the veteran (such as redundancy), is not a permanently disentitling circumstance. Nor is it necessary to make efforts during an assessment period which might be futile and humiliating if there is adequate evidence before an application is made that genuine efforts have been made to obtain employment.

Reasons for Judgment -  Foster J

Justice Foster noted the primary judge held that s24(2)(b) applies only to veterans who have not been engaged in any remunerative work since ceasing military service. Justice Foster respectfully disagreed and noted the starting point for considering whether s24 is engaged at all in any given case is a finding that the veteran is totally and permanently incapacitated (within the meaning of s24(1)(b)) from a war caused condition. Also noting that such incapacity may be complete at the point in time when the veteran ceased military service or it may only become complete at some later time. It is the veteran’s incapacity which triggers the potential engagement of s24, not the cessation of his or her military service.

Justice Foster considered that a veteran who has not worked at all since becoming incapacitated or who has ceased engaging in remunerative work for reasons which include incapacity brought about by war caused injury will be and should be entitled to a pension at a higher rate if he or she has been genuinely seeking to engage in remunerative work.

He determined that there is no requirement in the VEA for the purpose of s24(2)(b), that the veteran be genuinely seeking work during the assessment period.

Justice Foster stated at [185]:

The correct position is that the criteria for securing an increase to a higher rate of pension laid down in s23 and s24 must be satisfied at some time during the assessment period. This is the effect of the language of the statute (ss19(5C), 19(6), 23 and 24) and the Full Court decision in Leane v Repatriation Commission [2004] FCAFC 83. In considering whether those criteria have been met at any time in the assessment period, the Court is entitled to have regard to circumstances which obtained prior to the commencement of that period.

Justice Foster also considered s24(1)(c) does require the identification of the remunerative work that the veteran was undertaking before he or she became incapacitated.

Decision

Appeal was allowed with costs and the decision of the Tribunal set aside. The matter be remitted to the Tribunal for further consideration by it according to law and in light of the Full Court’s judgment. The Full Court in particular noted that further consideration should relate to the whole of the appellant’s application for a pension increase.

Note:

Specifically, the Full Court clarified the position in relation to what is required when demonstrating a genuine effort to obtain employment in order to gain the benefit of s24(2)(b). The issue arises where there are other factors preventing satisfaction of 24(1)(c) but the substantial cause of prevention is the war caused conditions. The benefit only arises where the applicant can demonstrate a genuine effort to obtain work.

The Full Court considered the earlier Federal Court judgments in Smith v Repatriation Commission [2012] FCA 1043 and Richmond v Repatriation Commission [2014] FCA 272 erred on this point of law. Those  cases indicated that the genuine effort to obtain employment can only be during the assessment period.

In this case the Full Court clearly stated that efforts to obtain employment before the commencement of the assessment period could also be taken into account.

The Full Court also noted that s24(2)(b) was not confined in its operation to veterans who did not or could not work following military service.  

All Practice Notes