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Watkins v Repatriation Commission

[2014] FCA 787

COURT Federal Court, Melbourne
JUDGE Bromberg J
DATE OF DECISION 29 July 2014
DECISION The appeal was allowed
ISSUES Whether a disqualifying feature of the criteria in s24(1)(c) is the existence of non war caused disabilities which contribute to but which do not of themselves prevent the veteran from undertaking remunerative work

Facts

Mr Watkins appealed a decision of the Administrative Appeals Tribunal that refused to grant a special rate pension.

The appeal to the Federal Court consisted of a number of questions of law.

However, the Federal Court found the Tribunal erred on only one question. The Tribunal misconstrued s24(1)(c).

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.

Section 24(1)(c) issues

The Court noted the main issue in contention was whether a disqualifying feature of the criteria is the existence of non-war caused disabilities which contribute to but do not themselves bring about the preventative effect from working.

Bromberg J expressed his view that the “alone” element is concerned with whether beyond the war caused ailments as a cause of the preventative effect, there is another or other causes that have also brought about the preventative effect.

Willis and Forbes cases

As Bromberg J said at [28]

…in Willis at [28], the assessment to be made does not look to combinations of the kind which was referred to in Forbes at [39], because it proceeds on the basis that the war caused ailments must of themselves, unaided by other factors, be causative of the preventative effect. Once that is appreciated, it must logically follow that the alone element is addressing whether another factor with the same preventative effect exists.

Gordon J decision in Smith

The Court noted what Gordon J indentified in Smith v Repatriation Commission [2012]FCA 1043 as the question posed by 24(1)(c), in that it requires the AAT undertake a hypothetical exercise. What would the veteran have done but for the war caused incapacity? If the answer is the same, then that war caused incapacity cannot be said to have been the reason, rather than merely a reason, for the veteran’s inability to engage in the remunerative work which the veteran had previously done.

The Court noted that the first instance judgment in Smith was the subject of further appeal. However the approach to the alone test followed by Gordon J was not the subject of that appeal.

Buchanan and Foster J  decision in Smith (No 2)

The Court also noted that there were a number of aspects of the Full Court’s decision in Smith (No 2) which were of assistance and that Buchannan and FosterJJ made observations consistent with the approach taken by Gordon J in relation to the ‘alone’ element.

The operation of s24(1)(c) was noted at [48] of that decision:

…s24(1)(c) is capable of being informed by the provisions of s24(2). The overall effect of s24(1)(c) may be summarised as one which requires a demonstrated loss of earnings as the direct result of the war related incapacity, and only for that reason. Section 24(2)a supplements the requirements of s24(1)(c) by indentifying specific circumstances which will cause it not to be satisfied. Those circumstances, in effect, state the opposite conditions in s24(1)(c) itself.. . Thus, there is no established loss of earnings by reason of the incapacity if remunerative work was ceased for other reasons ( s24(2)(a)(i)) , or if the veteran is also incapacitated or prevented from doing remunerative work for some other reason (s24(2)(a)(ii). In this assessment of course it continues to be accepted that the veteran is actually incapacitated in any event. The purpose of the enquiry is to see whether, nevertheless, there are other explanations for economic loss so that incapacity is not the only reason for it.

As noted By Buchanan J, the assessment required to be made is based upon an acceptance that the veteran is incapacitated from working by reason of his or her war caused ailments. The purpose of the enquiry is to see whether, nevertheless, there are other explanations for the economic loss caused by the veteran’s inability to work. The Court also noted that such an enquiry must necessarily put to one side the preventative effect of the war caused ailments. The necessity for those other cause to, of themselves, prevent the veteran from working is reflected in the concern Buchanan J expressed as to the AAT’s failure to quantify the extent to which Mr Smith’s physical injuries affected his capacity to work.

The Court's consideration

The Court concluded that where a veteran suffers from both war caused ailments and non war caused disabilities, the correct approach to the alone element posed by the first causative limb of the s24(1)(c) criteria is to ask whether, putting aside the veteran’s war caused ailments and their consequences, the veteran’s non war disabilities prevent the veteran from continuing to undertake the remunerative work that the veteran was undertaking? If the answer to that question is yes, it will follow that the veteran’s war caused ailments are not the only cause and are not “alone” in preventing the veteran from working. In that case, the s24(1)(c) criteria will not be satisfied. Alternatively, if the answer is no, it will follow that the veteran’s war caused ailments are the only cause preventing the veteran working and the first causative limb of s24(1)(c) will be satisfied.

The AAT's decision

The Court considered it was necessary for the Tribunal to determine, putting to one side Mr Watkins’ war caused ailments and their consequences, whether Mr Watkins’ non war caused disabilities prevented him from undertaking remunerative work as a fire fighter. On the facts as found by the Tribunal, if the answer to that question was yes, the Tribunal was entitled to reject Mr Watkins’ application for the special rate. If the answer was no, the Tribunal then needed to consider whether Mr Watkins was suffering a loss of salary or wages by reason of his war caused ailments that he would not have suffered if he were free of that incapacity.

The Court was of the opinion the Tribunal turned to consider whether the existence of non war factors had impacted upon the veteran’s ability to work rather than the proper question whether the non war factors had caused that inability.

The Tribunal stated at [40]:

The Tribunal finds it unlikely that a person with Mr Watkins’ health history would be employed as a fire fighter. He was almost 64 years of age at the beginning of the assessment period. It was then four years since he had actually worked as a fire fighter. There are onerous physical requirements for those working as fire fighters as well as medical standards to be met. An examination of Mr Watkins’ medical history, which included chronic headaches and ataxia at the time he stopped working with those conditions continuing for some time thereafter would be likely to rule him out of such a role as would his accepted disabilities. His age and time out of the workforce would also be likely to rule him out of reappointment to a similar role. The answer to the third Flentjar question is therefore no.

The Court noted the opening sentence of the Tribunal contained its ultimate finding. That finding was that it is unlikely that a person with Mr Watkins’ health history would be employed as a fire fighter. The reference to health history is an obvious reference to the combination of Mr Watkins’ war caused and non war caused ailments.

Specifically the Court noted that at no point in its decision did the Tribunal identify as a possibility, let alone adopt the proposition, that the correct question for it to consider was whether Mr Watkins’ non war caused disabilities, looked in isolation from his war caused ailments and their consequences prevented Mr Watkins from resuming work as a fire fighter.

In Bromberg J’s view the Tribunal misconstrued the meaning of s24(1)(c) and did not address the proper question raised by the first causal limb.

The Court's Decision

The appeal was allowed.

Editorial note

For further guidance on the operation of s24(1)(c) please refer to the recent Full Court decision and practice note in Smith v Repatriation Commission [2014] FCAFC 53.

A recent example of how the AAT is applying that case to the facts is seen in the remittal decision of Willis v Repatriation Commission [2014] AATA 326.

All Practice Notes