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Repatriation Commission v Richmond

[2014] FCAFC 124

COURT Federal Court, Melbourne
JUDGE Middleton, Murphy & Rangiah JJ
DATE OF DECISION 26 September 2014
DECISION The appeal was partly allowed
ISSUES Special rate of pension under s 24(1)(c) – whether applicant alone prevented from engaging in remunerative working by war-caused injuries

Facts

The respondent, Mr Richmond, served in the Australian Army from 1966 to 1968 and had operational service in Vietnam between April and December 1967. He suffers from a number of medical conditions which the Commission accepts as war caused: hyperkeratosis, basal cell carcinoma, bilateral sensorineural hearing loss, bilateral tinnitus, non melanotic malignant neoplasm of the skin, alcohol dependence and anxiety disorder.

On 14 February 2011 a delegate of the Commission decided Mr Richmond was not entitled to a special rate of pension. The decision was affirmed on review by the Veterans’ Review Board and the Administrative Appeals Tribunal (the Tribunal). Mr Richmond appealed to the Federal Court, and his appeal was allowed. The primary judge set aside the Tribunal decision, and remitted the matter to a differently constituted Tribunal to be determined according to law. The Commission now appeals to the Full Court.

Grounds of appeal

In its Notice of Appeal, the Commission alleged that the primary judge erred in the construction and application of s 24(1)(c) of the Act, but it did not challenge the orders setting aside the Tribunal decision and remitting the matter for rehearing (as it accepted the primary judge’s finding that the Tribunal fell into error in respect of other issues).

The Primary judgment

The Full Court substantially agreed with the primary judge’s construction of s 24(1)(c), but considered her Honour placed a gloss on the provision which does not assist in its proper understanding. The Full Court disagreed with her Honour’s approach in that small regard.

The Full Court noted the primary judge set out her approach to the construction and application of the first limb of s 24(1)(c) at paras [116]-[120] of her decision:

[116] The Tribunal did not expressly or implicitly recognise any material distinction between, on the one hand, factors which cause, or contribute to causing, 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 Tribunal appeared to treat the two concepts interchangeably, or at least, proceeded on the basis that a factor of the latter kind was fatal to the satisfaction of the “alone” test in the third Flentjar question.

[117] In my opinion, 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. As Dowsett J recognised in Peacock, the third Flentjar question concerns the latter, not the former.

[118] The language, structure and context of s 24(1)(c), in my view, indicates that contrary to the respondent’s submission, the “alone” test in the first limb is defeasible only by factors additional to the veteran’s warcaused condition which prevent or contribute to preventing, the veteran’s continued undertaking of the relevant work. To prevent an activity, according to its ordinary meaning, is to prohibit, disable or restrain, rather than to induce or provide a reason or incentive for action which a person remains capable of taking. The third Flentjar question, although similar to the question in s 24(1)(b) is not identical. It does not follow that because the requirements of s 24(1)(b) are satisfied, those of the third Flentjar question are also satisfied. The first limb of s 24(1)(c) refers to, an incapacity (from war-caused conditions) which “prevents”. That language indicates a factor which imposes an involuntary barrier to the relevant activity. Whether such an incapacity alone prevents an activity, in my view, necessarily requires consideration of whether there are any other factors which impose an involuntary barrier.

[119] The first limb of s 24(1)(c) and the third Flentjar question thus require consideration of whether there are any other factors preventing, in the sense of hindering or disabling, the veteran’s continued undertaking of the relevant work, and not whether there are any other reasons generally for stopping work.

[120] The relevance of inducements and incentives voluntarily to decide not to continue to undertake work is, in my view, as Dowsett J held in Peacock confined to the fourth Flentjar question.

The primary judge considered that, although the question as to whether an incentive or inducement voluntarily to cease work, despite being capable of continuing to work, did not arise in Flentjar and Hendy, the tenor and reasoning in these cases and Forbes v Repatriation Commission [2000] FCA 328 was consistent with the view that inducements and incentives and other elective factors cannot operate to prevent a veteran from continuing to undertake the relevant remunerative work under the first limb of s 24(1)(c).

The Court's consideration

At the outset the Full Court clearly set out the two limbs of s 24(1)(c):

The causal link required by the first limb has three elements:

  1. “by reason of” the veteran’s war-caused incapacity;
  2. the veteran is “alone (i.e. not for other reasons);
  3. “prevented from”;
    continuing to undertake the remunerative work that the veteran was undertaking.

The “prevented” element of the test
It was the view of the primary judge that the prevented element of the test could only be satisfied by factors which “prohibit, disable or restrain” the veteran from continuing to engage in the remunerative work, and not by factors which induce or provide the veteran an incentive to cease that work. The Commission argued this distinction creates an unjustifiable and artificial distinction, and all factors that may contribute to a veteran being prevented from continuing to work should be considered.

The Full Court did not accept the Commission’s contentions, but rejected her Honour’s gloss on the word “prevented” which included statements that satisfaction of the test requires an “involuntary barrier” or requires factors which “prohibit, disable or restrain” (see para 118 of the primary judgment above). The Full Court was of the view that the ordinary meaning of “prevented” in s 24(1)(c) was unambiguous and there was no requirement to use other words or expressions. Under the first limb of s24(1)(c) the ordinary meaning of “prevented from” does not include voluntary or elective choices to cease work for a reason other than incapacity, and acceptance of the Commission’s argument would mean that “prevented from” includes “chooses not to”.

In reviewing the case law, the Full Court agreed with conclusion of Dowsett J in Peacock v Repatriation Commission [2004] FCA 1449, that factors such as the availability of the veteran’s superannuation benefits may have been an incentive for him to retire, but it could not have prevented him from engaging in remunerative work.

The Court's decision

Order 2 of the orders made by the primary judge were set aside, and in lieu thereof the matter was remitted to the Tribunal, differently constituted, for determination according to law. The appeal was otherwise dismissed.

Editorial Note

The Full Court noted under the second limb of s 24(1)(c), s 24(2)(a)(i) makes specific provision for the situation where a veteran, for reasons unrelated to war-caused incapacity, has voluntarily decided to leave his or her remunerative employment. The Full Court accepted that this means a veteran who voluntarily chooses to cease remunerative work for reasons other than war-caused incapacity (e.g. to access superannuation benefits or because of dissatisfaction with work unrelated to war-caused injuries) will usually not be eligible for the special rate, as he or she will usually be unable to establish financial loss by reason of his or her war-caused incapacity.

For further details about the primary judgment please refer to the earlier practice note regarding Richmond v Repatriation Commission on the VRB website.

All Practice Notes