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Sheldon v Repatriation Commission

[2014] FCA 1388

COURT Federal Court, Brisbane
JUDGE Collier J
DATE OF DECISION 18 December 2014
DECISION The appeal was allowed
ISSUES Whether Tribunal failed to consider whether applicant satisfied criteria for “intermediate rate” of pension under s23 – whether Tribunal misconstrued phrase “remunerative work that the veteran was undertaking” in s24(1)(c) or the phrase “remunerative work” in s24(1)(b)


The applicant, Mr John Sheldon, had operational service in the Australian Army between 1966 and 1967. He has a number of war-caused conditions, in particular lumbar spondylosis. In September 2010 the applicant sought an increase in his disability pension, to either the “special rate” or alternatively the “intermediate rate”. The respondent declined the increase, and the applicant appealed to the Veterans’ Review Board (VRB). On 11 September 2012 the VRB decided it was not satisfied the applicant qualified for a pension at the special rate. The applicant sought review by the Administrative Appeals Tribunal (the Tribunal), who affirmed the VRB’s decision on 17 April 2014. The applicant then appealed to the Federal Court.

Grounds of appeal

The questions of law for the Court to determined were:

1. Did the Tribunal fail to consider whether the Applicant satisfied the requirements of s 23 of the Veterans’ Entitlements Act 1986 (Cth) so as to qualify for the “intermediate” rate of pension?
2. Did the tribunal misconstrue the phrase “remunerative work that the veteran was undertaking” in s 24(1)(c) or the phrase “remunerative work” in s 24(1)(b) of the Veterans’ Entitlements Act 1986 (Cth) or otherwise adopt an unduly narrow approach to that phrase by considering the particular duties in which the Applicant had been engaged rather than the type of employment undertaken by the Applicant?

The Court’s consideration

Regarding question 1, both parties referred to Smith v Repatriation Commission [2014] FCAFC 53, which post-dated the decision of the Tribunal in the present case, and in which the Full Court had examined in detail s23 and s24 of the Act. In Smith no consideration appears to be given, and no ruling was made, by the Tribunal as to whether Mr Smith was entitled to a pension at the intermediate rate.

The Court was satisfied that the first question of law should be answered in the applicant’s favour. First, and notwithstanding its findings concerning s24, the Tribunal was required by s19(5C) and s19(6) to assess whether the applicant had an entitlement to an intermediate rate of pension under s23 at any time during the assessment period.

Second, the respondent sought to rely on Smith in submitting there was no need for the Tribunal to consider s23, having dismissed Mr Sheldon’s claim under s24. However, the Court considered Smith was distinguishable as the Tribunal was satisfied Mr Smith was rendered incapable of working more than eight hours per week due to his war-caused condition alone and that he satisfied s24(1)(b), whereas in the present case the Tribunal was satisfied Mr Sheldon was able to work more than eight hours per week, and therefore did not satisfy s24(1)(b). It was by no means clear that the Tribunal was satisfied that Mr Sheldon was able to work for 20 or more hours per week as contemplated by s23(1)(b) and s23(2).

Regarding question 2, the Court noted the phrase “remunerative work” is not defined in the Act, but in Repatriation Commission v Butcher [2007] FCAFC 36 the Full Court said:

It is settled law that the subsection requires consideration of ‘remunerative work’ by having regard not to particular tasks and duties involved in specific jobs, but rather to the type of substantive work undertaken by the veteran considered at a higher level of generality: see Banovich v Repatriation Commission (1986) 69 ALR 395 at 402; Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225; and Repatriation Commission v Hendy [2002] FCAFC 424; (2002) 76 ALD 47 at 54.

The Court was satisfied that the Tribunal’s assessment of Mr Sheldon being able to perform remunerative work only as a backhoe operator was a finding open to the Tribunal on the facts of the case and within the scope of s23 and s24 of the Act. However, in the Court’s view the Tribunal erred in taking an unduly restrictive approach to “remunerative work” for the purposes of considering whether Mr Sheldon’s circumstances satisfied s23 or s24. The Tribunal fell into the type of error described by the Full Court in Butcher:

... the tribunal paid regard not to the substantive remunerative work that the veteran had undertaken in the past, but to particular tasks performed by the veteran during the course of his employment. The tribunal did not consider, in the general sense required by the subsection, the type of employment undertaken by the veteran but rather the particular duties in which he had been engaged.
(Emphasis added.)

The Court also noted the comments of the Full Court in Hendy:

The tribunal’s task was to assess what the veteran probably would have done, if he had none of his service disabilities during the assessment period. The requirement to consider “remunerative work that the veteran was undertaking” does not mean a particular job with a particular employer but the substantive remunerative work that the veteran had undertaken in the past.

In the present case, the Court considered the Tribunal appeared to equate (and confuse) the particular tasks which Mr Sheldon had performed while giving himself restricted duties in his own business, with the more onerous tasks Mr Sheldon was required to perform while employed as a backhoe operator by a third party. The Tribunal did not have regard to Mr Sheldon’s undisputed evidence that, because of changes over the years in the manner in which backhoe operating was performed, the role of backhoe operator usually involved more than merely driving a backhoe (which is the task he was able to perform), and in the present day the duties of a person employed in backhoe operating also usually included an element of manual labour (which with Mr Sheldon had difficulties). While the Tribunal identified Mr Sheldon as a “backhoe operator” the Tribunal failed to identify the nature of the substantive work which realistically and practically was required of persons with the skills, qualifications or experience of someone like Mr Sheldon. The Court noted Rares J in Smith observed:

[17] It is important that a beneficial provision like s 24(1)(c) be construed in a practical way. This is particularly so in today’s world, where forms of work and occupations are subject to constant change as technology eliminates or reduces some occupations and creates new ones. The expression “continuing to undertake remunerative work that the veteran was undertaking” in s 24(1)(c) must be construed in a realistic and practical way so as to avoid underlying technical constraints on its application to a veteran whose income earning capacity has been completely or significantly impaired.
(Emphasis added.)

The Tribunal approached the phrase “remunerative work” from the limited perspective of the particular (and restricted) duties performed by Mr Sheldon while he was self-employed, rather than the substantive remunerative work in which he had been engaged, and which (on the evidence) had been subject to change in the industry.

The Court’s Decision

The decision under review was set aside, and the case was remitted to the Tribunal to be heard and decided again.

Editorial Note

The Court in the present case identified the key points in the judgment of the Full Court:

All Practice Notes