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Repatriation Commission v Sharp

[2017] FCA 350

COURT Federal Court, NSW
JUDGE Perry J
DATE OF DECISION 4 April 2017
DECISION The appeal was dismissed
ISSUES Application for above general rate of pension – whether respondent prevented from engaging in remunerative work by defence-injuries alone – whether Tribunal misconstrued the “alone” test by limiting its consideration to diagnosed medical conditions – whether Tribunal failed to consider respondent’s substance abuse disorder as a causative factor for incapacity to undertake remunerative work – whether Tribunal’s findings were illogical or irrational – whether Tribunal failed to provide reasons

Facts

The respondent, Mr Brian Sharp, served in the Royal Australian Air Force from 1968 to 1988. Mr Sharp applied for the special rate of pension in 2014. The Repatriation Commission (the Commission) decided that Mr Sharp was not eligible for the special rate of pension, and the Veterans’ Review Board affirmed that decision. Mr Sharp applied to the Administrative Appeals Tribunal (the Tribunal). The Tribunal decided that Mr Sharp was entitled to an intermediate rate of pension from 1 May 2014 and the special rate of pension from 20 June 2014. The Commission appealed to the Federal Court.

Grounds of appeal

Each of the raised questions of law concern the manner in which the Tribunal determined the issue of whether the incapacity due to the defence-caused injuries “alone” prevented Mr Sharp from undertaking the remunerative work that he was undertaking and “alone” are responsible for him suffering a loss of earnings that he would not have suffered otherwise as required by section 24(1)(c) (the “alone test”). Specifically, the Tribunal is said to have erred in its consideration of whether Mr Sharp’s alcohol consumption constituted a factor preventing him from continuing to undertake his remunerative work for the purposes of determining whether the alone test was satisfied.

The Court's consideration

The Court referred to Smith v Repatriation Commission [2014] FCAFC 53, in which Buchanan J explained the different elements to be established under subsections 24(1)(b) and (c):

Section 24(1)(b) and (c), when read together, state a composite test containing a series of conditions. First, s 24(1)(b) requires that a veteran be rendered, by the war-related incapacity alone, incapable of working more than eight hours per week. Secondly, s 24(1)(c) requires that the veteran be prevented, by that incapacity alone (i.e. not for other reasons) from continuing earlier remunerative work. Thirdly, s 24(1)(c) requires that prevention for that reason from continuing that work be the cause of a loss of earnings. Fourthly, s 24(1)(c) requires that the loss of earnings would not be suffered but for the incapacity.

In Repatriation Commission v Richmond [2014] FCAFC 124 the Full Court explained at paragraphs [57]-[58] that the alone test in section 24(1)(c):

…is concerned with whether or not there is more than one cause of the preventative effect that the veteran claims has resulted from his or her war-caused incapacity.

... to qualify for the special rate, the preventative effect must arise from the veteran’s war-caused incapacity alone, and not from other non war-caused preventative factors as well. If other non war-caused factors contribute to the preventative effect, even if they are only of secondary importance and not of themselves sufficient to prevent the veteran from engaging in remunerative work, their presence will deny the veteran eligibility for the special rate.

The Court noted that, in short, section 24(1)(c) requires an applicant to demonstrate that the loss of earnings is the direct result of the war related incapacity and that that incapacity is the sole reason for the loss of earnings.

Question of Law 1 – alleged misconstruction of the alone test in limiting the consideration to diagnosed medical conditions

The Court considered that the Tribunal made findings which comprehensively considered and rejected the case put by the Commission. In summary, the Tribunal rejected the diagnosis by one expert psychiatrist, Dr Smith, that Mr Sharp suffered from a separate substance use disorder from his anxiety disorder, on the bases that:

The Tribunal accepted Mr Sharp’s case that he self medicated with alcohol effectively as a complication, or as a result, of his anxiety disorder, which was consistent with the evidence of his GP and other evidence. The Court considered that this explained the Tribunal’s finding that Mr Sharp’s incapacity from the anxiety disorder was the only factor preventing him from continuing to undertake work in June 2014. The Court indicated “…a symptom, complication or consequence of a disorder cannot constitute a separate factor from the disorder itself for the purposes of determining what factor or factors are operating to prevent an application from working”. By accepting Mr Sharp’s characterisation of his alcohol dependence, the Tribunal inferentially rejected any issue raised by the material that alcohol consumption, even if not a diagnosed condition, was a separate contributing factor. Therefore, no error in the AAT’s application of the “alone test” was established.

Question of Law 2 – alleged failure to consider whether Mr Sharp did not satisfy the alone test because his substance abuse disorder was a causative factor

It was not in dispute that the Commission seriously advanced submissions that Mr Sharp suffered from a separate, non-accepted condition of substance abuse disorder which prevented him from continuing to undertake his remunerative work. However, it follows from the reasons given above relating to the first question of law that the Tribunal did consider the Commission’s submissions on this point and rejected them.

Question of Law 2A – whether the finding at [67] of the Tribunal’s reasons is illogical or irrational

The Commission’s challenge to paragraph [67] related to the last sentence - “In my view this is unsupported by the applicant’s history of job difficulties and ultimately, job loss, in circumstances where there was no evidence that, at the time, he was abusing alcohol” (emphasis added). It was argued that statement was not open on the evidence before the Tribunal and was therefore irrational or illogical. This ground expressly proceeded on the basis that the reference “at the time” appears to be the time at which Mr Sharp stopped working.

Counsel for Mr Sharp submitted that read in the context of the decision as a whole, the Tribunal was referring to its earlier discussion of the applicant’s history of job difficulties and earlier job losses, and not to the time at which Mr Sharp stopped working on 20 June 2014. The Court agreed with this submission, and did not consider the finding at [67] of the Tribunal’s reasons to be illogical or irrational.

Question of Law 3 – alleged failure to provide reasons

The Court did not consider that the Tribunal had failed to comply with its obligation to provide reasons in accordance with section 43(2B) of the AAT Act.

The Court’s Decision

The appeal was dismissed.

Editorial Note

This case follows the accepted construction of the alone test in Richmond, endorsed by Repatriation Commission v Watkins [2015] FCAFC 10 and Summers v Repatriation Commission [2015] FCAFC 36.

All Practice Notes