Clearihan v Repatriation Commission

 [2020] FCA 1130 (7 August 2020)

Special rate of pension –  over 65 – incapacitated from war caused disease alone of undertaking remunerative work for periods aggregating more than 8 hours per week; and – prevented from continuing to undertake the remunerative work (last paid work) that the veteran was last undertaking  - because the veteran is so prevented from undertaking his or her last paid work, the veteran is suffering a loss of salary or wages

This case involved a veteran who was over 65 years, who applied for an increase in pension on the basis  of a number of war caused conditions relating to his service in Vietnam, that included non-melanotic neoplasm of the skin, malignant neoplasm of the prostate, generalised anxiety disorder, major depressive disorder, and erectile dysfunction. The Commission decided that the requirements of the special rate and intermediate rate were not met and granted pension at 80% of the general rate. This decision was then affirmed by the VRB and the AAT on appeal.

AAT Appeal

The AAT focused its analysis on two periods of assessment, 1) the time from the application to the VRB decision and 2) the time from the VRB decision to the end of the assessment period.

In relation to these two periods the AAT found:

  1. The applicant was capable of doing clerical work for 20 hours per week during assessment period 2 and therefore the requirements of 24(2A)(c)were not met;
  2. There were other factors that contributed to the applicant being prevented from undertaking his last paid work including that he had settled into retirement life and did not wish to relinquish this status – therefore the alone test requirements of s24(2A)(d) were not met;
  3. The applicant was unable to return to work due to a spinal condition that was not war caused and therefore the loss requirements of s24(2A)(e)were not met.

Appeal to Federal Court

The Applicant appealed to the Federal Court on the basis that the AAT had misdirected itself as to what constitutes a capacity to undertake remunerative work for the purposes of s 24(1)(b) as applied by s24(2A)(c) for the purpose of an over 65 claim for special rate; and whether the requirements in s 24(2A)(d) and (e) were not satisfied.

Federal Court - Moshinsky Judgment

Capacity to undertake remunerative work – the 8 hour test

The Court found that the AAT had not misdirected itself by applying an unduly narrow construction of the concept of capacity to undertake remunerative work for the purposes of s 24(1)(b). Specifically, the Court noted that the AAT did not merely focus on applicant’s physical capacity to perform certain tasks during (Period 2) as the AAT took into account psychological matters, noting the evidence of Dr Velakoulis that, “from the psychological perspective”, the applicant was able to return to work full-time provided he could take short periods of leave from time to time if required.

The Court also considered that the AAT’s approach was consistent with the terms of s 28 as discussed in Chambers at 10-11 per Davies J and at 19-20 per Moore and Sackville JJ. In particular, in relation to s 28(c), the AAT had regard to all the facts and matters bearing upon the nature and extent of the physical and mental impairment of the applicant, and the extent to which the physical and mental impairment had reduced the applicant’s capacity to undertake remunerative work of the kind that the applicant might reasonably undertake.

Tribunal erred in its application of s24(2A)(d)

The Court noted that the AAT had found that there were several factors that prevented the applicant from continuing to undertake clerical work including: the treatment for prostate cancer and the resultant anxiety and depression, however the AAT also noted that the applicant’s retirement was also a factor.

The Court found that by treating the applicant’s attitude to retirement as an independent preventative factor for the purposes of “the alone test” the AAT had erred in its application of s 24(2A)(d) by asking itself the wrong question and/or identifying the wrong issue when it found the fact that the applicant had “settled into retired life” precluded him from satisfying the “alone test” in s 24(2A)(d)

Requirements of s24(2B)(a)

The Court found that the AAT had  engaged in an illogical or irrational process of reasoning in finding that s 24(2B)(a) applied during Period 1 on the basis that the applicant had not obtained any new employment during that period because he did not wish to give up his retirement lifestyle, noting that the AAT had already found that the effects of the applicant’s war-caused conditions incapacitated him for work during Period 1. The Court also found that the AAT failed to consider whether the applicant’s retirement lifestyle was in fact a product of his war-caused conditions.

Next the Court was unable to reconcile the AAT’s findings that 1) the applicant informed his employer that he was unable to return to work due to his unaccepted spinal condition and 2) that when the applicant lost confidence in his ability to work he did not know whether the spinal condition was related to his prostate cancer. Given the AAT did not consider whether a connection existed between the Applicant’s accepted condition of prostate cancer and the spinal condition the Court found that the AAT erred in its application of s24(2B)(a) when it found that the applicant’s confidence in his ability to return to work was destroyed by a reason other than his incapacity from that war-caused injury or disease.

Ultimately the Court found that the errors in the AAT’s reasoning did not infect the reasons relating to assessment period 2 and in that respect, the AAT’s decision still stands.

Further reading

The Full Federal Court decision in Richmond noted the correct application of s24(1)(c) when considering the correct test the Court noted:

As we have said, s 24(1)(c) has two limbs. The first limb, which is capable of being informed by s 24(2)(b), requires a causal connection between the veteran’s war-caused incapacity, alone, and the veteran’s inability to undertake the remunerative work he or she previously engaged in.

The second limb, which is amplified by s 24(2)(a), requires a causal connection between that inability to work and the veteran’s suffering of financial loss. The enquiry under this limb relates to whether the veteran’s financial loss is a result of his or her war-caused incapacity.