FCA 904
|COURT||Federal Court, NSW|
|DATE OF DECISION||7 August 2017|
|DECISION||The appeal was allowed|
|ISSUES||Application for above general rate of pension – where Tribunal found applicant’s “last paid work” comprised two remunerative activities for the purposes of ss 24(2A)(d) and (g) – whether only one remunerative activity can comprise “last paid work” for the purposes of s 24(2A)(d) – whether applicant undertaking “remunerative activity” when gap in paid work – whether breach of procedural fairness – whether sufficient for one of two remunerative activities comprising last paid work to satisfy 24(2A)(g)|
The applicant, Commander Peter Saxton, served in the Royal Australian Air Navy as a Reservist between 1994 and 2013. He had periods of continuous full-time service which included deployments to East Timor.
In 2013 the applicant sought an increase in his disability pension beyond 90% of the general rate. At that time, he was 67 years of age. His application was refused, and the Veterans’ Review Board (VRB) affirmed that decision. The Administrative Appeals Tribunal (the Tribunal) affirmed the VRB’s decision that the applicant did not qualify for the special or intermediate rate of pension, on the ground that he had not met the criteria in s 24(2A)(g) or s23(3A)(g) respectively. Those sections relevantly required the applicant to demonstrate that, when he stopped undertaking his “last paid work”, he had been working for his employer or on his own account for a continuous period of at least 10 years, before he turned 65. The applicant appealed to the Federal Court.
Grounds of appeal
The applicant challenged the Tribunal’s finding that his last paid work for the purposes of s 24(2A)(d) was his civilian work, as well as his Navy work, on two grounds:
- the Tribunal misconstrued s 24(2A)(d) of the VEA by failing to find that the applicant’s Navy work was the “last paid work” for the purposes of that section, despite the undisputed evidence;
- the finding was made in breach of procedural fairness in circumstances where the finding was not reasonably obvious on the evidence and the Tribunal gave no notice to the parties that it would depart from what were, in essence, agreed facts to the contrary.
The other ground of appeal considered by the Tribunal was:
- Did the Tribunal misconstrue s 24(2A)(g) of the VEA?
The Court’s consideration
Did the Tribunal misconstrue “last paid work” in s 24(2)(d) of the VEA?
The Tribunal was of the view that nothing in the terms or context of s 24(2A)(d) or s 23(3A)(d) requires that the “last paid work” be restricted to a single “remunerative activity”, to use the language of the definition of remunerative work in s 5Q(1). Section 24(2A)(d) is concerned with the reason which prevented the veteran from continuing to undertake his or her last paid work. In Grant v Repatriation Commission  FCA 1629 the Full Court indicated at :
Determination of the “remunerative work” referred to in s 24(2A)(d) requires the characterisation of the specific remunerative activity or activities that the veteran was last undertaking before making the claim or application rather than of the capacity in which that work was undertaken. The particular capacity in which the work was undertaken is dealt with as a separate criterion in s 24(2A)(g).
The Tribunal also considered that it is plain from the width of the definition of “remunerative work” as meaning “remunerative activity”, that remunerative activity and, therefore, last paid work, are not limited to full-time employment but rather can embrace activities undertaken pursuant to part-time or casual arrangements. This construction leaves open the possibility that a person may be regarded as undertaking a remunerative activity for the purposes of the provision, even during periods where there is a gap in her or his paid work. For example, the fact that work may be unavailable from time to time for a veteran in a part-time consultancy role will not necessarily mean that the veteran cannot satisfy the requirement in s 24(2A)(g) of undertaking his or her last paid work for a continuous period of 10 years before turning 65: Thompson v Repatriation Commission  FCA 204 at . The Tribunal considered that the construction adopted by the Tribunal on this issue must be preferred.
The Tribunal did not accept the applicant’s contention that the “undisputed evidence” was that he ceased civilian work on 30 April 2013 before he made his claim. Also, the Tribunal did not accept that the undisputed evidence before the Tribunal established that the applicant’s last paid work was his Navy service. The Court considered the Tribunal did not misconstrue the task required by s 24(2A)(d) in determining what was the applicant’s “last paid work” or its equivalent in s 23. Further, it was open to the Tribunal on the evidence to characterise the applicant’s work with Property Development Systems Australia (PDSA) as continuing at least to June 2013, notwithstanding that the allocation of blocks of work to him by PDSA was intermittent and that it was not in dispute that the applicant was not undertaking a block of work for PDSA when he made his claim in May 2013.
Did the Tribunal breach procedural fairness in finding that the applicant’s last paid work comprised two remunerative activities?
The issue was whether, as contended by the applicant, the Tribunal’s conclusion that the applicant’s last paid work for the purposes of s 24(2A)(d) was both his work with the Navy and his part-time civilian work was not obviously open. However, the Tribunal considered no breach of procedural fairness had been made out.
Did the Tribunal misconstrue s 24(2A)(g) of the VEA?
The question was whether the Tribunal’s assumption that the applicant had to satisfy the requirement under s 24(2A)(g) for both his Navy and civilian work was correct as a matter of statutory construction.
Firstly, it may be accepted on a strictly literal reading the reference to “last paid work” in s 24(2A)(g) should bear the same meaning as the phrase in s 24(2A)(d) and therefore that, if a veteran had two separate remunerative activities then both must meet the criteria in s 24(2A)(g). However, the Court indicated that while the task of statutory construction must begin with the text, that is not necessarily the end of the task.
Secondly, the Court noted that s 24(2A)(g) has a distinct and different purpose from s 24(2A)(d), citing Branson J in Carter v Repatriation Commission  FCA 992 at :
…The paragraphs [i.e. ss 24((1)(b), (2A)(d) and (2A)(g)] are, in my view, intended to deal with distinct issues. Paragraph 24(1)(b) is concerned with degree of incapacity, s 24(2A)(d) with the reason which prevented the veteran from continuing to undertake his or her last paid work and s 24(2A)(g) with the demonstration of a long-term intention to undertake a particular type of work beyond the age of 65 years.
This purpose is consistent with the view of the Full Court in Thomson at :
…If s 24(2A)(g) were concerned only with the continuity of last paid work, then sub-clauses (i) and (ii) would be otiose. All that would have been necessary was a requirement that the undertaking of the last paid work be continuous during the 10 years prior to the relevant date. As explained above, sub-clauses (i) and (ii) make it quite clear that s 24(2A)(g) is concerned with the capacity in which the last paid work was undertaken. The purpose of those subclauses in s24(2A)(g) appears to be to prevent claims by veterans over 65 years of age that are based on new or recent employment or self-employment (that is, in the present context, less than 10 years in duration).
Thirdly, as both parties accepted, nothing in the VEA or any legislative instrument suggests that the number of the remunerative activities comprising “last paid work” under s 24(2A)(d) or amount earned through those remunerative activities affects the calculation of the special (or intermediate) rate of pension.
The Court considered the Tribunal’s construction would lead to arbitrary and unfair consequences. For example, a veteran who had two “last paid work[s]” for the purposes of s 24(2A)(d) would be precluded from receiving the special rate if only one of the two remunerative activities satisfied s 24(2A)(g), even though the veteran would have been entitled to the higher rate if they had been undertaking only the latter at the relevant time.
The Court indicated that on the one hand, the purpose of s 24(2A)(d) is promoted by construing “last paid work” as encompassing more than one remunerative activity where the veteran was engaging at the relevant time in more than one such activity. On the other hand, the Court considered the purpose of s 24(2A)(g) is best promoted by construing “last paid work” as referring to any one of the remunerative activities found to constitute “last paid work” for the purposes of s 24(2A)(d). The Court found that the Tribunal wrongly construed s 24(2A)(g) as requiring that both the applicant’s Navy work and civilian work must separately meet the criterion in s 24(2A)(g).
The Court’s Decision
The appeal was allowed.
Please note, there have been legislative changes to sections 23(3A)(g) and 24(2A)(g) of the VEA, which apply to claims or AFIs made on or after 1 July 2017.
The Veterans’ Affairs Legislation Amendment (Budget Measures) Act 2017 removes the distinction between a veteran who was working as an employee, or on his or her own account. It also removes the requirement that the veteran worked for the same employer, or in the same field of work.