Agius and Repatriation Commission (Veterans' entitlements)
[2017] AATA 41
•19 January 2017
Agius and Repatriation Commission (Veterans' entitlements) [2017] AATA 41 (19 January 2017)
Division
Veterans' Appeals Division
File Number
2015/3004
Re
Norman Agius
APPLICANT
And
Repatriation Commission
RESPONDENT
DECISION
Tribunal Miss E A Shanahan, Member
Date 19 January 2017 Place Melbourne The Tribunal affirms the decision under review.
[sgd]........................................................................
Miss E A Shanahan, Member
VETERANS’ AFFAIRS – disability pension – claim for special rate – disabling condition PTSD – ceased work of financial advising at age 54 – farming pursuits – considerable income from investments and company directorships – whether prevented from continuing to undertake remunerative work – non war-caused preventative factors of sleep apnoea and nocturia - alone test not satisfied – decision affirmed
Legislation
Administrative Appeals Tribunal Act 1975 ss 37, 42CVeterans’ Entitlement Act 1986 ss 19, 24, 119
Cases
Chambers v Repatriation Commission (1995) 55 FCR 9
Fahey v Repatriation Commission (1986) 10 ALD 338
Counsel v Repatriation Commission (2002) 122 FCR 476
Flentjar v Repatriation Commission (1997) 48 ALD 1
Leane v Repatriation Commission (2004) 81 ALD 625
Hill v Repatriation Commission [2000] FCA 929
Summers v Repatriation Commission (2015) 230 FCR 179
Repatriation Commission v Richmond (2014) 226 FCR 21
Repatriation Commission v Watkins (2015) 228 FCR 573Re Reddin and Repatriation Commission [2015] AATA 273
REASONS FOR DECISION
Miss E A Shanahan, Member
19 January 2017
Mr Agius lodged a claim for an increase in his Department of Veterans’ Affairs (DVA) disability pension on 25 August 2011. He had claimed multiple medical conditions contributing to his disability previously estimated at 30 per cent. The claim of 25 August 2011 was for the condition of Post-Traumatic Stress Disorder (PTSD), gastro‑oesophageal reflux disease (GORD), sensorineural hearing loss, and later in an application for an increase in pension receipted 23 March 2012, Diabetes Mellitus. These claims had been denied by a delegate of the Repatriation Commission and subsequently by the Veterans’ Review Board (VRB).
On appeal to the Tribunal a Consent Agreement was reached on 18 August 2014, accepting all of the conditions with the date of effect being 25 May 2011 and that of the diabetes 23 December 2011. The claim for payment at Special Rate was denied.
Mr Agius appealed this aspect of the decision to the Tribunal, the VRB having affirmed the decision that Mr Agius’ Veterans’ Disability Pension be continued at the 100 per cent of the general rate as he did not satisfy s 24(1)(c) of the Act on the basis that he had not met the requirements of the alone test, having been out of the workforce for approximately 15 years and at the time of the hearing was 66 years of age.
Mr Agius lodged his application with the Tribunal for review of the VRB decision on 19 June 2015. The application was initially heard by a differently constituted Tribunal Member commencing on 7 April 2016. At this hearing set down for several days, Mr Agius gave evidence. At the recommencement of the hearing on 8 April 2016, counsel for Mr Agius made an application for the presiding Member to recuse herself by reason of apprehended bias. After some debate the Member recused herself. Transcript relating to this period of evidence has been provided.
At the hearing before the reconstituted Tribunal, Mr Agius was represented by Dr Adrian Hoel of counsel instructed by Williams Winter, solicitors, and the respondent by Mr Ken Rudge, solicitor of the DVA Review Branch. The respondent had lodged the s 37 documents (the T-documents) as required by the Administrative Appeals Tribunal Act 1975 (AAT Act), and both parties tendered further documentation and reports, a list of which is appended to this decision.
Mr Agius requested that he not be required to give evidence again and as the respondent did not object the Tribunal agreed to rely on the content of the Transcript of 7 and 8 April 2016. Mrs Carmen Agius, wife of the applicant, and Mr Oliver Agius, son of the applicant, gave evidence before the Tribunal.
BACKGROUND TO THE APPLICATION
Mr Agius migrated to Australia from Malta in March 1965 at the age of 17. He enlisted in the Australian Army in June 1965 for a period of three years. He served in Vietnam between June 1967 and July 1968 being placed in a Recovery Unit involved in the recovery of damaged vehicles. He was based at Nui Dat and Vung Tau (Transcript page 19) and frequently had to travel to recover such vehicles.
Following his discharge from the Australian Army Mr Agius worked as a draftsman from 1968 until 1976 when he became a financial advisor and agent for the Australian Mutual Providence Society (AMP), his financial advisory company being established with the assistance of an interest free $750,000.00 loan from AMP. Mr Agius was very successful in his role as a financial advisor and in the early years worked extremely long hours with little assistance other than for a part time secretary. It was not uncommon for him to work to 1.00am or 2.00am.
Prior to establishing his financial advisory company, he had contemplated returning to Malta, his country of birth. When making enquiries to do so he met his wife who worked at the relevant consulate office. She too was of Maltese origin. They married in 1972 and have two children, Oliver and Daniel, both of whom have acquired tertiary qualifications in the area of finance. The sons took over their father’s business, known as Grand Masters Financial Services (Grand Masters), in late 2001 and continued in this role until the business was sold in July 2015. The business had declined in terms of client numbers and earnings. The financial advisory service was sold by AMP who recovered their loan of $750,000.00 leaving a residual payment, presumably representing good will, of the order of $400,000.00.
In his evidence earlier in the year Mr Agius had advised that from the time he established his financial advisory service in 1976 he rapidly increased his earnings to a level of between $440,000.00 and $600,000.00 nett or more per annum. He had invested widely and established multiple companies involved in different investment pursuits including building small to medium shopping centres. In the course of his business Mr Agius received multiple prizes and awards for his annual performance as a financial advisor, the last such award being in 1998.
Mr Agius gave evidence that he first noted difficulties with his concentration and general ability to undertake his work in financial advising in the late 1990s when there was a change in the standard requirements and rules relating to financial advisors. He apparently had difficulty in understanding the rules and when submitted to routine examinations performed by AMP in the late 1990’s he noted he could not complete the examinations on time nor could he achieve the pass rate. When his son Oliver joined the company Mr Agius progressively passed the advisory services to his son while he concentrated on running the business.
Oliver had worked part-time in his father’s business while he studied. In 2002 he completed his Bachelor Degree in Business, Banking and Finance and subsequently obtained further qualifications in financial planning.
Mr Agius, while handing over much of the activity to Oliver and his younger brother Daniel who also worked part time in the business while he studied, believed that his sons were making mistakes, were changing his methodology and he feared that they would, as he put it, wreck the business. He had reacted in anger, screaming at his sons and did so in the presence of clients. As this situation deteriorated it was decided that he would hand over the business of financial advising to his sons and he would retire to the farm he had purchased at Boneo on the Mornington Peninsula.
Mr Agius said that following the shift to Boneo he believed he had improved considerably as his memory and concentration were better. In 2009 he decided to return to work. This return was short lived as he again became very angry and short tempered after a couple of months and believed his sons were making mistakes in doing things differently to his established practice and were over-concentrating on computerisation of the practice. He also criticised their work ethics in that they knocked off at 5.00pm. In his evidence before the VRB Mr Agius said he had returned to work in 2009 because he was bored and because many of the clients had dealt with him for over 30 years and they were not prepared to deal with his sons.
Following this experience Mrs Agius arranged for them to attend a five day live-in Vietnam Veterans’ Counselling Service (VVCS) program at Flowerdale and as a result she realised he required professional help. He commenced seeing a psychologist, eventually a psychiatrist and in 2011 was diagnosed with post- traumatic stress disorder (PTSD).
Mr Agius now potters around his farm having reduced the cattle numbers from 90 to 45, occasionally checks the water troughs and occasionally feeds the cows. He was not able to give specific answers to questions regarding the running of the business and his role in it. He denied he was a director of the many companies he had established well before he retired.
Mr Agius was critical of the various psychiatrists who have treated him and currently is not attending either a psychiatrist or psychologist but is endeavouring to obtain such services closer to home as his road rage makes it imperative that he not drive long distances. Currently he occasionally takes a Valium tablet and has been on long term moclobemide, an anti-depressant. While that has assisted he still remains tearful, short tempered and very angry. He explained his non-involvement in the company affairs as being due to loss of concentration such that he can’t even handle his own finances, let alone those of a business.
In his evidence before the Tribunal given on 7 April 2016 Mr Agius denied he continued to suffer from sleep apnoea and thus treatment was not required. He confirmed frequency of micturition waking him seven to eight times a night to pass urine (nocturia).
In his evidence given earlier in the year Mr Agius expressed his distress, frustration and anger at having his claim denied as he believed that many Vietnam Veterans were receiving special rate when they did not deserve to and while he did not actually need the extra money he was entitled to such payment and was pursuing his claim as a matter of principle.
The Tribunal was provided with that part of the Transcript of the VRB hearing of 26 May 2015 recording Mr Agius’s oral evidence (Exhibit R4). In relation to his continuing activity as a Director of Grand Masters, Mr Agius stated he had to continue in that role because the agency with AMP was in my name. But they’re closing that down too anyway, because they can’t handle it. The “they” referred to his sons. Mr Agius described his return to work at Grand Masters in 2009/2010 as I didn’t talk about financial plans. It was too dangerous for me to be advising them. Besides, I wasn’t qualified anymore because I wasn’t doing the exams. So I used to be talking about some good times in the past – it’s more PR was - you know - kind of thing. He also said that he had ceased work when he sons and employees insisted he leave or they would.
EVIDENCE BEFORE THE TRIBUNAL
Mrs Carmen Agius
Mrs Agius provided a statement dated 9 June 2015 (Exhibit A2). In her evidence before the Tribunal she confirmed that her husband had worked long hours from the time of their marriage until the late 1990s, frequently not returning home until between 11.00pm and 2.00am on most nights. He had little time for his family or friends. She had always regarded him as being anxious and easily agitated. Mr Agius had never discussed his Vietnam service experiences with her.
Mrs Agius noted a deterioration in his level of anxiety and increased agitation in the late 1990s when he also became very short tempered and forgetful. Mr Agius had been reluctant to seek medical help. When they were invited to a VVCS five day gathering she arranged their attendance and in the course of discussions realised that he might be suffering from PTSD. Following attendance at this seminar/conference in November 2010 she requested her husband be referred to a psychiatrist. Mr Agius was seen by Dr Heffernan in January 2011 and according to Mrs Agius he made a diagnosis of PTSD.
Mr Agius is said to have ceased work in 2001 as he was not coping. His sons were working in the business and both were qualified, in terms of university degrees in finance and/or planning. Mr and Mrs Agius had bought what she described as a hobby farm consisting of 150 acres in Boneo, overlooking Westernport Bay and Bass Strait. She stated that her boys, Oliver and Daniel, had insisted that their father leave the financial advisory company although he remained the principal.
Mrs Agius described her husband’s activities as riding around the farm on a motorbike, checking water troughs, feeding the now 40 head of cattle (previously 90 head) and as necessary, driving a tractor and mowing the grass. She watches him from the verandah of the house using binoculars. If she cannot see him or his return is delayed, she will ring him on his mobile phone. If he does not answer she then drives around the farm until she finds him.
Mrs Agius agreed that her husband got up six to eight times in the night in order to pass urine and that he suffered from sleep apnoea. When she notices an apnoeic period she slaps him to wake him up. She said that he was tired during the day.
Mrs Agius herself does some work at Grand Masters. The work was described as filing, paying bills and occasionally acting as a receptionist. She assumed her 2012 director’s payment of $40,000.00 was attracted by these activities. In that same tax year she had claimed $9,600.00 in travel expenses, although she could not recall ever having kept a logbook of travel related expenses.
Mrs Agius described her husband’s nightmares as being a few and she assumed that they were nightmares because of his predilection to kick her in bed. (The Tribunal notes that Mr Agius, on sleep apnoea testing, has a high rate of periodic leg movements, the rate being recorded as 32.8 per hour). Mrs Agius did not have a great deal of knowledge of the finances of the multiple companies or the family trust of which she is a director.
OLIVER AGIUS
Oliver Agius provided a statement dated 17 November 2015 (Exhibit A3). In his evidence before the Tribunal, he said that he only saw his father at weekends during his childhood. He started working in the family business of Grand Masters in 2001, while he was still studying part time at Victoria University. He commenced working full time after graduating in late 2001 and arguments commenced between him and his father shortly thereafter. He noted his father’s poor concentration. In consultation with his brother Daniel, the two sons delivered an ultimatum that his father leave or they would do so.
When asked if his parent’s had retired to the farm, Oliver said no, he and his brother had exiled them to the farm. His father’s name continued to be advised as the principal of Grand Masters as the loan of $750,000.00 was made to Norman Agius and for him to surrender his role as principal would have resulted in the immediate requirement to return that sum to AMP.
Oliver Agius believed at first that the conflict between him, his brother and his father was a generational disagreement in that he and his brother wished to computerise the entire business, a move that his father resisted. He later concluded that his father’s changed attitude was due to PTSD.
Oliver and Daniel had been agreeable to their father resuming work for one day per week for a period of 12 months, in 2009 and 2010, as they believed their father’s presence in the business would rejuvenate the client basis which had been diminishing over the years since they took control.
Oliver believed that the arguments, short-temperedness, shouting and swearing that his father had exhibited in the office, although not directed at clients, had been very divisive in terms of family relationships. Oliver described his parents’ farm as a hobby farm but agreed that his father and mother received a steady income derived from shares, bank interest and distributions from the family trust but as he had said in his statement, these came from passive investments and not from personal exertion, with the exception of the period in 2009-2010.
Oliver gave evidence that the financial advisory business was sold in July 2015. AMP was repaid the $750,000.00 interest free loan made to Norman Agius leaving a net profit from good will of $400,000.00.
Oliver Agius confirmed that his father, Norman, remained a director of the numerous companies and would sign off on the annual reports. Oliver claimed that he and his brother had undertaken all the property development and investment and that he had been unaware that his father was still identified as principal of the advisory service on the web-site maintained by AMP.
DOCUMENTARY EVIDENCE BEFORE THE TRIBUNAL
Daniel Agius provided a statement dated 17 November 2015. He said that he had studied at Victoria University until he graduated in Business Financial Risks Management in 2002. While undertaking this degree course he had worked part time in his father’s Grand Masters business, becoming full time after graduation. He agreed with the content of his brother, Oliver’s statement.
Medical Reports
The Tribunal has been provided with the medical records of Mr Agius’s treating general practice group, The Cove Family Medical Centre. These records cover the period from 2002 to 2015 and contain very little reference to Mr Agius’s psychiatric disorder, other than an entry of 7 October 2011 stating that Mr Agius has anger issues and was considering an application for a DVA pension. The antidepressant Lexapro was then prescribed and some three months later a referral was made to a psychiatrist. In the ensuing years the general practitioners have repeated prescriptions for Mr Agius’s antidepressant medication but do not record any opinions regarding his progress.
These notes contain relevant reports from treating psychiatrists and referrals to other specialists for co-existing physical diseases.
Mr Agius was first referred to the Mornington Sleep Service for a diagnostic sleep study in March 2011. The report records that Mr Agius had daytime sleepiness, diabetes and depression but no snoring. On testing he was found to have severe supine sleep apnoea, with 10.6 episodes of apnoea or hypopnea per hour and frequent periodic leg movements, un-associated with the episodes of arousal.
The sleep study was repeated at the Frankston Hospital sleep laboratory, some 12 months later and again, recorded severe supine obstructive sleep apnoea, with an improvement in the apnoea/hypopnoea index to 4.8 episodes per hour. Mr Agius’s oxygen saturation (normal being 95 to 96 per cent) fell to 90 per cent during sleep and to 88 per cent in non‑REM sleep. It is recorded in 2012 that Mr Agius does snore. On both occasions his Epworth sleepiness score was 14, the upper limit of normal being 10. Mr Agius has not had any treatment in the form of continuous positive airway pressure (CPAP) therapy despite this having been recommended by the sleep physician. He does not accept that he has sleep apnoea.
Mr Agius had reported frequency of micturition at night and this was confirmed by Mrs Agius in her evidence. He gets up seven to eight times per night to pass urine. He has had episodes of haematuria (blood in urine) and has been referred to an urologist for investigation. The urologist’s opinion has not been provided. Mr Agius was said to have had renal colic in 2004.
Psychiatric Reports
Mr Agius was first referred to Dr Peter Heffernan, a psychiatrist in Mount Eliza and was seen from early 2011 but no psychiatric diagnosis was made. Dr Heffernan recorded at the initial consultation of 21 January 2011 that Mr Agius attributed his symptoms to a history of bullying and brutality at the hands of senior colleagues during his basic military training and of humiliation and distress in his experience of protesting civilians on his return from military service overseas. Dr Heffernan recommended that Mr Agius undergo CPAP treatment for his sleep apnoea before he could make a confident diagnosis. After attendances for approximately 10 months, Dr Heffernan found it necessary to withdraw his involvement in Mr Agius’s care because of the latter’s threatening and intimidating manner relating to Dr Heffernan’s refusal to provide a DVA report in support of his application.
Mr Agius was seen by Dr L Fernando on 31 January 2012. Dr Fernando made a diagnosis of generalised anxiety disorder (GAD) and also commented on the severity of Mr Agius’s sleep apnoea. Dr Fernando was of the opinion that the date of onset of Mr Agius’s GAD was in 2009 and treatment with psychotherapy and anxiety medication was indicated. While Dr Fernando was of the opinion that Mr Agius would not be able to be gainfully employed he attributed this inability to undertake paid work as being due to age 30 per cent, anxiety 40 per cent and the physical condition 30 per cent.
From 23 January 2013 Mr Agius was treated by Dr Cooper who made a diagnosis of PTSD. Dr Cooper had been a speaker at the VVCS lifestyle meeting attended by Mr Agius in November 2010. At the initial interview Mr Agius stated that he believed his psychiatric state had worsened as a result of him ceasing work. Dr Cooper did not address the question of remunerative work in any detail but did record that Mr Agius had handed his business over to his sons as he could not handle customers, had moved to the farm where he tried to grow beef but was unable to generate an income and in his opinion had not been able to perform remunerative work for about the last five years.
When Dr Cooper retired, he referred Mr Agius to Dr Collier for ongoing treatment. In the letter of referral dated 29 October 2013 Dr Cooper identified Mr Agius’s aggravating factor in his PTSD as his forthcoming appeal to the Tribunal.
Dr Collier diagnosed PTSD attributable to Mr Agius’s experiences while serving in Vietnam. Dr Collier first saw Mr Agius on 18 March 2014 and agreed that an aggravating factor in Mr Agius’s psychiatric disorder was his unresolved DVA compensation claim. Dr Collier continued to treat Mr Agius with moclobemide 450mg twice daily. Some benefit resulted from this medication. It would appear that Mr Agius only saw Dr Collier on a few occasions. Dr Collier was of the opinion that Mr Agius could not perform any work at all.
Mr Agius was seen by Dr Kaplan and Dr Farnbach, psychiatrists, in August 2013 and January 2014 respectively for medico-legal opinions.
Dr Kaplan confirmed the diagnosis of PTSD and that Mr Agius could not undertake work as a financial advisor or any other work that involved administrative duties. He did note that Mr Agius’s current work on his farm which involved tending to cattle, labouring work and mechanical repairs was therapeutic.
Dr Farnbach also confirmed the diagnosis of PTSD, considered Mr Agius’s symptoms to be in the moderate range. He considered Mr Agius to currently be unfit for gainful employment. Dr Farnbach regarded Mr Agius’s sleep disturbance as being significant. Dr Farnbach was under the impression that Mr Agius had divested himself of his financial services business.
The most recent report is that of Dr Scott Chambers who saw Mr Agius at the request of DVA on 25 September 2014 (T16). Dr Chambers confirmed the diagnosis of PTSD and that Mr Agius’s type of work had been that of a financial advisor from 1976 until the year 2010. In his opinion Mr Agius had ceased work predominantly because of his PTSD but also that his decision had been affected by tension between himself and his sons who had joined the family business. From a psychiatric perspective Mr Agius was said to have a work capacity of 10 to 15 hours per week over a five day week and could work as a financial planner.
Income Tax Returns and Returns for the various companies established by Mr Agius
The Tribunal has been provided with 532 pages of tax returns and financial statements relating to Mr Agius’s financial affairs resulting from him being a director of Hudson Circuit Pty Ltd, Milleye Pty Ltd, N and C Finance and Investments Pty Ltd and a 50 per cent unit holder in Penthouse 1902 Unit Trust. The tax returns seem to date from 2006, in relation to some of the companies and the trust, until 2013. All of the incomes referred to have been declared by the accountant, David Carlson, to have been derived from investment and not from personal exertion.
All of the documentation has been signed by Mr Agius and also on many occasions by his wife Carmen. These are summarised in Exhibit R2. Over the years, from 2006 to the latest returns of 2013, income has been derived from primary production but the farm has always returned a loss, the depreciation claims greatly outweighing the income. The actual stock on the property has varied from a level of 40 to 45 most recently up to a level of 105 head of cattle in 2009. Mr Agius’s personal gross income was $163,000.00 in 2010, $143,000.00 in 2012 and increased to $179,000.00 in 2013. It was estimated that his taxable income in 2014 would be in the order of $123,521.00 with a similar or slightly higher amount in 2015.
The income of Mrs Agius for 2014 was estimated as $121,938.00 and for 2015 as $123,647.00. All profits were expected to remain much the same for the period 2013 to 2015. The fluctuations in income seem to follow more closely the disbursements made to various beneficiaries from year to year. Mr Agius has not been paid a salary as such, for many years.
Tax returns for the period prior to 2001, when Mr Agius first ceased work have not been provided. It is not clear to the Tribunal when the Agius Family Trust was first established but the claims made for depreciation of various items held by the Trust and similar depreciation claims relating to an investment property in Queensland and a Harbour Plaza shop commenced in 1998 when Mr Agius was still working as a financial advisor.
RELEVANT LEGISLATION
As Mr Agius was 64 at the time of his application for special rate of payment of the disability pension, the relevant legislation is contained in s 24 of the Veterans’ Entitlement Act 1986 (the Act) which states:
24 Special rate of pension
(1) This section applies to a veteran if:
(aa)the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(aab)the veteran had not yet turned 65 when the claim or application was made; and
(a)either:
(i) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
(ii) the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and
(b)the veteran is totally and permanently incapacitated, that is to say, the veteran’s incapacity from war-caused injury or war-caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and
(c)the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and
(d)section 25 does not apply to the veteran.
(2)For the purpose of paragraph (1)(c):
(a)a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if:
(i) the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or
(ii) the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; and
(b)where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.
Eligibility for a pension payable at the intermediate rate is provided for in s 23 which has the same eligibility criteria as s 24 except that the veteran has a capacity for more than eight but no more than 20 hours work per week.
SUBMISSIONS
Dr Hoel submitted that the veteran clearly met the requirements of s 24 of the Act in that he had made an appropriate claim under s 14 of the Act and at the time this was lodged he was 64 years of age. His degree of incapacity was determined to be 100 per cent in accordance with the decision of the Tribunal dated 18 August 2014, this having been a decision by Consent Agreement.
While there was some disagreement in terms of the medical reports as to the degree of incapacity from which Mr Agius suffered as a result of his war-caused PTSD, Dr Hoel described it as being tolerably clear that s 24(1)(b) was satisfied as two of the seven psychiatrists stated that he could not work for more than eight hours per week. There was only one report that suggested that he could work 15 to 25 hours, this being the most recent report of Dr Chambers. Many of the reporting psychiatrists did not address the question of Mr Agius’s work capacity in terms of hours.
Dr Hoel also contended that there was no evidence of any expert assessing Mr Agius’s work capacity in terms of both his physical or medical conditions in comparison to the psychiatric condition. Other factors raised by the respondent such as Mr Agius’s inability to keep up with the requirements of continuous professional development and examinations for financial advisors introduced in the late 1990’s, was, on the evidence of Mr Agius’s sons, in retrospect due to his PTSD and not to an underlying lack of knowledge or inability to pass the examinations.
Based on the lack of evidence as to Mr Agius’s earnings prior to 2001 when he ceased working for the first time, Dr Hoel agreed that it was difficult to quantitate Mr Agius’s loss of earnings as required by s 24(1)(c). However, he submitted that it had been open to the respondent to obtain such data from the Australian Taxation Office (ATO). It was conceded that Mr Agius had a significant investment income relating to shares, interest and investment property rental income.
It was contended that this was not derived from earnings on his own account. The Full Court of the Federal Court of Australia had determined in several matters that such earnings were to derive from personal exertion. It was argued that the contentions outlined at [38] of the Respondent’s Statement of Issues, Facts and Contentions were entirely speculative and not attracted by Mr Agius’s situation. These points had been raised as possible contributing factors to Mr Agius’s cessation of work, as required by s 24(1)(c), as being:
·his age;
·the long hours of work involved in the business;
·the regulatory requirements of the finance profession;
·being able to keep the business operating with his sons;
·the opportunity to devote appropriate time to performance of his duties as a company director, public officer and trustee;
·the opportunity to use the farm as an alternative form of employment;
·the likelihood of increasing the capital value of the farm; and
·the taxation and financial advantages in operating the farm.
Mr Rudge for the Respondent
Mr Rudge identified Mr Agius’s activities as two-fold, they being financial planning and advisory services and farming. While Mr Agius and all members of his family had stated that the farm was in fact a hobby farm Mr Agius was claiming considerable deductions in his income tax returns for depreciation and outgoings. It was submitted that such deductions were not available to an enterprise classified as a hobby as opposed to an income raising enterprise. It was agreed by Mr Rudge that on balance the evidence favoured Mr Agius being unable to continue as a financial advisor because of his PTSD. The same argument, it was contended, did not apply to farming and in fact he had been encouraged to farm by some of his psychiatrists as this was considered to be therapeutic.
In this respect Mr Rudge relied on Chambers v Repatriation Commission (1995) 55 FCR 9 (Chambers), wherein the Full Court of the Federal Court had interpreted an individual’s skills, qualifications and experience broadly, provided both dictionary definitions and expanded the terminology to include innate aptitude for tasks and abilities acquired or developed independently of employment or training. Based on the decision in Chambers, Mr Rudge submitted that Mr Agius retained the abilities of a company director, a trustee and a financial planner, if not advisor.
Mr Rudge submitted that since the Full Court of the Federal Court decision in Repatriation Commission v Richmond (2014) 226 FCR 21 (Richmond) the interpretation of s 24(1)(c) in terms of the alone test was to be more strictly applied and had been applied in later decisions (for example, Summers v Repatriation Commission (2015) 230 FCR 179 (Summers)). In Richmond it was held at [37] that:
... if there is a non war-caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing, the alone prevented test would not be satisfied.
Mr Rudge identified the non-war-caused factors which contributed to preventing Mr Agius from undertaking the remunerative work of a financial advisor, were his diagnoses of sleep apnoea, considered an important factor by most of the reporting psychiatrists and the general practitioner and his nocturia. Mrs Agius in her evidence had confirmed the impact of these two conditions in disturbing Mr Agius’s sleep at least seven to eight times per night.
It was contended that further contributing factors, albeit to a lesser degree, were the changes in the regulation and law regarding continuing professional development of financial advisors, the generational differences between Mr Agius and his sons in relation to the running of Grand Masters and to a lesser extent Mr Agius’s age and years out of work.
It was submitted that there was doubt relating to the question of loss of earnings on his own account and that Mr Agius’s current income was not derived from passive investment he having established multiple companies of which he remained a director, shareholder and partner and received income usually via the family trust. He had been held out to be the head of the company by the company and by AMP and continued to sign off on all resolutions and reports of all companies, consistent with his role as principal director and shareholder. While the activities throughout the group had changed, in particular since 2015 when Grand Masters was sold, Mr Agius continued in his other company director roles.
Dr Hoel in response
In reply to the Respondent’s submissions Dr Hoel pointed out the nature of the legislation as provided by s 119(1) and the difficulties that had arisen with the passage of time since Mr Agius had been employed by Grand Masters. The lack of records made it difficult to quantitate any loss of income. In particular this related to the unavailability of taxation returns.
Dr Hoel also contended that Mr Agius’s return to work for 12 months in 2009/2010 for one day per week, was a genuine effort to seek remunerative work in accordance with s 24(2)(b) of the Act and the evidence before the Tribunal was that Mr Agius was bored and anxious to resume work particularly as Grand Masters was not performing well and his sons were of the opinion that their father could attract new and previous old business back to the company.
Mr Rudge sought leave to make written submissions on the question of s 24(2)(b) as raised by Dr Hoel for the first time in response. Leave was granted.
In these written submissions, it was contended that s 24(2)(b) of the Act did not relate to Mr Agius as he had been engaged in remunerative work as a farmer, and as a director and public representative of the companies and other entities previously described. While Mr Agius’s farming activities did not attract a profit, the farm carried up to 105 head of cattle and the losses form part of annual tax returns from at least 2006. Reliance was placed on the Full Court of the Federal Court decision of Counsel v Repatriation Commission (2002) 122 FCR 476 (Counsel) per Gray J where his Honour said:
[13] The learned primary judge drew attention to the link between “remunerative work” and the expressions “salary or wages” and “earnings” in s 24(2A)(d) and (e) of the VE Act. His Honour expressed the view that both “earnings” and “salary or wages” concern the product of “remunerative work”. In the context of a discussion of the meaning of “remunerative work” his Honour doubted that Wilcox J in Hill intended to say that work in a business could never be remunerative if the business made no profit...
In Counsel the Court had also considered the loss of earnings requirement in s 24, and specifically s 24(2A)(e), and considered that it related to gross earnings not nett earnings (at [21] per Gray J; [57] per Carr J; and [74]-[80] per Goldberg J).
TRIBUNAL’S DELIBERATIONS
In accordance with s 19(9) of the Act, the assessment period relating to Mr Agius’s claim for payment of the DSP at the special rate commenced on 24 May 2011 and terminates at the time of the handing down of this decision. By a consent agreement subsequently adopted by the Tribunal in accordance with s 42C of the AAT Act, Mr Agius’s diagnosis of PTSD was accepted as being war-caused and backdated to the date of application of 24 May 2011. Mr Agius’s degree of incapacity as a result of this acceptance was set at 100 per cent of the general rate. At the time of his application Mr Agius was 64 years of age.
At the VRB’s hearing and determination of 1 May 2013 it was decided that there was no diagnosable psychiatric condition relating to the veteran’s operational service in Vietnam. The most recent VRB hearing conducted on 26 May 2015 was in relation to Mr Agius’s eligibility for the special rate. The VRB found there was no medical evidence to support the contention that Mr Agius had ceased work solely because of his PTSD as this had not been diagnosed until 2012. Other factors considered were Mr Agius’s statement that he had been out of the workforce for 15 years and his age which at the time of this hearing was 66 years. These latter two factors were considered to prevent him from undertaking remunerative work.
Mr Agius has been assessed by seven psychiatrists between 2011 and 2014 and has been treated by three of these specialists. He was initially referred to Dr Heffernan and seen in January 2011, some two months after suspicions had been raised at least in Mrs Agius’s mind that he might have PTSD, she having come to this conclusion after they had spent five days at the VVCS lifestyle meeting. Dr Heffernan did not make a diagnosis of a psychiatric disorder as he considered Mr Agius’s sleep apnoea was playing a major role in his symptomatology. In particular his daytime tiredness and unrefreshing sleep would impact on considerations and assessment of, for example, his ability to concentrate. Dr Heffernan requested by letter to the general practitioner and also to the respiratory physician, Dr Braun, who had performed the sleep apnoea testing, that treatment with CPAP be undertaken before an assessment of Mr Agius’s psychiatric status could be confidently undertaken. As this did not occur and because of conflict between Dr Heffernan and Mr Agius, Dr Heffernan withdrew from his treatment in December 2011.
Dr Farnbach made a diagnosis of generalised anxiety disorder (GAD) and also expressed his concern regarding the contribution by Mr Agius’s sleep apnoea to his symptomatology, recommending that treatment for the sleep apnoea be initiated. The remaining five psychiatrists made a diagnosis of probable PTSD and of these, three did not address Mr Agius’s work capacity. Overall, four psychiatrists did address the question of work capacity. Dr Chambers in 2014, stated that Mr Agius could work 10 – 15 hours including working as a financial advisor and the remaining three, Doctors Collier, Cooper, Kaplan and possibly Dr Fernando, who said he could not work more than eight hours, although Dr Kaplan felt continuing to work on the farm would be therapeutic.
Based on the psychiatric evidence the Tribunal accepts the diagnosis of PTSD and that Mr Agius cannot work for more than eight hours per week. It is also accepted that Mr Agius’s primary remunerative work was that of a financial advisor (Flentjar v Repatriation Commission (1997) 48 ALD 1 (Flentjar)) but it is noted that his success in the area of financial advising resulted in him being in a position to develop other income‑generating pursuits as an investor, property developer and company director all of which goes by virtue of his personal exertion prior to his cessation of work as a financial advisor in late 2001.
Neither Dr Hoel nor Mr Rudge made submissions relating to the application of the Flentjar test in this matter. The Tribunal has adopted the Flentjar test where the Full Court of the Federal Court held at pages 4-5 that:
The issues before the Tribunal were:
1.What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the Act?
2.Was F, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
3.If so, was the war-caused injury or war-caused disease or both, the only factor or factors preventing F from continuing to undertake that work?
4.If so, was F by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?
In Mr Agius’s claim the relevant remunerative work was financial advising and he was so prevented from continuing to undertake that work by reason of his war-caused PTSD. However, this was not the only factor preventing him from continuing to undertake that work and therefore, the answer to question three is No. Thus, on the Flentjar test s 24(1)(c) is not satisfied.
Mr Agius does satisfy the requirements of s 24(1)(a) and s 24(1)(b) of the Act in relation to eligibility for payment of the disability pension at special rate and given that the majority of the psychiatrists who addressed the question have concluded he cannot work for more than eight hours per week, any consideration of eligibility for the intermediate rate is not relevant.
The issue before the Tribunal related to Mr Agius’s satisfaction of the requirements of s 24(1)(c) in respect to the so called alone test and should he satisfy the alone test it must be shown that he has experienced a loss of salary, wages or earnings as a direct result.
The alone test of s 24(1)(c) has two limbs, the first of which is the most relevant in this matter. In the recent decision in Re Redden v Repatriation Commission [2015] AATA 273 (Redden), Deputy President F Alpins has considered the approach of the Federal Court to the interpretation of this limb in detail and this Tribunal will not address these authorities in detail, relying on the decision in Redden.
While the Full Federal Court’s interpretation of the alone test of s 24(1)(c) in Richmond was considered to be at odds with that of a differently constituted Full Court in Smith v Repatriation Commission (2014) 220 FCR 452 (Smith), the latter stated that the first limb of 24(1)(c) involves a question of fact, informed by common sense (Smith; per Rares J at [16]).
In Richmond the Full Court of the Federal Court considered the alone test element of s 24(1)(c) in detail and stated:
[57] The first limb of s 24(1)(c) requires the decision-maker to decide whether the veteran’s war-caused injury or disease (or both) alone prevented him or her from continuing to undertake the remunerative work the veteran was engaged in. The alone element of the test 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.
the Court concluded:
[58] The first limb provides that 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 Full Court’s interpretation of the alone test of s 24(1)(c) was considered by a differently constituted Full Court in Summers with the Court stating at [194]: We also consider Richmond to be correct, they having also noted that in Repatriation Commission v Watkins [2015] FCAFC 10 (Watkins) per Kenny, Barker and Rangiah JJ in overturning the decision of Bromberg J at first instance, said at [61] that: the decision in Richmond ...[was] correct and applicable in [Watkins].
The medical evidence before the Tribunal confirms that Mr Agius suffers from severe sleep apnoea and has done so from at least 2010 but according to the report of Dr Fernando since 2008. This has been commented on by the psychiatrists Dr Farnbach, who has described Mr Agius’s sleep apnoea as being significant, and Dr Heffernan, who has said he was unable to make a definitive diagnosis of psychiatric disorder until such time as Mr Agius underwent treatment for his sleep apnoea. Both Dr Farnbach and Dr Heffernan raised the possibility that Mr Agius’s mood disorder may be due, at least in part, to sleep deprivation resulting from sleep apnoea.
Dr Cooper has referred to Mr Agius’s broken sleep and Dr Fernando had acquired a history of four years of sleep disturbance due to Mr Agius’s waking six to seven times per night. Dr Fernando appears to have considered the sleep disturbance as being a symptom of the psychiatric disorder he diagnosed as a GAD. Doctors Kaplan, Collier and Chambers make no reference to sleep disturbance or sleep apnoea, presumably on the basis of the history given to these particular psychiatrists by Mr Agius.
In addition there is a documented history of nocturia with Mr Agius waking to pass urine six to seven times per night. This has been recorded in the general practice notes of 23 July 2012 and again on 13 May 2015. On the latter occasion Mr Agius was referred to an urologist. A past history of renal colic and haematuria was also referred to. The Tribunal has not been provided with the reports of the urologist but it is noted that the psychiatrist Dr Kaplan referred to a diagnosis of prostatomegaly which could explain Mr Agius’s nocturia.
Based on the medical data as confirmed by Mrs Agius in her evidence in relation to both the sleep apnoea and the nocturia, Mr Agius’s sleep is interrupted at least seven or more times per night. In addition Mrs Agius has said that when she notes an apnoeic period she slaps her husband to initiate a normal breathing pattern. It is recorded and confirmed by Mrs Agius, that Mr Agius suffers from a daytime tiredness. Clearly such symptomatology would impact, as posited by Dr Heffernan, on Mr Agius’s concentration and mood. While these two conditions may not of themselves prevent him from undertaking remunerative work as a financial advisor, they are certainly non war-caused preventive factors.
Appling the more stringent interpretation of the alone test provided by Richmond as confirmed by the Full Court in Summers and Watkins, the Tribunal determines that Mr Agius does not satisfy the requirements of the first limb of s 24(1)(c), that being the alone test, as Mr Agius’s war-caused incapacities do not alone prevent him from continuing to undertake the remunerative work of financial advising. As a result he does not qualify for the special rate of pension. It is acknowledged that s 28 is not attracted in relation to s 24.
At the time of lodging his application for special rate of pension Mr Agius was 64. The so‑called ameliorating provision of s 24(2)(b) is attracted and the Tribunal must consider if Mr Agius was genuinely seeking to engage in remunerative work.
The Full Federal Court in Leanne v Repatriation Commission (2004) 81 ALD 625 while accepting the primary judge’s definition of seeking as requiring that the claimant was actually attempting to or trying to obtain remunerative work, held that this must occur during the assessment period ([7] and [28]). Mr Agius’s evidence that he returned to Grand Masters for a few or twelve months for one day per week occurred before commencement of the assessment period. He undertook this one day per week involvement as he was feeling better, was bored on the farm and importantly the financial advisory service was losing clients and the gross income had fallen from up to one million dollars gross per annum.
Mr David Carlson who has been Mr Agius’s accountant for over 20 years advised on 17 November 2014 that the performance of the financial planning business has suffered substantially since Norm has no longer been involved. Mr Agius’s return to Grand Masters in 2009 was, in his evidence before the VRB, more something of an exercise in P.R. to retain or attract back old clients despite him being precluded from giving financial advice as he had not been qualified/licensed to do so for eight years.
Other factors such as age and time out of the workforce have been considered. Time out of the workforce, again based on the evidence, most probably dates from early 2002 and is therefore contributory, although several reports, in particular those from the psychiatrists, have varying dates of cessation of work ranging from 2003 until 2010. Mr Agius’s age is not considered to be a substantive factor and other considerations are rendered irrelevant by the determination that Mr Agius does not satisfy the first limb of s 24(1)(c).
The Tribunal affirms the decision under review. Mr Agius does not meet the eligibility criteria for special rate but on different grounds to those determined by the VRB and the original decision-maker.
I certify that the preceding 91 (ninety‑one) paragraphs are a true copy of the reasons for the decision herein of:
Miss E A Shanahan, Member[sgd].........................................................
Dated 19 January 2017
Dates of hearing 7 and 8 September 2016 Final submission received 28 September 2016 Counsel for the Applicant Dr A Hoel
Solicitor for the Applicant Williams Winter, Mr M Jorgensen Advocate for the Respondent Mr K Rudge APPENDIX
APPLICANT
A1 Statement of Norman Agius dated 9 June 2015
A2 Statement of Carmen Agius dated 9 June 2015
A3Statement of Oliver Agius dated 17 November 2013
A4 Nine pages of photographs of awards presented to Mr Norman Agius or MJ Agius Pty Ltd between 1981 and 1998
A5Statement of Daniel Agius dated 17 November 2015
RESPONDENT
R1 T-Documents
R2 Bundle of 28 pages of accounting data and letters, including extract from website
R3Cove Family Medical Centre records for Mr Norman Agius
R4 Transcription of VRB Hearing on 26 May 2015
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