Banovich, P. v The Repatriation Commission

Re: PETER BANOVICH
And: THE REPATRIATION COMMISSION
No. NSW G178 of 1986
Repatriation

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Fisher J.
Beaumont J.
Wilcox J.

CATCHWORDS

Repatriation - Claim for Special Rate (TPI) pension - Applicant incapacitated by war related disabilities - Applicant forced to retire from employment by employment injury - Whether that injury was caused by war related disability - Relevant date for determining whether economic loss sustained by reason of war related disabilities - Significance of fact that applicant would in any event have retired prior to date of application for pension.

Repatriation Act 1920, Schedule 2

Repatriation Legislation Amendment Act 1985, s.34

Administrative Appeals Tribunal Act 1975, s.44

Delkou v Repatriation Commission (Full Court of the Federal Court of Australia, unreported, 17 November 1986), Re McCartney and Repatriation Commission (1986) 4 AAR 518, Pringle v Repatriation Commission (AAT, not reported, 11 June 1986), Finkelstein v Repatriation Commission (AAT, not reported, 30 June 1986), Dell v Repatriation Commission (AAT, not reported, 29 August 1986), Mattson v Repatriation Commission (AAT, not reported, 2 July 1986) Ridyard v Repatriation Commission (AAT, not reported, 18 July 1986) referred to.

HEARING

SYDNEY

#DATE 17:11:1986

Counsel for the Applicant: Mr D M J Bennett QC with Mr G Miller

Solicitors for the Applicant: T Barrett, Australian Legal Aid Office

Counsel for the Respondent: Mrs P Fleming QC with Ms S Ward

Solicitors for the Respondent: Australian Government Solicitor

ORDER

The appeal be dismissed.

The appellant pay to the respondent its costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an appeal by the applicant, Peter Banovich, from a decision of the Administrative Appeals Tribunal, constituted by a Deputy President sitting alone, by which the Tribunal affirmed a decision of the Veterans' Review Board that the applicant was not entitled to a pension at the Special Rate prescribed by Schedule 2 to the Repatriation Act 1920 -- often referred to as "the TPI pension" -- and that his pension would therefore continue at 100% of the General Rate. The appeal is limited to matters of law: see s.44 of the Administrative Appeals Tribunal Act 1975.

The applicant was born on 9 September 1909, so that he was 76 years of age at the time of the hearing before the Administrative Appeals Tribunal. Mr Banovich served overseas during the Second World War, being discharged on 3 November 1944 with a Class D medical classification. Prior to discharge he was classified as unfit for any occupation involving heavy work. Subsequently, Mr Banovich was granted a war disability pension, the amount of which was, in 1960, increased to 100% of the General Rate. He has received the pension at that rate since that time.
Since 10 October 1962 it has been accepted that the following disabilities are attributable to Mr Banovich's war service:-

1. Fracture 4th, 5th and 6th cervical vertebrae,

2. Rupture long head left biceps,

3. Fracture right tibial tuberosity,

4. Dysentery,

5. Osteoarthritis of cervical spine,

6. Impotence,

7. Spondylitis,

8. Hysterical personality,

9. Osteoarthritis of hip joints.

For some years after his discharge from the Army Mr Banovich was self-employed. During the 1950s he worked as a driver, first for CSIRO and then for the Department of Works and Housing. From 1952 until at least 1960 he was employed by the Metropolitan Sewerage and Drainage Board as a "clerical labourer". On 28 April 1964 he commenced employment with the Commissioner for Railways (now the State Rail Authority). At that time the Railways had a policy not to recruit persons aged more than 47 years and Mr Banovich was then 54 years old. However, he gave his date of birth as 1917 and was employed, until September 1975 as a fitter's assistant and thereafter as a depot man.
Mr Banovich was retired from his employment with the State Rail Authority on medical grounds on 7 May 1977. He was then in fact aged 67 years and 8 months but the Authority's records showed him to be only 59 years and 8 months. So far as the Authority was concerned, and but for his disabilities, it seems that Mr Banovich's employment could have continued until 9 September 1982 when, according to the Authority's records, he would have turned 65 years.
The Tribunal made the following findings as to the circumstances of the applicant's retirement:

"The event that precipitated Mr. Banovich's retirement in 1977 was described by him as follows. He had been standing on a table cleaning a clock on the wall. His foot, which was very close to the edge of the table, slipped. He dropped one foot onto a swivel chair which spun around causing him to injure his right hip. Following examination by a doctor employed by the Authority, Mr. Banovich was told that he would be retired medically unfit because his hip was 'finished' - 'it will never be right'."

Later in the Tribunal's reasons, the Deputy President said that whilst it was "Quite possible that this injury aggravated his war caused disability of 'osteoarthritis of hip joints', I have no evidence before me to that effect": see para.27 of the Tribunal's reasons, cited below.
We interpolate that counsel for Mr Banovich attack this finding and submit that, in the conclusion it reached, the Tribunal asked itself the wrong question. It is contended that the evidence before the Tribunal showed that the injury at work was caused by the war related injury. We do not agree with these criticisms. The evidence relied upon by counsel for Mr Banovich for this purpose was as follows:

"Yes, did you have an accident?---Have an accident in our office, yes.

What happened?---I was going up on a table like that, and I was cleaning a clock on the wall - clock ---

Yes?---And I put my foot very close to the edge and as I could not move fast, because I am too stiff - my right shoulder, my neck - all is stiff - and hips. I could not - when I slipped I could not spin round quick so I dropped my foot on a chair to stop, but it happened to be a spinning chair and when I put the weight there she spins around and I hit my hip, harder than I - - -

And how did it - - - ?---Well, nearly a minute and a half I could not get up I was so pain in the right hip."

We do not think that the Tribunal was bound to conclude from such sketchy material that the injury which forced Mr Banovich's retirement was caused by any war related disability. More important, it was not a matter which was open for review by the Tribunal. Mr Banovich had not made a claim for a pension in respect of any incapacity said to arise out of this incident. Thus the Tribunal was not called upon to consider whether any such incapacity was war related. What was before the Tribunal was the different question of reassessment of the appropriate rate of pension payable to Mr Banovich by reference to several disabilities which were accepted as attributable to war service. In our reasons in Delkou v The Repatriation Commission, delivered this day, we have mentioned the distinction between a determination that the Commonwealth is liable to pay a pension to a member of the Forces on the ground of his incapacity on the one hand and the rate of any such pension on the other. In the present case, the Tribunal was concerned only with the latter question.
Mr Banovich has not engaged in paid employment since his retirement from the Railways.
On 20 June 1983 Mr Banovich applied for the Special Rate of pension. The application was refused by a Repatriation Board and the Veterans' Review Board affirmed that refusal on 15 January 1985.
Between the date of the decision of the Veterans' Review Board and the hearing before the Tribunal, namely on 6 June 1985, the Repatriation Legislation Amendment Act 1985 came into effect. That Act made important amendments to the Repatriation Act, as previously framed. One of these amendments was to Schedule 2 to the Act, that amendment effecting substituted criteria for the grant of a pension at the Special Rate. Before the Tribunal the parties accepted that, notwithstanding the fact that the application had been made -- and determined by the Veterans' Review Board -- before the enactment of the amendments, the Tribunal was bound to apply to the case the terms of the amended Schedule. The Tribunal agreed with the parties' understanding of the law. The contrary has not been argued before us, in this case, but we are satisfied, for the reasons we give in Delkou, that this is the correct position.
The relevant provisions of Schedule 2 are as follows:

"(1) The special rate of pension may be granted to --

(a) a member of the Forces who has been blinded as a result of war service; and

(b) any other member of the Forces if --

(i) the other member is in receipt of, or is eligible to receive, a general rate pension at the rate specified in column 3 of the table in Schedule 1;

(ii) the other member is totally and permanently incapacitated, that is to say, the member's incapacity from injury or disease that has been accepted as related to the member's relevant war service is of such a nature as, of itself alone, to render the member incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and

(iii) the other member is, by reason of incapacity from that injury or disease alone, prevented from continuing to undertake remunerative work that the member 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 member would not be suffering if the member were free of that incapacity.

(2) For the purpose of the last preceding paragraph --

(a) a member of the Forces who is incapacitated from injury or disease that has been accepted as related to the member's relevant war service 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 member has ceased to engage in remunerative work for reasons other than his or her incapacity from that injury or disease; or

(ii) the member is incapacitated, or prevented, from engaging in remunerative work for some other reason; and

(b) where a member of the Forces, not being a member 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 a substantial cause of his or her inablity to obtain remunerative work in which to engage, the member shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the member was undertaking.

(3) In determining whether a member of the Forces who is incapacitated from injury or disease is incapable of undertaking remunerative work, the Commission shall have regard to the following matters only:

(a) the vocational, trade and professional skills, qualifications and experience of the member;

(b) the kinds of remunerative work which a person with skills, qualifications and experience referred to in sub-paragraph

(a) might reasonably undertake; and

(c) the degree to which the incapacity of the member from injury or disease that has been accepted as related to the member's relevant war service has reduced his or her capacity to undertake the kinds of remunerative work referred to in sub-paragraph (b).

...

In this Schedule, a reference to remunerative work shall be read as including a reference to any remunerative activity."

(We have inserted, for convenience of reference, the numbers shown in square brackets, the paragraphs being unnumbered in the Schedule itself).

Paragraph (1)(b) of the Schedule, upon which the present applicant relies, specifies three qualifying criteria. They may be shortly described as receipt of 100% general rate pension, total and permanent incapacity and economic loss. There was never any question about the first element and, before the Tribunal, the Repatriation Commission conceded total and permanent incapacity.
But the Commission successfully disputed that the third element was made out. In its reasons for decision the Tribunal said this in relation to economic loss:

"22. There are, essentially, two questions posed by paragraph (1)(b)(iii). The first question is whether, by reason of the incapacity from the accepted disabilities alone, Mr. Banovich is prevented from continuing to undertake remunerative work that he was undertaking. 'Prevented' in this context, I understand to mean 'precluded'. The relevant question, in my view, is whether the incapacity from the accepted disabilities alone is what stands between the veteran and his continuing to undertake remunerative work that he was undertaking. If there are other reasons which prevent the member from continuing to so work, the first requirement of paragraph (1)(b)(iii) cannot be satisfied. In the present case, it was said that whatever incapacitating effect may flow from the applicant's accepted war disabilities, the applicant was now, by reason of his age, precluded from undertaking remunerative work. In support of this contention evidence was called from Mr. Ian Sneddon, the manager of the Cabramatta Job Centre of the Commonwealth Employment Service, who said that, quite apart from the highly competitive labour market for unskilled work, Mr. Banovich's age and disabilities would preclude him from obtaining full time employment, sedentary or otherwise. The part-time labour market, he said, was even tighter. That factor aside, however 'Mr. Banovich's stated disabilities would undoubtedly remain an unsurmountable barrier'. He concluded that, in his opinion, any of the three factors of age, labour market conditions or accepted disabilities, would make it extremely unlikely that Mr. Banovich would be able to obtain employment. The combination of all three factors 'would make it infinitely more unlikely'."

The Tribunal referred to the submission of counsel for Mr. Banovich pointing out that no age limit was imposed by the Schedule and went on:-

"24. In the present case, it is, I think, relevant that Mr. Banovich has throughout the bulk of his working life been employed in various Government authorities, all of which have a maximum statutory retiring age not in excess of 65 years. By the date of his latest application for the Special Rate pension in June 1983 (that being the application that is presently before me), he was 73 years of age, considerably beyond the statutory retiring age for the types of employment in which he had engaged during most of his working life. His only prospect of employment at that stage would have been in private enterprise - a prospect which, on the evidence of Mr. Sneddon, even if Mr. Banovich was assumed to be perfectly fit, was minimal having regard to

(a) the state of the labour market and (b) Mr. Banovich's age.

25. In my view, therefore, it follows that in June 1983, Mr. Banovich was not prevented from continuing to undertake remunerative work that he was undertaking by reason of incapacity from his accepted disabilities alone. He was, in my view, also prevented from continuing to undertake such work by reason of his advanced years. His age alone had become a barrier precluding any further prospects of employment in the workforce. In my view, therefore, he fails to satisfy the first requirement of paragraph (1)(b)(iii) of Schedule 2."

Although it was strictly unnecessary to consider the matter, the Tribunal also dealt with the second requirement of sub-para.(iii), in relation to which para.(2)(a) is relevant.

"27. In the present case, the evidence leaves no doubt that Mr. Banovich has ceased to engage in remunerative work. Looking back over his work history, I find that the reason Mr. Banovich has ceased to engage in such work, was the decision of the SRA to retire him on medical grounds by reason of the injury that he sustained to his right hip. Whilst it is quite possible that this injury may have aggravated his war caused disability of 'osteoarthritis of hip joints', I have no evidence before me to that effect. On the evidence as it stands, therefore, I am unable to find that Mr. Banovich ceased to engage in remunerative work by reason of incapacity from his accepted disabilities alone. Whether that conclusion be correct or not, it is my view, for the reasons earlier given, that Mr. Banovich was prevented from engaging in remunerative work not only by reason of the incapacity from his accepted disabilities but also by reason of his age. Accordingly, Mr. Banovich cannot be taken to be suffering a loss of salary or wages by reason of incapacity from his accepted disabilities alone."

Several grounds of appeal are argued on behalf of the applicant but they reduce to two major matters for determination: the proper interpretation of para.(1)(b)(iii) and the date at which the criteria specified by para.(b) must be satisfied.

The interpretation of para.(1)(b)(iii)
Sub-paragraph (iii) refers to "incapacity from that injury or disease alone". This is a reference back to sub-para.(ii) and to the concept of incapacity which it embodies; that is to say an incapacity:

(a) which is caused by an injury or disease that has been accepted as related to the member's war service; and

(b) which is such, of itself alone, to render the member incapable of undertaking remunerative work for more than eight hours per week.

It will be noted that sub-para.(ii) deals only with the nature of the incapacity. It includes no requirement of economic loss.

Sub-paragraph (iii) takes the incapacity described in sub-para(ii) and imposes two additional requirements: that the member be prevented by such incapacity from continuing to undertake remunerative work which he or she was undertaking and that, by reason thereof, the member suffer a loss of salary or wages or of earnings on his or her own account. In the usual case a loss of salary, wages or earnings will follow any prevention from continuing to undertake the remunerative work which the member was undertaking but there may be exceptional situations under which a person unable to continue that work continues to receive a salary, wages or earnings; in which exceptional case sub-para.(iii) would not be satisfied.
Counsel for the applicant submit that a member may be "prevented from continuing to undertake" remunerative work in two disparate ways: the member may lose his or her employment or he or she may be unable to obtain employment. They submit that, in either case -- but in the second case only where that the member has previously had employment -- it is accurate to speak of the incapacity preventing the member "from continuing to undertake remunerative work that the member was undertaking". The "loss of salary or wages" referred to in sub-para.(iii), they say, is the financial loss suffered because of the loss of existing employment or the loss caused by the inability of the member to obtain employment.
In the argument of counsel for the applicant, the distinction made in para.(1)(b)(iii) is reflected in the alternatives postulated by para.2(a); sub-para(i) referring to a case of loss of employment and sub-para(ii) to a case of inability to obtain employment. Unless para.2(a) is so construed, they say, a member who loses his or her employment for a non-war related reason -- for example, retrenchment -- or who is at some stage unable to obtain employment for a non-war related reason -- for example, imprisonment -- will never subsequently be entitled to receive a Special Rate pension, regardless of the subsequent employment effects of a war-related disability. In the present case it is enough, say counsel, that Mr Banovich ceased to work for the State Railway Authority because of a war related incapacity or was at some stage -- for example immediately after retirement by the Authority -- unable to work because of the war-related incapacity alone.
We accept that the loss referred to in para.(1)(b)(iii) may be caused either by a loss of existing employment or by an inability to obtain new employment. There is no difficulty in regarding either circumstance as preventing the member "continuing to undertake" remunerative work. But it is, in our opinion, erroneous to read the phrase "remunerative work that the member was undertaking" as referring to a particular job with a particular employer. The term "remunerative work" is used in the Schedule in a context which indicates an intention to refer to work generally: see, for example, para.(1)(b)(ii), para.(2)(b), para.(3). Consistently with that user the phrase "remunerative work which the respondent was undertaking" should be read as a reference to the type of work which the member previously undertook and not to any particular job. It follows that a member's loss of particular employment for a reason unrelated to a war disability would never destroy a member's subsequent entitlement to claim a Special Rate pension; the question would remain, at the relevant date for determination of a claim, whether the member was prevented by his or her war-related incapacity -- and by that incapacity alone -- from continuing in that field of remunerative activity.

The relevant date
Counsel for the applicant submit that an applicant is entitled to a Special Rate pension if he or she was at any time able to satisfy the criteria specified in para.(1)(b). They say that if, at some stage, the incapacity caused by the member's accepted war disability was, of itself alone, enough to prevent the member undertaking remunerative work and to occasion a loss of salary or wages, the entitlement to a Special Rate pension arises and that it is not lost because, before final determination of the claim for that pension, there arises some additional impediment to remunerative work.
The date at which the relevant facts must be considered has been discussed in a number of recent decisions of the Administrative Appeals Tribunal. In Re McCartney and Repatriation Commission (1986) 4 AAR 518 it was concluded that the applicant's qualification for grant of a Special Rate pension should be considered on the basis of the facts as they stood at the earliest date from which the Tribunal could approve payment at that rate; that is the date upon which the applicant made a claim which complied with s.25 of the Act. However, the issue in that case was whether the relevant date was the date of the application or the date of the hearing before the Tribunal. There is no reference in the Tribunal's decision to the possible relevance of an earlier date.
In Pringle v Repatriation Commission (not reported, 11 June 1986) a differently constituted Tribunal reached a different conclusion. By the date of this decision the Repatriation Act 1920 had been replaced by the Veterans' Entitlements Act 1986, but nothing was seen as turning upon that circumstance. The Tribunal found that, at a point of time earlier than the date of the application, all of the requirements of para.(1)(b) -- as it stood at the date of the Tribunal's decision -- were met by the applicant. It was held that he thereby became entitled to a grant of a Special Rate pension, an entitlement which was not lost because of subsequent events. "Any other view" the Tribunal said, "would discourage the well motivated person who would otherwise try to continue in useful work despite his disabilities and encourage those less well motivated for fear that if they did not apply for the TPI pension at the earliest possible opportunity they would later be debarred by the mere fact of increasing age".
In Finkelstein v Repatriation Commission (not reported, 30 June 1986) and Dell v Repatriation Commission (not reported, 29 August 1986) it was held by the Tribunal that the facts should be examined as at the date of the application for a Special Rate pension. A similar view was taken in two subsequent cases, each heard by a differently constituted Tribunal, Mattson v Repatriation Commission (not reported, 2 July 1986) and Ridyard v Repatriation Commission (not reported, 18 July 1986).
We have some sympathy for the comment made in Pringle, quoted by us, as to the effect of confining examination of the facts to the period commencing from the date of the application for a Special Rate pension. But it appears to us that the terms of the legislation permit no other conclusion than that contended for by the Commission. The purpose of Schedule 2 is to identify the persons to whom, to quote the opening words of the Schedule, a Special Rate pension "may be granted". In considering whether to grant a Special Rate pension, the decision-maker must be satisfied that the applicant is a person to whom the Schedule relates. Some such persons are identified by reference to past events. Under para.1(a) a person who "has been blinded" will qualify for a grant. Others (para.1(b)) are identified by reference to their possession of specified present characteristics. In this sub-paragraph all the criteria are couched in the present tense.
The task of the Administrative Appeals Tribunal, in reviewing a decision relating to an application for a pension, is to make the decision which the primary decision-maker ought to have made, upon the basis of the evidence before the Tribunal. Subject to any change in the relevant law, the Tribunal should put the applicant in the position in which he or she was entitled to be put at the time of the primary decision. It follows, we think, that the question whether a particular applicant complies with the criteria in para.(1)(b) of the Schedule should be considered as at the time of his or her application to the primary decision-maker for the grant of a Special Rate pension.
Having regard to the findings of the Tribunal, the present applicant faces two hurdles -- each of which we regard as insurmountable -- in his quest for a Special Rate pension. The Tribunal found that the cause of his retirement from the employ of the State Rail Authority was the the injury to his hip occasioned by the fall at work. This injury, which has not been accepted as a war related incapacity, thereafter would, in any event, have prevented Mr Banovich from continuing to undertake the remunerative work which he had previously undertaken. Consequently, even immediately after his retirement, Mr Banovich did not comply with sub-para.(iii). But, secondly, by the date of his application for a Special Rate pension -- June 1983 -- he would, in any event, have been retired by the Railways. His age, even according to their records, exceeded 65 years. And, although the Tribunal rightly accepted that a person was not automatically disentitled to a pension on attaining 65 years, the Tribunal found, on the facts of this case and having regard to Mr Banovich's employment history, that Mr Banovich would in any event have been unlikely to continue in remunerative work after the date upon which he would have retired from the Railways.
We see no error of law in the decision of the Tribunal.
Although we did not find it necessary to refer to it as an aid to the construction of the legislation, we note that our conclusion would appear to accord with the policy underlying its enactment. In his second reading speech introducing the Repatriation Legislation Amendment Bill 1985, the Acting Minister for Veterans' Affairs said:

"Since 1920, there has been a special rate of disability pension payable in circumstances where, because of total and permanent incapacity resulting from war service, a veteran has been unable to resume or to continue in civil employment. The special or TPI rate pension was designed for severely disabled veterans of a relatively young age who could never go back to work and could never hope to support themselves or their families or put away money for their old age. It was never intended that the TPI rate would become payable to a veteran who, having enjoyed a full working life after war service, then retires from work possibly with whatever superannuation or other retirement benefits are available to the Australian work force. Determining authorities have found the application of the present legislative provisions difficult because the provisions, unchanged since 1920, contain outmoded and imprecise terms. The amendments clarify the eligibility criteria and make it clear that to qualify for a TPI pension a veteran must be eligible for the 100 per cent general rate pension. In addition, the TPI rate pension can become payable only when a veteran is totally and permanently disabled by accepted disabilities and is thereby precluded from continuing to engage in remunerative work. If a person has had the usual span of a working life or has retired voluntarily or has left employment for reasons other than accepted disabilities, a TPI pension is not payable. It would be in only very rare cases that any veteran beyond the normal retirement age could be eligible for this pension. Special provision is made by the Bill to cover veterans who are under 65 years of age, are unemployed, and are genuinely seeking to engage in remunerative work."

(See Parliamentary Debates, House of Representatives, 17 May 1985 at pp.2645-6.)

The appeal must be dismissed with costs.

[1986] FCA 520

17 NOVEMBER 1986