Barbie and Repatriation Commission

[2006] AATA 1018

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 1018

ADMINISTRATIVE APPEALS TRIBUNAL          № V2005/904

VETERANS’      APPEALS      DIVISION

Re:            BORIS BARBIE

Applicant

And:           REPATRIATION COMMISSION

Respondent

DECISION

Tribunal:       Mr B.H. Pascoe, Senior Member

Date:29 November 2006

Place:Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd)  B.H. Pascoe

Senior Member

VETERANS’ AFFAIRS – disability pension – special rate – meaning of remunerative work – reason for ceasing work

Veterans’ Entitlements Act 1986 s 24

Sheehy v Repatriation Commission (1996) 41 ALD 205

REASONS FOR DECISION

29 November 2006   Mr B.H. Pascoe, Senior Member

1. This is an application to review a decision of the Repatriation Commission (the respondent) which assessed the pension entitlement of the applicant, Mr B. Barbie at 100 per cent of the general rate from 26 February 2004. In the decision, the respondent did not accept that Mr Barbie was eligible for a pension at the special rate pursuant to s 24 of the Veterans’ Entitlements Act 1986 (the Act). It was this finding under s 24 which was the primary purpose of the application to this Tribunal. The respondent’s decision had been affirmed by the Veterans’ Review Board (VRB) on 27 September 2005.

2.      At the hearing, Mr Barbie was represented by Mr D. De Marchi, a solicitor, and the respondent by Mr G. Purcell of counsel.  Evidence was given by Mr Barbie and his wife, Mrs D. Barbie.

3.      The respondent had accepted the conditions of intracerebral haemorrhage and alcohol dependence or alcohol abuse as being war‑caused.  Mr Barbie’s impairment was rated at 95 points under the Guide to the Assessment of Rates of Veterans’ Pensions and, with a lifestyle rating of 6, his degree of incapacity was assessed at 100 per cent, giving him the entitlement to a pension of 100 per cent of the general rate.

4. Section 24 of the Act provides, so far as is relevant to this application:

(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 s 21A to be a 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.

…

5. Mr Barbie was born on 29 March 1946 and was 58 years of age at the date of his application for an increase in pension entitlement. There was no dispute that he satisfied the requirements of s 24(1) other than paragraph (c).

6.      Mr Barbie served in the Royal Australian Air Force (the Air Force) from 1967 to 1979 including three years in Malaya.  After leaving the Air Force in 1979 he worked as an air traffic controller at Tullamarine Airport.  He resigned in July 2002 at the age of 56.  Mr Barbie said that early retirement was available from age 50 but, financially, it was best to retire after age 55.  While he maintained that his original intention had been to remain employed until age 60, he said that he was finding it more difficult to cope with the shift work and long hours being often tired.  The primary health concern appeared to be headaches which had troubled him for a long time with the consumption of large quantities of aspirin.  Neither the headaches nor the claimed abuse of aspirin had been accepted as war‑caused.

7.      While Mr Barbie expressed concern at the quantity of alcohol he was consuming and the possible effect on his work, there was no evidence that his excessive alcohol consumption prevented him from continuing as an air traffic controller.  He was conscious of and abided by the rule of no alcohol within eight hours of commencing duty.  He did say that there were occasions when he was on call and required for duty at short notice that he breached that rule.  However, he could recall one occasion only when his supervisor noted that he had been drinking and told him to go and have a coffee and wait a period before commencing duty.  Mrs Barbie was quite firm in her evidence that Mr Barbie did not drink during the required period before commencing work.  In his annual medical examination there was no reference to any alcohol problems.  In his work review in November 2001, Mr Barbie’s supervisor rated his work as being of a high standard.  Mr Barbie accepted that there was not suggestion that his employer was unhappy with his work or that there was any pressure on him to retire.

8.      Mr Barbie had always been a keen golfer playing three times per week.  In March 1997 he completed a course in golf club making and repair and registered the business name of BB’s Golf Club Precision in November 1997.  He purchased equipment at a cost of some $5,000 to enable him to assemble and tailor golf clubs to an individuals needs.  He accepted that it started as a hobby but with the hope and some expectation of generating an income.  He made clubs for himself, his wife, his son, grandson and friends.  At best on these sets he recovered his costs.  He believed that he made some 12 sets of clubs for other customers with an average profit of approximately $500 per set.  Mr Barbie acknowledged that he had not included any income or expense relating to this golf club making activity in his income tax return.

9.      At the hearing an invoice book which was said to include the only invoices issued by Mr Barbie to arms length customers was produced.  This book contained 11 invoices between 12 March 1998 and 25 January 2004 of which one was marked as cancelled.  While some invoices were endorsed as paid and others not so endorsed if it is assumed that the invoices represent the total gross income derived. The revenue from the activity was:

Year dated 31 December 1998 Year dated 31 December 1999 Year dated 31 December 2000 Year dated 31 December 2001 Year dated 31 December 2002 Year dated 31 December 2003 Year dated 31 December2004 5 Sales 1 Sale 2 Sales Nil Nil 1 Sale 1 Sale $5,135 $1,200 $1,695 Nil Nil $320 $2,260 $10,610

Mr Barbie said that he had placed advertisements in his local paper, left business cards at local golf clubs and otherwise sought business by word or mouth.  He believed that he spent a minimum of two hours per week in this activity.  He suffered a stroke in February 2004 which precluded him from any further golf club making activity.

10.     In November 2003, Mr Barbie forwarded an expression of interest to Air Services Australia for part-time work.  He said that he became aware of the possibility of such work by word of mouth.  He obtained the form from the internet and hoped he might obtain training work for some six months of the year.  He said that he was advised verbally by a friend that no such work was available at the time.  I am unable to accept that this expression of interest constitutes a genuine seeking of remunerative work nor that his incapacity prevented him from undertaking such work. 

11. As indicated earlier the sole issue in this case is whether Mr Barbie satisfied the requirements of s 24(1)(c) of the Act. In relation to his cessation of work as an air traffic controller, I am satisfied that his then war‑caused condition of alcohol dependence or alcohol abuse was not the primary or a major reason for such cessation. While Mr Barbie may have had some concerns about the possible effect of his alcohol consumption on the standard of his performance, it is clear that, at the time of his retirement from employment, it was not a significant factor. The principal medical or physical complaint referred to by Mr Barbie was his headaches which on the evidence of both Mrs Barbie and himself had been a problem all his life and were not related to his service. In addition it would seem that his superannuation allowed him to retire at 55 and Mr Barbie and his wife decided to do more travelling and play more golf at various courses around Australia. Consequently, I find that his retirement from employment as an air traffic controller does not satisfy the requirements of s 24(1)(c) of the Act.

12.     It was submitted that the stroke suffered by Mr Barbie in February 2004, an accepted war‑caused condition, prevented him from undertaking the remunerative work that he was undertaking prior to the stroke, in the business of golf club making and repair.  It is noted that in the period from March 1998 to January 2004, Mr Barbie made 10 sales of golf clubs for a total amount of $10,610.  Of these, only two sales totalling $2,580 were made in the 19 months after his retirement from his employment as an air traffic controller and prior to his stroke.

13. As indicated earlier, there was no dispute that Mr Barbie satisfies the requirements of paragraphs (aa), (aab), (a) and (b) of s 24(1) of the Act. The question for decision is whether the Tribunal can be reasonably satisfied that he meets the requirements of paragraph (c) as effected by s 24(2). In considering what constitutes remunerative work it is appropriate to consider what was said by the Full Federal Court in Sheehy v Repatriation Commission (1996) 41 ALD 205.  At pages 209-210, their Honours made the following observation:

… In our opinion, the words “undertake” and “undertaking” in para 24(1)(c) import the notion of “performance” or of a “successful” or “effective” undertaking of work. …

Whether, as we think, para 24(1)(c) requires that the “remunerative work that the veteran was undertaking” must have been “performed” or “successfully undertaken” or “effectively undertaken”, has not been the subject of direct decision in the two cases in which the paragraph has been considered by full courts of this court. In Banovich v Repatriation Commission (1986) 69 ALR 395, 11 ALN N142 it was held that the same expression in the predecessor provision did not refer to “the particular job” which the member had previously undertaken but referred to a “type of work” or “field of remunerative activity” (at ALR 402–3). In Starcevich v Repatriation Commission (1987) 14 ALD 160, 18 FCR 221, it was held that para 24(1)(c), and in particular the word “continuing” in that paragraph, does not require that the remunerative work that the veteran is prevented from undertaking be the last remunerative work which he undertook.

The construction which we have sought to explain above is consistent with both of these decisions and certain references in Starcevich directly support it. Fox J stated that the loss sustained by the veteran had to be “real” and this indicates that his Honour had in mind remunerative work that had been successfully undertaken. Even more to the point is his Honour's reference to “substantial remunerative work … undertaken in the past” [Emphasis added]. Similarly Jenkinson J suggested, although tentatively, that past remunerative work does not satisfy the terms of para 24(1)(c) unless it continued for more than a very short period

In Birtles v Repatriation Commission (1991) 24 ALD 545, 33 FCR 290 Hill J understood Starcevich as having excluded from consideration remunerative work which the veteran had undertaken for only a short period. His Honour identified the question to be asked as follows:

…has the veteran by reason of his war incapacity been prevented from “continuing” a type of remunerative work which he previously undertook (not being work undertaken only for a short period)? (at ALD 553 FCR 299)

Although it is perhaps understandable that there have been references in the cases to a “short” or “very short” period of work, we would prefer to say that the “remunerative work that the veteran was undertaking” must have been “performed or successfully undertaken” or “effectively undertaken”.

14.     In her evidence before the VRB, Mrs Barbie acknowledged that the involvement with golf clubs by Mr Barbie was a hobby, but it was going to be a little bit of supplement when he did retire.  Before this Tribunal, Mrs Barbie said that it was difficult to make money from golf club making and repair as it was competitive; her husband could not be seen as competing with the professional at his own club; and the work and income was intermittent.  No evidence of expenses was provided and it is not clear whether or how much a profit was generated from his few sales.

15.     Given the evidence of Mr and Mrs Barbie relating to his involvement with golf club making and repair together with the record of actual sales set out in paragraph 9 above it is difficult to see this involvement as remunerative work.  It could not be regarded as substantial, successfully undertaken or effectively undertaken.  At best it was a hobby of Mr Barbie from which he hoped some modest and intermittent income might be derived.  He clearly spent very little time between his retirement from full time work and his stroke on this activity.  In that 19 months he made two sales only.  One of these was a full set of clubs and the other was the sale of one club only.  It is relevant that he saw no reason to include any proceeds of sale or expenses in his income tax return.

16.     I cannot be satisfied that this involvement constituted remunerative work nor the suffering any loss of earnings as a result of the stroke. As such Mr Barbie does not satisfy the requirements of s 24(1)(c) of the Act. Consequently, the decision under review should be affirmed.

I certify that the 16 preceding paragraphs are a true copy of the reasons for the decision herein of

Signed:         Dianne Eva
  Associate

Date/s of Hearing  2 October 2006
Date of Decision  29 November 2006
Counsel for the Applicant         Mr D. De Marchi
Solicitor for the Applicant          De Marchi & Associates
Counsel for the Respondent     Mr G. Purcell
Solicitor for the Respondent     Department of Veterans' Affairs