BARRY GEOFFREY NUNN and REPATRIATION COMMISSION
[2012] AATA 46
•31 January 2012
[2012] AATA 46
| Division | GENERAL ADMINISTRATIVE DIVISION |
| File Number | 2009/4361 |
| Re | BARRY GEOFFREY NUNN |
| APPLICANT | |
| And | REPATRIATION COMMISSION |
| RESPONDENT |
DECISION
| Tribunal | G. D. Friedman, Senior Member |
| Date | 31 January 2012 |
| Place | Melbourne |
The Tribunal sets aside the decision under review and substitutes a decision that Mr Nunn is entitled to payment of disability pension at the special rate with effect from 26 February 2008.
.................................[sgd].......................................
G. D. Friedman, Senior Member
VETERANS' AFFAIRS – veterans’ entitlements – special rate of pension – soil and gravel supply business – post traumatic stress disorder and major depressive disorder – whether incapacity from war-caused injuries ‘alone’ prevented the veteran from undertaking remunerative work
Veterans’ Entitlements Act 1986 ss 24(1)(c), 24(2)(a), 24(2)(b)
Banovich v Repatriation Commission (1986) 69 ALR 395
Cavell v Repatriation Commission (1988) 9 AAR 534
Flentjar v Repatriation Commission (1997) 48 ALD 1
Forbes v Repatriation Commission (2000) 101 FCR 50
Repatriation Commission v Hendy (2002) 76 ALD 47
REASONS FOR DECISION
G. D. Friedman, Senior Member
31 January 2012
Barry Nunn is receiving disability pension at 70 per cent of the general rate and he now seeks the higher loss-of-earnings related payment known as special rate. He operated a soil and gravel supply business, which he sold in 2007, and he has not worked since.
The special rate of pension requires, among other things, that a person is prevented from continuing to undertake remunerative work, and cannot work more than eight hours per week, by reason of war-caused disability. The respondent says that Mr Nunn is not entitled to special rate because there were reasons other than his war-caused disabilities of post-traumatic stress disorder (PTSD) and major depressive disorder that account for him not continuing to work during the assessment period.
LEGISLATIVE BACKGROUND
Section 24 of the Veterans' Entitlements Act 1986 (the Act) makes provision for payment at rates higher than 100 per cent of the general rate of pension:
24(1) This section applies to a veteran if:
(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…
(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…
(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.
ISSUE
There was no dispute that Mr Nunn satisfies s 24(1)(a) and s 24(1)(b) of the Act. The issue before the Tribunal is whether Mr Nunn satisfies s 24(1)(c) of the Act: the alone test.
DOES MR NUNN SATISFY SECTION 24(1)(C) OF THE ACT: THE ALONE TEST?
Mr Nunn told the Tribunal that he was born in Tongala, Victoria. He left school at the age of 16 years to work in the soil and sand supply business operated by his father and uncle. On 1 May 1968 he commenced National Service and served in Vietnam from 14 January 1969 until 16 January 1970 as a driver. After his discharge on 30 April 1970 he returned to the family business which was divided in the late 1970s and he worked in partnership with his father until his father retired in 1987. He and his wife took out a $100,000 mortgage on their family home and in 1994 purchased the business which they expanded in 1999. They continued to operate it (known as the Nunn Family Trust) and paid off the mortgage in 2006 until the business was sold in 2007 for $160,000, including land, concrete bins and a portable office. Trucks and other items were sold separately. Mr Nunn also inherited a share of his father's business (owned with his uncle) in 1999 (known as Ky Valley Sand Hill) and operated that business until 2007.
Mr Nunn stated that his duties in the business owned by him and his wife involved driving a truck, operating plant and equipment, customer contact and administrative responsibilities. He said that he worked up to 60 hours each week. He explained that the decision to sell was made because of the pressure of managing the business and his inability to respond to its daily demands. Mr Nunn stated that he had difficulty communicating with customers, and was sometimes short-tempered and abusive. He found he could not handle the stress of operating the business; he would forget orders and was unable to carry out simple tasks such as maintenance of equipment.
In relation to the nature of the business and economic conditions, Mr Nunn emphasised that over the years there were many ups and downs, although he was not affected unduly by drought because when necessary he shifted the focus of the business from farm work to the supply of materials for government-based roadwork construction. However he said that eventually his medical conditions led to severe ill-health and strained his relationship with his wife and daughters. He was becoming disengaged and withdrawn, and he had a short temper. His wife insisted that he sell the business as a way of reducing stress and threatened to leave him if he did not, and although he resisted for some time because of his long family connection, in the end he realised that he had no option, and made the decision to sell the business so that he could cease work and reduce the pressures on him.
Mr Nunn acknowledged that his bookkeeper spoke to him about the deteriorating financial circumstances of the business, but said that in December 2006 the decision to sell was made entirely on medical grounds because of his ill-health. He stated that he and his wife still live in Tongala and he part-owns land outside the town which is used by a neighbour for agistment. He said that he receives a nominal fee but otherwise does not work. Under cross-examination he agreed that he told the Veterans' Review Board (VRB) that in 1999 he terminated the employment of two staff in about 2004 or 2005 because the business was not performing well. He also told the VRB that in about 2006 his bookkeeper told him that he was not in a position to keep the business going, and that a year previously his accountant had given him similar advice.
Mrs J Nunn, wife of Mr Nunn, told the Tribunal that although she was a partner in the business she had nothing to do with its day-to-day operations. She explained that when she met Mr Nunn he was a pleasant and relaxed person who loved his work driving trucks in the family business. However in in recent years she became aware from customers that at times Mr Nunn had been rude, abrupt and abusive when dealing with them. She stated that he told her that he was not coping, and she suggested selling the business because of his mood swings and ill-health and the effect on their marriage, not for financial reasons.
Witness statements were received from a number of Mr Nunn's former associates, employees and customers, attesting to his mood swings, abusive behaviour and forgetfulness when he was operating the business. Several mentioned that they had known him for many years and that he was a good bloke so they continued to do business with him, although they noticed a significant deterioration in his ability to operate the business and provide reliable service after he took over in 2004.
Ms J Fitzgerald told the Tribunal that she was employed by the previous owners of the business when Mr and Mrs Nunn bought it in 1994. She said that she was retained as the sole office employee, and had responsibilities for bookkeeping, reception and other administrative tasks, including budgeting. She said that in 1994 the business employed three full-time and two part-time staff and was operating successfully. However she observed over time that Mr Nunn did not respond well to the pressures of the business and displayed poor decision-making and a negative attitude towards staff and customers. This led to staff turnover and a reduced customer base, compounded by the drought of 2002/03 which had an adverse effect on the viability of the business.
Ms Fitzgerald said that she was aware that Mr Nunn had serious and ongoing mental health issues. She agreed that in late 2006 she told him that he needed to think about selling the business because in her opinion his health would not allow him to continue to operate the business successfully.
Dr N Strauss, consultant & occupational psychiatrist, stated in a report dated 14 April 2010 that Mr Nunn said that he sold the business because he was not coping and also because the business was not bringing in adequate remuneration due to drought conditions. Mr Nunn told Dr Strauss that he …did not have the wherewithal to take on any other work and so he decided to sell. Dr Strauss noted that Mr Nunn had bought out family members and had operated the business virtually by himself, and stated that he was not necessarily convinced that Mr Nunn is unable to work because of any service-related condition. Dr Strauss concluded that Mr Nunn had worked for years even if he did have a war-caused PTSD and that Mr Nunn ceased work because of economic circumstances and because of depression related to his employment. Dr Strauss also said that the psychiatric conditions alone prevent Mr Nunn from working more than eight hours per week.
Dr C Seabridge, consultant psychiatrist, stated in a report dated 11 September 2010 that Mr Nunn had not displayed overt signs of PTSD on return to civilian life, and that this was not uncommon. He said that the late expression of symptoms appears to have come about as management strategies in difficult financial circumstances became less available to Mr Nunn, despite him working long hours. Dr Seabridge concluded that Mr Nunn was forced to discontinue remunerative employment, even in an environment where he was operating his own business, as a direct and sole consequence of PTSD, including symptoms of depression.
In Flentjar v Repatriation Commission (1997) 48 ALD 1 the Full Federal Court described the test in s 24(1)(c) as:
(1) What was the relevant "remunerative work that the veteran was undertaking" within the meaning of s 24(1)(c) of the Act?
(2) Is the veteran, by reason of war caused injury or war caused disease, or both, prevented from continuing to undertake that work?
(3) If the answer to question 2 is yes, is the war caused injury or war caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?
(4) If the answer to questions 2 and 3 are, in each case, yes, is the veteran 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 Cavell v Repatriation Commission (1988) 9 AAR 534 Burchett J said that decisions regarding s 24(1)(c) should be made with an eye to reality and that common sense is the proper guide. This principle was supported in Forbes v Repatriation Commission (2000) 101 FCR 50.
In Banovich v Repatriation Commission (1986) 69 ALR 395 the Full Federal Court stated at 402-3:
…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.
In Repatriation Commission v Hendy (2002) 76 ALD 47 the Full Federal Court stated at 54-5:
The decision-maker is required to take into account any factor that plays a part or contributes to a veteran's being prevented from continuing to engage in remunerative work. If a period of time elapses after a veteran ceases remunerative work and before the commencement of the assessment period, lack of recent work experience, time out of the workforce and increasing age will be relevant for consideration under s 24(1)(c) of the Act. The decision-maker is required to consider the effect, contribution to, and relative weight to be attached to any or all of those factors during the assessment period.
In applying Mr Nunn's circumstances to the Flentjar test, the answer to question one is operating his family soil and gravel supply business, which is the most recent type of work performed by Mr Nunn since his discharge from the army. On the material available to the Tribunal the answer to question two is yes.
In relation to question three the Tribunal takes into account the evidence from Mr Nunn and Mrs Nunn plus the evidence from Dr Strauss and Dr Seabridge about the impact of the accepted psychiatric conditions on Mr Nunn's ability to work. The Tribunal accepts Mr Nunn's evidence that he enjoyed his involvement in the family business from the age of 16 years and seems to have been a competent and reliable truck driver who initially related well to his customers. This is supported by the evidence of Mr Nunn's former associates, employees and customers. The Tribunal accepts that after purchasing the business in 1994 his ability to operate the business declined because of his medical conditions that affected his relationships with staff and customers, leading to a decline in the customer base and a consequent reduction in the viability of the business.
The Tribunal accepts the evidence from Mrs Nunn that Mr Nunn's mood swings and general attitude had damaged the business as well as family relationships and that her ultimatum to him to sell the business to save the marriage was based on her concerns about his medical conditions rather than the financial viability of the business. This is consistent with Ms Fitzgerald's evidence that she had become aware of the effect of his health on the customers and therefore the viability of the business, and that it was for this reason that she raised with him the desirability of selling the business.
The Tribunal takes into account that Dr Strauss concluded that Mr Nunn ceased work because of economic circumstances and because of depression related to his employment, but Dr Strauss also noted that the psychiatric conditions alone prevented him from working more than eight hours per week. The evidence from Dr Seabridge that Mr Nunn was forced to cease work solely because of PTSD and depression supports the view that the psychiatric conditions caused the decline in the financial viability of the business.
Taking all relevant matters into account the Tribunal concludes that Mr Nunn's accepted conditions of PTSD and depressive disorder led to an increasing inability to cope with the pressures of operating the business and to a decline in the customer base because of his mood swings and his poor customer service. It was for these reasons that he was unable to continue to work or operate the business, and not for financial or other reasons. Therefore the Tribunal finds that the war-caused conditions were the only factors preventing him from continuing to perform the type of work that he was undertaking, so the answer to question three is yes.
In relation to question four the Tribunal is satisfied that by selling the business and being unable to work Mr Nunn is suffering a loss of income that he would not be suffering if he did not have his accepted conditions, so the answer to question four is yes. Consequently Mr Nunn satisfies s 24(1)(c) of the Act and meets the criteria for the grant of special rate, and there is no need to consider s 24(2)(a) or s 24(2)(b) of the Act.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision that Mr Nunn is entitled to payment of disability pension at the special rate with effect from 26 February 2008.
| I certify that the preceding 25 (twenty five) paragraphs are a true copy of the reasons for the decision of G. D. Friedman, Senior Member. |
............................[sgd]............................................
Associate
Dated 31 January 2012
| Dates of hearing | 11 and 12 July 2011, 25 January 2012 |
| Counsel for the applicant | Mr C Thompson |
| Solicitor for the applicant | Peter Liefman |
| Solicitor for the respondent | Mr K Rudge, Department of Veterans’ Affairs |
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