Bonvino and Repatriation Commission
[2011] AATA 354
•26 May 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 354
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/1522
VETERANS' APPEALS DIVISION ) Re Anthony BONVINO Applicant
And
Repatriation Commission
Respondent
DECISION
Tribunal Mr R P Handley, Deputy President
Air Vice-Marshal (Dr) T K Austin AMDate26 May 2011
PlaceSydney
Decision That part of the decision under review dealing with the rate at which disability pension is paid to Mr Bonvino is set aside and a decision substituted that Mr Bonvino is eligible for payment of the pension at the Special Rate.
......................[sgd]...................
Mr R P Handley
Deputy President
CATCHWORDS
VETERANS' AFFAIRS - disability pension – special rate – whether accepted conditions alone cause of inability to work more than eight hours per week – decision to refuse claim for special rate set aside
RELEVANT ACT
Veterans’ Entitlements Act 1986 (Cth): ss 5Q, 19, 24, 120
CITATIONS
Banovich v Repatriation Commission (1986) 11 ALN N142; (1986) 69 ALR 395; (1986) 6 AAR 113
REASONS FOR DECISION
26 May 2011 Mr R P Handley, Deputy President Air Vice-Marshal (Dr) T K Austin AM 1. Anthony Bonvino has applied for the review of a decision of the Veterans’ Review Board (VRB) affirming a decision to refuse Mr Bonvino’s claim for osteoarthritis of the right shoulder and rotator cuff syndrome of the right shoulder and to increase the rate at which disability pension is paid to Mr Bonvino to 100% of the General Rate.
Background
2. Mr Bonvino, who is aged 63, served in the Australian Army from 23 April 1969 to 22 April 1971, with operational service in Vietnam from 4 March 1970 to 4 March 1971. He has a number of accepted disabilities: tick bite urticaria, acne vulgaris, chronic tonsillitis, post-traumatic stress disorder (PTSD), blepharitis in both eyes, bilateral sensorineural hearing loss, depressive disorder, alcohol abuse, acquired cataracts in both eyes, bilateral tinnitus, cervical spondylosis and lumbar spondylosis.
3. On 13 March 2009, Mr Bonvino applied to the Repatriation Commission (the Commission) for his right shoulder condition to be accepted as related to his operational service and for an increase in the rate of his disability pension. On 24 June 2009, a delegate of the Commission rejected Mr Bonvino’s claim in respect of his right shoulder condition, diagnosed as osteoarthritis of the right shoulder and rotator cuff syndrome of the right shoulder, on the ground that the conditions were not war-caused but decided that the rate of Mr Bonvino’s disability pension should be increased to 100% of the General Rate.
4. The VRB affirmed this on 26 February 2010 and, on 19 April 2010, Mr Bonvino applied to the Tribunal for a further review. He contends that he is eligible for payment of the disability pension at the Special Rate but is no longer claiming in respect of his right shoulder. Mr Bonvino said that further medical investigation has revealed that the pain in his right shoulder and arm is referred pain related to his cervical spondylosis.
The Relevant Legislation
5. Eligibility for the payment of pension at the Special Rate is set out in s 24 of the Veterans’ Entitlements Act 1986 (the Act) which states relevantly:
(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) …
6. ‘Remunerative work’ is defined in s 5Q(1) as meaning “any remunerative activity”. The standard of proof to be applied in deciding relevant matters in this case is that of the Tribunal’s “reasonable satisfaction” (s 120(4)).
7. The Commission concedes that Mr Bonvino satisfies s 24(1)(a)(i) – that the degree of incapacity from his war-caused injuries must be at least 70% - because the degree of his incapacity has been assessed at 100%, and also concedes he satisfies s 24(1)(b) - that he is totally and permanently incapacitated - because his accepted disabilities render him incapable of undertaking remunerative work for periods aggregating more than eight hours a week. However, the Commission submits that he does not satisfy s 24(1)(c) because he is not prevented from undertaking remunerative work because of his accepted disabilities alone. Further, the Commission contends that there is insufficient evidence to establish a resultant loss of earnings.
8. The issue for the Tribunal therefore is whether by reason of his accepted disabilities alone, Mr Bonvino is prevented from continuing to undertake remunerative work that he was undertaking, and is by reason of this suffering a loss of salary or wages or of earnings that he would not be suffering if he were free of that incapacity (s 24(1)(c)). Mr Bonvino will not be found to be suffering such a loss if he has ceased to engage in remunerative work for reasons other than his incapacity from his accepted disabilities (s 24(2)(a)).
The Medical Evidence
9. Dr Patrick Morris, psychiatrist, provided a report dated 6 March 2006 and gave evidence by telephone at the hearing. Dr Morris said he saw Mr Bonvino on nine occasions in the period until 31 December 2006. There was then a gap of nearly four years until he began seeing Mr Bonvino again on 13 August 2010, since when he has seen Mr Bonvino on six occasions. In his report, Dr Morris diagnosed Mr Bonvino as suffering from chronic PTSD, major depressive episode and alcohol abuse. He noted that Mr Bonvino did not want to be reminded about his experiences in Vietnam and avoided things that reminded him of the Vietnam War. Dr Morris said in his report that Mr Bonvino did not have the capacity to work for more than eight hours a week, although he could not be definitive about whether his psychiatric conditions were permanent or if some recovery could be expected.
10. In oral evidence, Dr Morris said that the opinion expressed in his report that Mr Bonvino did not have the capacity to work for more than eight hours a week remains unchanged. He was not surprised when Mr Bonvino resumed seeing him in August 2010 after nearly four years. When Dr Morris went over what had occurred in the interim with Mr Bonvino, his condition appeared to be much the same. The fact that he has attended Vietnam Veterans Association meetings does not necessarily mean that he is no longer trying to avoid being reminded of his experiences in Vietnam. Dr Morris said Mr Bonvino may still be avoiding such reminders.
11. Dr Peter Giblin, Orthopaedic Surgeon, provided a report dated 26 August 2010 and gave evidence by telephone at the hearing. He was referred to a report dated 14 January 2010 from Dr Jonathan Ball, Neurosurgeon and Spinal Surgeon, and said he agreed that the nerve root entrapment in Mr Bonvino’s cervical foramina is the predominant cause of the pain in his right shoulder and arm. In his report Dr Giblin said:
It is my view, that the pain referred to the right shoulder and upper extremity, is largely due to referred symptoms from the cervical spine as opposed to any intra-articular pathology.
12. Dr Giblin stated that Mr Bonvino was fit to undertake light sedentary office work for not more than eight hours per week, for example, work associated with residential development, but avoiding prolonged travelling (because he has a predisposition to soft tissue injury). However, he said that Mr Bonvino’s capacity for work is unpredictable and there will be periods when he will be unable to work at all. Dr Giblin said he was unaware that Mr Bonvino lies down for an hour or so in the middle of every day in order to relieve the pain. With such flexibility in his working day, he might be able to work up to 28 hours per week.
13. Dr Robin Chase, Occupational Physician, provided a report dated 20 August 2010 and gave evidence by telephone at the hearing. He stated that Mr Bonvino “cannot work in any manual capacity because of his neck and back pain”, nor “in any sort of administrative or clerical role, even at a relatively low level, because of his psychiatric condition”. This is due to his accepted disabilities alone. Dr Chase said the restricted range of movement in Mr Bonvino’s shoulders would prevent him engaging in heavy manual work, lifting his arms above shoulder level or repetitive use of his arms. However, Dr Chase said it is Mr Bonvino’s psychiatric condition that is preventing him from undertaking administrative or clerical work, and thereby also preventing him from undertaking property development work.
Mr Bonvino’s Evidence
14. Mr Bonvino provided a statement dated 16 December 2010 and gave evidence at the hearing. He described how after completing a five year apprenticeship as an electrician, having left school at the age of 16, he was conscripted into the Army at the age of 21. After National Service, he worked as an electrician with the NSW Transport Commission for about a year before spending six months working in Bougainville. He returned to Australia after only about six months when he became sick, and resumed working for the Transport Commission where he worked until about 1977. After this, he managed a squash court doing mostly administrative work for about four years until he got sick of it, then worked for his brother-in-law in a greengrocer’s shop for about 18 months before joining his brother as a partner in a business that his brother had started making cushions for outdoor furniture. His role was an administrative one. After he “fell out” with his brother about seven years later, his brother sold the business and Mr Bonvino derived about $750,000 from the proceeds of sale which he then lived off during a break from working.
15. Mr Bonvino said that through a friend, he began assisting in a financial planning business – sometimes assisting in interviewing clients or drawing up financial plans – doing the sort of work now undertaken by paraplanners. He did this for about four years but had trouble dealing with clients, being nervous and short with them. Then he took another break from work before getting involved in property development in the late 1990s. There were six investors in the Development Group Pty Limited with various backgrounds, including initially an architect, a builder and a solicitor. Mr Bonvino was involved not only in investing in the projects, but, because of his background in the building trade, also assisted in planning and financing the developments, supervision of the developments and in negotiating, for example, with banks, builders and real estate agents. For such input, he was paid a management fee.
16. Mr Bonvino said he was involved in this property development group until about 2003. After completion of a project and the redistribution of funds, he was convinced by a colleague to invest in a project in Alexandria which “went belly up”. He said he was not in the right frame of mind, did not make the right decisions, and was not strong enough to try and protect his position – he gave up. He lacks confidence in himself and gets irritable. He has tried to find work with some people he knows who are involved in property development but they said ‘No’ because of his disabilities. About two or three years ago, he was invited to join his former partners in an office development at North Ryde but lacked the confidence to be involved both in terms of financial commitment and also his time.
17. Mr Bonvino said he currently derives a small income – about $20,000 a year – from money borrowed against his house (about $900,000) which he has invested with the Residential Housing Corporation which, in turn, lends money for short‑term finance. The differential between the interest on the money borrowed and the money loaned provides his income. This does not require any work on his part. If he does need assistance with decision-making, he asks his daughters who are both professionally qualified. Originally, he had the proceeds of sale from his share in his brother’s business to invest plus a small loan secured on his house. Following the failure of the Alexandria project, he now owes more money secured against his house.
18. Mr Bonvino said he cannot do any physical work. Even when working on a computer he gets referred pain and has to stop every 15 to 20 minutes. He has had lower back problems – he has two nearly collapsed discs - for many years which give him shooting pains down his left leg. His neck pain – caused by two discs compressing a nerve - was relieved for six months by cortisone injections from Dr Ball. He is unable to do any physical work. His pain is progressively getting worse. Mr Bonvino said he has physiotherapy, sees a chiropractor and does exercises. He is seeing Dr Morris for his mental state. Mr Bonvino said he gets in “bad moods”, gets depressed, very irritable and has difficulty dealing with people. Both physical and mental problems limit what he can do, but his lack of confidence and difficulty in dealing with issues are the major problem. If he did not have mental problems, he would be able to get involved in property development.
Submissions
19. Mr Colborne, for Mr Bonvino, noted that the relevant assessment period starts on the date that Mr Bonvino lodged his claim – that is, 13 March 2009 - and ends at the date of the Tribunal’s determination (s 19)(9)). The loss of salary or wages or of earnings, referred to in s 24(1)(c), “may be caused by a loss of existing employment or by an inability to obtain new employment”: Banovich v Repatriation Commission (1986) 69 ALR 395, at 402.
20. Mr Colborne said Mr Bonvino could still undertake administrative or clerical work notwithstanding his orthopaedic problems by doing exercises in the morning, taking breaks from the computer every 15 to 20 minutes, and lying down for an hour or so in the middle of the day. Mr Bonvino gave evidence to this effect and Dr Giblin said that Mr Bonvino’s orthopaedic problems would still allow him to work up to 28 hours a week. The main problem stopping him working is his PTSD, as was recognised by Dr Chase. If he was not suffering from mental problems he would still be able to do his previous work, undertaking small property development projects with others.
21. Mr O’Reilly noted that to be qualified for Special Benefit, it is Mr Bonvino’s war-caused incapacity alone that must cause his loss of earnings. Dr Morris saw Mr Bonvino in 2006 and noted that Mr Bonvino complained of severe depression after his business venture losses of 2004/2005 which suggests that it was the failure of the business venture that caused his depression. Mr O’Reilly also contended that Dr Giblin’s and Dr Chase’s evidence indicates that the pathology in Mr Bonvino’s right shoulder, which is not an accepted condition, contributes to his incapacity for work. Mr O’Reilly said property developer work is not just administrative or clerical in nature but includes going to meetings, visiting banks and work sites etc.
22. Mr O’Reilly noted that to be qualified for Special Benefit, Mr Bonvino must also be able to show a loss of earnings as a result of the incapacity during the assessment period. Mr O’Reilly submitted that there is insufficient documentary evidence before the Tribunal to establish this. The evidence is that Mr Bonvino did not work between 2005 and 2009 and there is very little evidence to establish what he earned from property development in the preceding period. Mr O’Reilly, referring to s 24(2)(a)(i) of the Act, contended that Mr Bonvino ceased to engage in work as a property developer when he lost money in the property development venture in Alexandria in 2004/2005, and, referring to s 24(1)(a)(ii), contended that there were other factors that prevented him from engaging in remunerative work .
23. Mr Colborne noted Mr Bonvino’s depression is an accepted condition and what brings on the symptoms is irrelevant. Moreover, Mr Bonvino’s physical limitations are of no relevance to his work as a property developer. Mr Colborne noted that Mr Bonvino gave evidence at the hearing for about an hour and was showing obvious discomfort from sitting through this period and was also getting irritable. Mr Bonvino gave evidence that, during the relevant period, he was invited to join in a property development but declined as a result of his mental condition. He still has money to invest and this is currently invested and generating a small income from the interest differential between the cost of his borrowing and the income derived from on-lending this sum. The only reason he is not working as a property developer is because of his psychiatric condition.
Discussion
24. In the Full Federal Court decision in Flentjar v Repatriation Commission (1997) 48 ALD 1 (Flentjar), at 4-5, Branson J (with whom Beaumont and Merkel JJ agreed) set out the questions that the Tribunal must consider in a case such as this:
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 answers 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?
25. In the Full Federal Court decision in Repatriation Commission v Hendy (2002) 76 ALD 47, at 54-55, the Court said:
… The language of s 24(1)(c) of the Act directs attention to the question of whether incapacity from the relevant condition alone prevents a veteran from continuing to undertake remunerative work. The provision does not contemplate that other factors are only to be taken into account if they, of themselves, prevent the veteran from working. 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. So long as the tribunal performs this exercise, the conclusions drawn from the assignment of the relative impact the various factors have on the ability of the veteran to continue in remunerative work is not reviewable, except in exceptional circumstances. Moreover, having considered any or all of the factors which may have contributed to a veteran's incapacity, the tribunal is then required to determine whether it is the veteran's war-caused injury or war-caused disease, or both, alone which prevent the veteran from continuing to undertake remunerative work. …
26. The Commission contends that Mr Bonvino is not prevented from undertaking remunerative work on account of his accepted disabilities alone and does not, therefore, satisfy s 24(1)(c). It also contends there is insufficient evidence to establish that Mr Bonvino has suffered a resultant loss of earnings.
27. Addressing the first of the questions identified in Flentjar, the Tribunal finds, relying on Mr Bonvino’s evidence, that the remunerative work that he was undertaking was that of a property developer. He undertook such work with the Development Group between the late 90s and 2003, when he undertook another property development project in Alexandria which he said “went belly up”. He attributed his poor decision-making, failure to protect his position and lack of confidence in himself to his mental condition. In his statement dated 16 December 2010, Mr Bonvino said the project “fell apart in 2004 due to my mental state. During this time I was having anxiety attacks and suffering from depression and could not think clearly to make correct decisions.”
28. With regard to the second question, whether his accepted disabilities prevent him from continuing to undertake such work, Mr Bonvino stated that after the failure of the Alexandria project:
Over the next two years I suffered severe depression and anxiety and was not able to deal with any persons or decisions during this time. I spent these 2 years mainly in bed and could not leave my house and I needed my wife to attend to me to help me live.
29. Mr Bonvino said that two or three years ago his former partners (in the Development Group) invited him to participate in an office development project at North Ryde. He declined because he lacked the confidence to be involved and preferred to invest the money borrowed against his house in a loan to the Residential Housing Corporation, which provides him with a small income. Mr Bonvino also said he had tried to find work with some people he knows who are involved in property development but they declined to employ him because of his disabilities. Mr Bonvino provided the Commission with letters from three potential employers dating from February to April 2008 stating that due to his back pain and PTSD he would be unsuitable for their positions.
30. The Tribunal is satisfied from this evidence that Mr Bonvino’s accepted disabilities prevent him from continuing to undertake the property development work in which he was previously engaged.
31. The third question the Tribunal must consider is whether Mr Bonvino’s accepted disabilities alone prevent him from undertaking property development work. The Tribunal is satisfied from the evidence that it is Mr Bonvino’s psychiatric conditions – his accepted PTSD and depressive disorder - alone that prevent him from undertaking property development work. We reject Mr O’Reilly’s submission that Mr Bonvino’s non-accepted right shoulder condition is also a factor. Dr Giblin’s evidence is that the nerve root entrapment in Mr Bonvino’s cervical foramina is the predominant cause of the pain in his right shoulder and arm, thereby not excluding the possibility of a contribution from the osteoarthritis affecting Mr Bonvino’s right shoulder.
32. However, Dr Chase’s evidence is that it is Mr Bonvino’s PTSD that prevents him undertaking any administrative or clerical work, which supports Mr Bonvino’s evidence about his lack of confidence in making decisions, about his general irritability and difficulty dealing with people, which he said are what prevent him undertaking property development work. In his statement, Mr Bonvino speaks of his still suffering from depression (an accepted condition) and of his continuing to be treated by Dr Morris for his PTSD. Dr Morris told the Tribunal that although there was a gap of nearly four years, between 31 December 2006 and 13 August 2010, in his treating Mr Bonvino, his condition has remained much the same. Dr Morris said the opinion he expressed in his report of 6 March 2006 that Mr Bonvino’s psychiatric conditions precluded him from working more than eight hours a week remains unchanged.
33. The fourth and final question that the Tribunal must consider is whether by reason of being prevented from undertaking his property development work Mr Bonvino is suffering a loss of earnings. Mr O’Reilly contended that there is inadequate documentary evidence to establish such a loss. The Tribunal notes that the nature of being involved with others in a property development is that the partners in the development are recompensed by sharing in the profits of the venture on its completion. Mr Bonvino’s evidence indicates that his participating in developments with the Development Group led to such distributions on the completion of a project. While the Tribunal has no specific documentary evidence to establish Mr Bonvino’s earnings from particular developments with this Group, we consider it reasonable to assume that Mr Bonvino derived earnings from such developments to make his participation worthwhile
34. Mr Bonvino has provided the Tribunal with a copy of reports to ASIC (the Australian Securities and Investments Commission) dated 4 January 2005 and 13 March 2006) on two of his companies showing significant losses. Mr Bonvino said in his statement that these companies were involved in financing the property development in which he invested at Alexandria, which ultimately failed. He has also provided tax returns for two companies for 2009 showing significant losses.
35. Mr Bonvino said he is currently deriving an income of about $20,000 a year from money borrowed against his house which he on-lends to the Residential Development Corporation for short term loans, his income being the difference between the cost of his borrowing and the earnings from on-lending this money at a higher interest rate. As noted above, he said he was approached to participate in an office development project at North Ryde two or three years ago but declined because of his lack of confidence in his ability to participate.
36. The Tribunal is reasonably satisfied from the above evidence that Mr Bonvino is suffering and has, since 13 March 2009, suffered a loss of earnings due to his being prevented from continuing to undertake property development work. Thus, we conclude that Mr Bonvino satisfies s 24(1)(c) of the Act and is, as a result, eligible for payment of pension at the Special Rate.
Decision
37. That part of the decision under review dealing with the rate at which disability pension is paid to Mr Bonvino is set aside and a decision substituted that Mr Bonvino is eligible for payment of the pension at the Special Rate.
I certify that the 37 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R P Handley, Deputy President and Air-Vice Marshal (Dr) T K Austin AM, Member.
Signed: .............[sgd].................................................................
A. Veness, AssociateDates of Hearing 16 and 17 May 2011
Date of Decision 26 May 2011
Counsel for the Applicant C Colborne
Solicitor for the Applicant KCI LawyersSolicitor for the Respondent T O'Reilly, Department of Veterans' Affairs Advocacy Section
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