Bridges and Repatriaiton Commission
[2008] AATA 721
•18 August 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 721
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q 2006/802
VETERANS' APPEALS DIVISION ) Re TERENCE BRIDGES Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal M J Carstairs, Senior Member Date18 August 2008
PlaceBrisbane (Heard in Townsville)
Decision The Tribunal affirms the decision under review.
....................[sgd]..........................
SENIOR MEMBER
VETERANS’ AFFAIRS – benefits and entitlements – special and intermediate rates of pension – remunerative work – whether prevented from continuing remunerative work – Tribunal affirmed decision under review
Veterans’ Entitlements Act 1986 (Cth), ss 19, 23, 24, 28
Forbes v Repatriation Commission (2000) 171 ALR 131
Flentjar v Repatriation Commission (1997) 48 ALD 1
Repatriation Commission v Smith (1987) 15 FCR 327
Peacock v Repatriation Commission [2004] 40 AAR 143REASONS FOR DECISION
18 August 2008 M J Carstairs, Senior Member 1. In January 2005, just prior to turning 60, Terence Bridges wound up his business, “Bridges Handyman Service”, which he operated on Magnetic Island as a sole trader. Mr Bridges now claims that he is entitled to a higher rate of pension because he ceased business due to the effects of war-caused injury.
2. The preceding year had been a difficult one for Mr Bridges. He had serious health issues, precipitated when his doctor had taken a skin scraping from his left heel for testing in February 2004. This otherwise straightforward procedure had resulted in Mr Bridges suffering a severe attack of cellulitis, which is an acute infection of skin and soft tissues. His cellulitis affected his left leg from the ankle to the groin. Mr Bridges was hospitalised for 11 days and his recovery took many months. Throughout 2004, his capacity to work was significantly reduced and his business suffered. Part way through the year he decided to seek financial advice and this led to him winding up the business in December 2004.
3. About July 2004, Mr Bridges had claimed on the respondent to have cellulitis accepted for pension, on the basis that cellulitis was related to his already accepted condition of tinea, or treatment of tinea. A Veterans' Review Board decision, accepting that connection, determined that cellulitis was related to Mr Bridges’ war service. This meant that Mr Bridges’ pension rate was reassessed and at 70% of the general rate of pension he was entitled to be considered for one of the earnings-related pensions, available where war-caused injury results in a loss of capacity to work. Relevantly, these are the “special “and “intermediate” rates of pension.
ISSUE
4. The issue that I must decide is whether Mr Bridges is entitled to either of these earnings-related pensions.
5. As Mr Bridges’ case had been articulated in his Statement of Facts and Contentions[1], he was seeking special rate. It became evident at the hearing that both payments – special and intermediate rate – were in issue.
[1] Exhibit A2.
BACKGROUND
6. I take Mr Bridges work history largely from his written statement[2] and from his oral evidence. As these matters were not in dispute, it is convenient that I summarise them here.
[2] Exhibit A1.
7. Mr Bridges completed his schooling to grade 12, after which he was apprenticed for 5 years as an electrician, deferring his National Service until he finished his apprenticeship. He served in the Australian Army, including a year in Vietnam. After leaving the Army, for the greater part of his working life Mr Bridges undertook electrical work in the construction industry, working for companies in Australia and Papua New Guinea. In 1993 he moved to Magnetic Island, near Townsville, but he continued working and travelling to mine sites and gas fields in Western Australia, South Australia, and Papua New Guinea.
8. In 1999 Mr Bridges started Bridges Handyman Service which specialised in small building projects, and house maintenance. He had a number of regular contracts with real estate agents on Magnetic Island, but undertook private clients as well. Mr Bridges’ business was successful and busy; his skills were in demand; and he was regularly working a 6 day, 60 hour week. That is, until his bout of cellulitis in 2004.
9. After that, Mr Bridges was unable to resume work for some time. When he was discharged from hospital he needed to use crutches for eight weeks and was only able to recommence work towards the end of July 2004, and then only on a part-time basis. He estimated that during the second half of 2004 he was working somewhere between 18 and 20 hours per week. He ceased working for private clients and limited himself to his existing contracts with real estate agents, which he could carry out in 18 hours per week.
10. When he had returned to work, Mr Bridges used a compression bandage to control the swelling in his left leg, which was worse when he moved about. He found it hard to work in a tropical climate wearing a compression bandage. In other respects too, this sort of work was difficult to manage with his leg problem. He had trouble ascending and descending ladders, crouching, getting into and out of vehicles, and shifting his equipment. He said that his ankle was sore and he was troubled by numbness in his foot and felt unsteady.
11. Mr Bridges stated that he had intended to work until age 65[3], but realised that he would not be able to make it, in view of the problems he was having with his leg. He was aware that he would be eligible for age service pension when he turned 60, and, accordingly, he applied for that pension in December 2004, just short of his 60th birthday. He had sought financial advice in July 2004 about retiring.
[3] Exhibit A2 at [8].
12. With that brief summary in mind, I now turn to a consideration of Mr Bridges’ possible entitlements. I firstly observe that the sections of the Veterans’ Entitlements Act 1986 (the Act) dealing with intermediate and special rates of pension (s 23 and s 24 of the Act respectively) are expressed in similar language and share certain definition and tests. The chief difference between the qualifying provisions in s 23 and s 24 of the Act is that special rate is payable only to those who can work less than 8 hours per week. Intermediate rate is payable to those who are limited to work that is undertaken “on a part-time basis or intermittently” (terms also defined in the Act).
13. The two payments are similar in requiring that entitlement to them falls to be determined within what is referred to in the Act as the “assessment period” (a period commencing at the date of claim and ending at the date of the final determination of the matter). At the start of the assessment period (July 2004), Mr Bridges was 59 years of age; he is now 63.
SPECIAL RATE
14. Without setting out the full detail of s 24 of the Act, it is sufficient to note that it requires the veteran to satisfy a number of matters, all within the assessment period. An important requirement at s 24(1)(b) of the Act, is that the veteran be “totally and permanently incapacitated”. This means[4]:
…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;
[4] Veterans’ Entitlements Act 1986 (Cth), s 24(1)(b).
15. I am not satisfied that Mr Bridges is totally and permanently incapacitated to that degree.
16. With reference to that question, Dr I Fraser, general practitioner, had written in 2005[5], after describing Mr Bridges’ critical incident with cellulitis:
He is now left with a leg which is permanently swollen and requires a compression stocking to below the knee. He has an area of numbness affecting half his foot…because of the numbness, pain in the ankle and permanent swelling, he has had to give up his previous employment
.
[5] Folio 137; T21.
17. The evident generality of these remarks in Dr Fraser’s statement troubled the Veterans' Review Board. My reaction to them was the same. I agree with the Veterans' Review Board, that Dr Fraser’s observation falls short of stating that Mr Bridges is incapacitated to the level required by s 24(1)(b) of the Act.
18. I would also observe that the expression “remunerative work” in s 24(1)(b) has to be read with s 28 of the Act. Section 28 provides for a test of some subtlety, entailing a consideration of the person’s skills and experience, and of what a person with those skills might reasonably undertake. That question is not answered by the bald assertion in Dr Fraser’s statement that Mr Bridges “had to give up his previous employment”.
19. Dr Fraser's oral evidence did not serve to clarify his views concerning Mr Bridges’ work capacity during the assessment period. I thought it necessary to ask Dr Fraser to address more directly the tests referable to Mr Bridges’ capacity to work. The questions referred to Dr Fraser after the hearing included the following:
§ whether at the end of 2004 Mr Bridges was able to work 20 hours per week in remunerative work; and
§ whether at the end of 2004 Mr Bridges was able to work eight hours per week in remunerative work.
20. Dr Fraser's response was as follows:
In answer to your specific question, at the end of 2004 Mr Bridges was unable to work even eight hours a week in any remunerative employment due to the conditions recognised by the Department of Veterans’ Affairs and those conditions only.
21. General practitioners are often understandably brief in their remarks and Mr Honchin, counsel for Mr Bridges, submitted that a detailed medical report ought not to be expected. However, the difficulty with Dr Fraser’s response is not its economy of expression so much as its failure to address matters that I would expect Dr Fraser would have known (including that Mr Bridges was still working more than eight hours per week at the end of 2004). It will be recalled that Mr Bridges was able to return to part-time work of some 18-20 hours per week in the second half of 2004. Mr Bridges acknowledged in his oral evidence that the business was still operating when he claimed service pension in December 2004. It was true that Mr Bridges was operating the business for considerably less hours than he had previously, but it certainly was not as little as 8 hours per week. I would also note in passing that Dr Fraser’s clinical notes[6] reveal that towards the end of 2004, Mr Bridges was suffering with a hernia.
[6] Exhibit R5.
22. The clinical notes at 27 October 2004 also refer to a report from Dr J Hack, reporting on the likely hernia:
He seems to have got rid of his previous symptoms of unwellness and is feeling much better. He now says he has a right inguinal hernia…with local pain and discomfort…
23. The hernia ruptured in December 2004, and was surgically repaired without apparent complication. Dr Fraser makes no mention of the impact of this or any other non war-caused condition on Mr Bridges’ capacity to work in the latter part of the year.
24. It needs to be born in mind that Mr Bridges’ assessment period commences in July 2004. The evidence shows, contrary to Dr Fraser’s opinion, that Mr Bridges was able to work more than 8 hours per week from that time. Whilst it is quite possible for a veteran who is unable to satisfy the work test in s 24(1)(b) of the Act at the start of the assessment period, he may later qualify. In other words, it might have been that Mr Bridges’ accepted war-caused conditions deteriorated later in the assessment period so that he was able to satisfy the test. However that was not the evidence, or the case, as presented to me.
25. Accordingly, I was satisfied that Mr Bridges does not qualify for special rate of pension because the evidence does not indicate that in the assessment period he was totally and permanently incapacitated for work within the meaning of s 24(1)(b) of the Act.
ISSUE 2: INTERMEDIATE RATE
26. In contrast to the provisions for special rate which require a person to be totally incapacitated for work, the provisions for intermediate rate, found at s 23 of the Act, address the circumstances where a veteran is unable to work other than “part-time” or “intermittently”.
27. This “capacity to work” test, set out at s 23(1)(b) of the Act and read with s 23(2), provides that to qualify a veteran must be unable to work other than part-time or intermittently. This means unable to work 50 per cent of the full-time hours ordinarily worked by persons in the veteran’s occupation, or, if that measure is inappropriate, more than 20 hours per week. On that aspect of the test I was comfortably satisfied that the evidence showed that Mr Bridges could satisfy the requirement is s 23(1)(b) of the Act from the start of the assessment period.
28. However, it is with respect to the next qualifying provision for intermediate rate of pension that I consider that Mr Bridges’ claim fails; namely at the test provided for in s 23(1)(c) of the Act. That section provides, firstly, that a veteran, by reason of incapacity from war-caused disease or injury alone must be prevented from “continuing to undertake remunerative work that the veteran was undertaking” and, secondly, that this incapacity has led to “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 from that incapacity”.
29. The two stage nature of the test was referred to in Forbes v Repatriation Commission[7], as was the application of the tests through their further references in other subsections. In that regard, s 23 must be read subject to the application of s 23(3)(a) and (b) of the Act. In Mr Bridges case, no matters arise with respect to s 23(3)(b) of the Act. However they do with respect to s 23(3)(a), and I will return to this aspect.
[7] (2000) 171 ALR 131.
30. Decision makers have come to examine the tests provided with respect to s 23(1)(c) of the Act by considering the evidence in accordance with a 4-step analysis, now referred to as the Flentjar questions, and set out in the Full Federal Court decision in Flentjarv Repatriation Commission[8] (a case which dealt with the similarly worded provision in s 24(1)(c) of the Act).
[8] (1997) 48 ALD 1.
31. The Federal Court, per Stone J, said in that case that s 24(1)(c) posed the following questions :
1. What was the relevant "remunerative work that the veteran was undertaking"…?
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?
32. I will now consider Mr Bridges matter by examining his facts and applying those four questions to them.
The first Flentjar question
33. “Remunerative work” in s 23(1)(c) refers to the kind of work undertaken and not a particular job. I would characterise the remunerative work that Mr Bridges was undertaking as both skilled and semi-skilled, but in each case, largely physical work. The skilled work was reflected in his long career and training as an electrician in heavy construction industries which he carried out until 1999. The semi-skilled was reflected in his handyman/builder business, from 1999 until 2005. Mr Bridges evidence, which I accept, was that his electrical skills and licences related to work in heavy construction industries and as an electrical supervisor at construction and mining sites. He was not trained in light electrical work, so that was not part of his profile of remunerative work.
34. I note that there was no evidence to suggest that there was any connection between his war-caused disabilities and his ceasing work in the heavy electrical construction field.
The second Flentjar question
35. The second question looks at whether Mr Bridges was prevented from continuing to undertake his kind(s) of remunerative work. The evidence does suggest that Mr Bridges was prevented from continuing to undertake such work. What we see in Mr Bridges’ case, from a purely common-sense perspective, is a man who has worked all his life, and who had a career change when he starts his own business at the age of fifty four. The business proves to be very successful. I have no reason to doubt that Mr Bridges had every intention of carrying on that business while ever he could do so, including to age-65. The evidence, which I accept, is that the cellulitis was an unexpected and seriously disabling event in his life. Mr Bridges observed that at other times when he had injuries he was always able to return to work, citing the instance where after a right knee injury he resumed full-time work. Dr Fraser observed that Mr Bridges recovery process from the cellulitis was slow and he did not think he made as good a recovery as younger man. Mr Bridges says that the sole reason for his not working in his remunerative work now (and in the assessment period) was as a result of the cellulitis.
36. Section 23 (1)(c) of the Act requires that Mr Bridges show that he was prevented from continuing to undertake remunerative work. Whilst the matter is not without some doubt, in view of his being able to resume his remunerative work on a part time basis in the second half of 2004, I was reasonably satisfied that in Mr Bridges’ case the evidence allows it to be said that war-caused injury or disease prevented him from continuing to undertake the remunerative work that he was undertaking. I shall not restate that evidence here, it being sufficiently set out above with respect to discussion of special rate of pension.
37. I accept that the business was thriving before the onset of cellulitis and after it he could only manage part-time work, and ultimately the business had to be closed. There is no suggestion that Mr Bridges did not make sincere efforts to resume work and it needs to be borne in mind, once again, that Mr Bridges’ kinds of remunerative work were physically taxing. Foot, ankle, and leg problems are major obstacles for those undertaking active physical work. Mr Bridges observed that his work required him to be on his feet all day; there were really no parts of the job that could be carried out sitting down. I also note his evidence that he was not trained or skilled in light electrical work that might have been carried out while seated.
38. I would answer the second Flentjar question “yes”.
The third Flentjar question
39. This question addresses whether the war-caused injury is the only factor preventing Mr Bridges continuing to undertake remunerative work. The medical evidence does not allow that question to be answered favourably to Mr Bridges.
40. The medical evidence indicates that what was preventing Mr Bridges from continuing to undertake remunerative work was more than merely his war-caused disabilities. In that regard the evidence of Dr G Siller, dermatologist, is critical, particularly with reference to Mr Bridges’ non-accepted condition of varicose veins.
41. There was evidence, even prior to Dr Siller’s report in 2007, to the effect that Mr Bridges problems with his left leg were a complex interaction between the episode of cellulitis and Mr Bridges severe varicose veins, evident on both legs. This interaction led to Mr Bridges having ongoing problems with swelling in the left leg, rather than this clearing up as expected. Dr F Quigley, vascular surgeon, had reported in 2005 that Mr Bridges’ swelling was severe and poorly controlled, due in large part to the tissue and lymph damage Mr Bridges suffered in the acute episode of cellulitis[9] in the context of insufficiency of blood supply due to the damaged veins.
[9] Folio 134-145; T22.
42. Dr Siller examined Mr Bridges in 2007 and prepared a report which noted Mr Bridges’ history of cellulitis. However, Dr Siller noted also that Mr Bridges had very severe varicose veins in both legs, more prominent in the left leg. Dr Siller considered that the main cause of Mr Bridges swelling was cellulitis, but the major reason for the swelling was the presence of varicose veins. Dr Siller’s oral evidence was generally confirmed that the main disease process in the left leg was as a result of the cellulitis damaging circulation, particularly lymphatic circulation.
43. Mr Bridges maintains that his varicose veins have never interfered with his ability to work, and he maintains that they do not account for his inability to continue in remunerative work. Some support is lent by Dr Fraser in that regard, as he said that he has never treated Mr Bridges for varicose veins.
44. However the vascular surgeon takes rather a different view of things. Dr Siller stated in his report that the main factor causing swelling “has been the presence of very severe bilateral varicose veins”. His opinion was that there was only a minor contribution from the cellulitis, in the context of other factors in the leg. Furthermore Dr Siller observed that there was little restriction in mobility when he examined Mr Bridges and he concluded that there would be “no effect on the applicant’s capacity to undertake remunerative work…from the past episode of cellulitis”.
45. I accept the evidence of Dr Siller. He had access to all the relevant medical reports, and is a specialist in his field. His opinion leads inescapably to the conclusion that there are factors other than war-caused disability that prevent Mr Bridges continuing to undertake his remunerative work, including severe varicose veins affecting both legs.
The fourth Flentjar question
46. Whilst it is not strictly necessary to decide the fourth question, I would briefly observe that I was reasonably satisfied that this question ought to be answered adversely to Mr Bridges. It was observed by the Court in Repatriation Commission v Smith[10] what is at issue is what the veteran probably would have done if he had none of his war-caused disabilities. As observed by Dowsett J in Peacock v Repatriation Commission[11] this will require a careful analysis of particular facts.
[10] (1987) 15 FCR 327.
[11] [2004] 40 AAR 143.
47. It is true here that Mr Bridges had a critical health incident when he suffered the cellulitis. However the evidence shows that he made a recovery sufficient to resume his work part-time. He also acknowledges his awareness of service pension entitlements that would be available to him as soon as he turned 60 in January 2005. He sought financial assistance in the middle of 2004. He indicated in his evidence that he started to focus on his eligibility for service pension. I note that Mr Bridges marked his claim for service pension as being based on grounds of age rather than invalidity[12], a small point perhaps, but one I regard as indicative of his thinking at the time. When he filled out the claim, his business was still operating. I note also that the day he suffered a ruptured hernia was the day the business was wound up.
[12] Exhibit R4.
48. Section 23(3)(a) of the Act provides that a veteran who is incapacitated by reason of war-caused injury will not be suffering the loss referred to in the 4th Flentjar question if there are other reasons for ceasing or no longer engaging in remunerative work. In Mr Bridges’ case I was satisfied that the other reasons were a mix of non-accepted medical conditions, including varicose veins and ruptured hernia, combined with the availability of service pension to him, at a time when for a number of medical reason he simply was unable to carry on.
49. Mr Bridges did not qualify for intermediate rate of pension in the assessment period as he cannot satisfy s 23(1)(c) of the Act.
DECISION
50. The Tribunal affirms the decision under review.
I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of M J Carstairs, Senior Member
Signed: .............................[sgd]........................................................
Joan Torbey, AssociateDate of Hearing 10 March 2008
Date of Last Written Submissions 6 June 2008
Date of Decision 18 August 2008
Counsel for the Applicant Mr D Honchin
Solicitor for the Applicant Purcell Taylor Lawyers
Advocate for the Respondent Mr J Stoner, Department of Veterans’ Affairs
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