Brydon and Repatriation Commission - [2001] AATA 530

DECISION AND REASONS FOR DECISION [2001] AATA 530

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q1998/404

VETERANS' APPEALS DIVISION       )
           Re      WILLIAM JOSEPH BRYDON
  Applicant
           And    REPATRIATION COMMISSION
  Respondent

DECISION

Tribunal Mr. K.L. Beddoe, Senior Member Brigadier I.R.W. Brumfield, CBE DSO RL, Member Mr. I.R. Way, Member

Date14 June 2001
PlaceBrisbane

Decision      The Tribunal affirms the decision under review.
  (Sgd) K L Beddoe
  Senior Member

Decision No: 530/2001

CATCHWORDS
VETERANS' AFFAIRS – disability pension – shareholder and director in family company – whether employment ceased remunerative employment because of war-caused injury or disease alone – whether continuous period of employment of 10 years satisfied
Veterans' Entitlements Act 1986: s 24

REASONS FOR DECISION

14 June 2001 Mr. K.L. Beddoe, Senior Member Brigadier I.R.W. Brumfield, CBE DSO RL, Member Mr. I.R. Way, Member

By a decision notified on 17 November 1995 a delegate of the respondent determined that the condition of Post Traumatic Stress Disorder be accepted as a war-caused disability with effect from 10 April 1995. The delegate also decided that disability pension be increased to 80% of the General Rate from 10 April 1995.
The applicant applied for review by the Veterans' Review Board ("VRB"). The respondent conducted a review pursuant to section 31 of the Veterans' Entitlements Act 1986 ("the Act"). That resulted in an increase in the pension to 100% of the General Rate with effect from 13 April 1995.
By a decision dated 3 March 1998 but notified on 17 March 1998 the VRB decided to affirm the section 31 review decision. By an application lodged in this Tribunal on 12 May 1998 the applicant sought review in this Tribunal.
Section 24 of the Act provides for payment of pension under Part II of the Act at the Special Rate. Section 24(2A) is the relevant provision, the applicant not being a veteran who had not yet turned 65 years when the application for increase in pension was made (s.24(1)(aab)).
The subsection relevantly provides that section 24 applies to a veteran if:
(a)….; and
(b)the veteran had turned 65 before the application was made; and
(c)paragraphs 24(1)(a) and 24(1)(b) apply to the veteran; and
(d)the veteran is, because of war-caused injury or war-caused disease or both, alone, prevented from continuing to undertake the remunerative work ("last paid work") that the veteran was last undertaking before he made the application; and
(e)because the veteran is so prevented from undertaking his last paid work, the veteran is suffering a loss of salary or wages, or of earnings on his own account that he would not be suffering if he were free from that incapacity; and
(f)the veteran was undertaking his last paid work after the veteran had turned 65; and
(g)when the veteran stopped undertaking his last paid work, the veteran:
(i)if he was then working as an employee of another person – had been working for that person, or, for that person and that persons predecessors, or
(ii)if he was then working on his own account….
for a continuous period of at least 10 years that began before the veteran turned 65 and
(h) ….
Paragraph 24(1)(b) provides that section 24 applies to the veteran if 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 eight hours per week. Section 28 provides that in considering whether paragraph 24(1)(b) applies the Commission shall have regard to the following matters only:
(a)The vocational, trade and professional skills, qualifications and experience of the veteran;
(b)The kinds of remunerative work which a person with the skills, qualifications and experience referred to in paragraph (a) might reasonably undertake; and
(c)The degree to which the physical or mental impairment of the veteran as a result of the injury or disease, or both, has reduced his capacity to undertake the kinds of remunerative work referred to in paragraph (b).
At the hearing Mr. O'Gorman appeared for the applicant and Miss Henderson appeared for the respondent. The documents lodged in the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were put before the Tribunal as the T documents and further documents were tendered and marked as exhibits. Oral evidence was given by the applicant and three other witnesses.
We make the following findings of fact. The applicant was born on 24 September 1929 and was 65 years 9 months at the date of the application for increase in pension (10 July 1995).
The following medical conditions have been accepted as war-caused:
(a)Sensori-neural deafness;
(b)Tension headaches;
(c)Lumbar spondylosis with intervertebral disc degeneration; and
(d)Post Traumatic Stress Disorder.
The applicant retired as a Lieutenant Colonel from the Army in 1973 after 22 years service including service in Korea, what is now Malaysia and South Vietnam. He then undertook employment as manager of two clubs from November 1973 to December 1986.
The applicant resigned from the second position to go into business with his wife. While the applicant said he went into partnership with his wife we are satisfied and find that the business was conducted by a company, Purdel Pty Ltd. The two shares in the company were acquired by the applicant and his wife on 16 December 1986 and they became the directors of the company.
The company acquired the Queensland franchise for a picture framing system. The company purchased the franchise in December 1986 and commenced trading as Framing Corner (Queensland) on 26 July 1987 from premises at Toowong. Since then the company has carried on the business of Framing Corner (Queensland) from various premises, the last being at Hamilton.
The day to day business activities of the company were conducted from the various retail premises by the applicant and his wife until August 1995 when the applicant ceased participation in retail selling because he found dealing with the customers difficult. He ceased being remunerated by the company at this time but he did not cease working for the business in activities other than shop front activity.
The nature of the company's business changed in 1993 when it sold the Queensland franchise for Framing Corner and became itself a franchisee of the purchaser. The company entered into a further agreement that it would provide advisory and training services to the franchisor in consideration for not paying the monthly franchise fee. The company provided those services through the applicant and his wife, and those services were remunerated by the company not being required to pay its monthly fee to the franchisor.
On the application for increase in pension lodged with the Department of Veterans' Affairs on 10 July 1995 the applicant answered a number of questions about employment history. Question 12 was "Have the disabilities you are claiming affected your employment at any time?". The applicant answered in the affirmative and provided the following explanation:
"Left Macquarie early retirement – Pressure of position – now only doing two days weekly – Pressure – ".

The applicant agreed in response to a question that he had provided that answer. We understood "Macquarie" to be the second of the two clubs that employed the applicant after his discharge from the Army.

In his oral evidence, the applicant drew a distinction between his stopping work in the shop and not stopping work in the business. He ceased working in the shop in July/August 1995. It is clear from the applicant's own evidence that the company ceased paying remuneration in July/August 1995. However, he continued to perform the training and advisory services on behalf of the company for the franchisor. He also continued to give what might be called back room assistance in the company's business, including doing the books and driving the van to pick up supplies. These activities kept the applicant occupied up to three days per week.
On 26 January 2000 the applicant suffered an ischaemic heart attack and he has not been back to the business since. The business has been transferred to the applicant's daughter but we do not know whether this was by way of transfer of shares in the company or transfer of the company's business.
In May 1997 the applicant lodged a claim for service pension. In response to a question "Are you presently employed?", he answered in the negative and explained that he had retired in August 1995. He denied having investments other than superannuation but gave an affirmative answer to having an interest in a business. The claim was supported by an employment report signed by the applicant in which he said he had been employed from December 1986 to August 1995 at an average gross weekly wage of $300 per week by the company. The report is dated 6 June 1997.
A detailed claim for service pension signed by the applicant on 22 May 1997 declares that the applicant ceased work in August 1995 and denied involvement in a business.
Before us the applicant was ambivalent as to his circumstances from August 1995. He agreed that he told the delegate that he had not worked since July 1995 and ceased drawing a salary from that time. He also agreed with a comment by Dr. Holm, treating psychiatrist, in a report dated 14 June 1996, to the effect that over the previous two years he had been progressively moving out of the business to the point where he was working part-time. At this stage he was doing the financial management of the business until he handed that over to his daughter effectively ending all involvement in the business.
In his oral evidence and Exhibit A the applicant says that he resumed involvement in the business towards the end of 1996 but as Exhibit 5 shows, he was not remunerated by the company, preferring to rely on drawings from his shareholder'' loan account. We were told that the company had a cash flow problem and, it seems, could not afford to pay remuneration to the applicant. We are unable to reconcile that with the fact of the applicant's drawings for the year ended 30 June 1996 totalling $47,237.50 and year ended 30 June 1997 totalling $9,951 (Exhibit 5).
Mr. O'Gorman made detailed written submissions. He defined the issue as to whether the applicant had satisfied the ten year rule in paragraph (g) of sub-section 24(2A) of the Act. We should say, at the outset, that the evidence is overwhelming against a finding that the applicant was working on his own account. He was a shareholder, director and employee of the company and it was the company that carried on the business. We have dealt with the matter on that basis.
The applicant's submission in essence is that the applicant commenced his involvement in the business in July 1987 when the company commenced trading and that involvement remained active until at least August 1997. The submission concedes the reduction in involvement from August 1995 but contends there was a continuing active involvement until at least August 1997.
CONSIDERATION
We are required to decide this matter to our reasonable satisfaction.
In doing so, we have taken time to give careful consideration to the material before us. As we have noted there is factual conflict in the applicant's own material. In particular, his representations to the Department of Veterans' Affairs in 1997 in relation to the claim for service pension should not be discounted as to the weight to be given to them. They are consistent with the undisputed fact that the applicant ceased to be paid as an employee in August 1995.
We acknowledge and find that the applicant had a continuing involvement in the business. Whether this continuing involvement was such as to disqualify the applicant under paragraph 24(1)(b) of the Act is something we do not need to decide.
If that level of involvement could be accepted as being paid work then the applicant must fail because he ceased that involvement in January 2000 because of a non-accepted disability. Paragraph 24(2A)(d) cannot be satisfied on this basis.
We are also satisfied, on the balance of probabilities, that the applicant ceased paid work in August 1995 or soon thereafter so that we cannot be satisfied that the applicant had been working for the company for a continuous period of ten years when he ceased his last paid work. In that regard we are not satisfied that drawings by a shareholder, from the shareholders loan account, can be characterised as payment for work.
The decision under review will be affirmed.
I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Mr. K.L. Beddoe, Senior Member; Brigadier I.R.W. Brumfield, CBE DSO RL, Member and Mr. I.R. Way, Member
Signed:         .....................................................................................
  Associate
Date/s of Hearing  2 March 2001
Date of Decision  14 June 2001
Counsel for the Applicant        Mr. D. O'Gorman
Solicitor for the Applicant         Streeting Haney
Respondent  Miss Henderson, departmental advocate