Brydon v Repatriation Commission
[2003] FMCA 299
•17 July 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BRYDON v REPATRIATION COMMISSION | [2003] FMCA 299 |
| ADMINISTRATIVE LAW – AAT appeal against Veterans Review Board decision which decided that the applicant was not entitled to a special rate pension under the Veterans Entitlement Act 1986 – application dismissed – findings made by the Tribunal was open to it – no error of law on the part of the Tribunal in its decision making. |
Veterans Entitlement Act 1986
Administrative Appeals Tribunal Act 1975
Australian Broadcasting Tribunal & Bond (1990) 170CLR 321 at 356
Repatriation Commission v Buckingham (Federal Court of Australia, 7 February 1996)
Hill v Repatriation Commission (2000) FCA 929
Counsel v Repatriation Commission (2001) FCA 1032 (1 August 2001)
Re King & Repatriation Commission (1991) 22 ALD 638
Re Clare & Repatriation Commission (1989) 18 ALD 474
Rogers v. State Mines Control Authority (1964) 81 WN (pt2) NSW 120 at 123
Counsel v. Repatriation Commission (2001) FCA 1032
| Applicant: | WILLIAM JOSEPH BRYDON |
| Respondent: | REPATRIATION COMMISSION |
| File No: | BZ385 of 2001 |
| Delivered on: | 17 July 2003 |
| Delivered at: | Brisbane |
| Hearing date: | 6 December 2001 |
| Judgment of: | Baumann FM |
REPRESENTATION
| Counsel for the Applicant: | Mr D. O’Gorman |
| Solicitors for the Applicant: | Streeting & Haney |
| Counsel for the Respondent: | R.M. Henderson |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
Application is dismissed.
Application to pay the Respondent’s costs of and incidental to these proceedings fixed in the sum of $3,000.00.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BZ385 of 2001
| WILLIAM JOSEPH BRYDON |
Applicant
And
| REPATRIATION COMMISSION |
Respondent
REASONS FOR JUDGMENT
Introduction
WILLIAM JOSEPH BRYDON (“the Applicant”) by Notice of Appeal dated 5 July 2001, seeks to set aside a decision of the Administrative Appeals Tribunal given 14 June 2001 (“the Decision”). The Appeal is opposed by the REPATRIATION COMMISSION (“the Respondent”). The decision effectively affirmed an earlier decision made on 3 March 1998 by the Veterans’ Review Board which decided that the applicant was not entitled to a special rate pension under the Veteran’s Entitlement Act 1986 (“VE Act”).
The decision
The Tribunal, constituted by Mr K.L. Beddoe (Senior Member), Brigadier I.R.W. Brumfield (Member) and Mr I.R. Way (Member), published reasons which were before me at pages 181–189 of the Appeal Book (“AB”).
Grounds of appeal
The Notice of Appeal sets out the following grounds of Appeal:
“4(a) That the tribunal’s Reasons for Decision did not properly and /or adequately include its findings on material questions of fact with sufficient reference to the evidence or other material on which those findings were based;
(b) That the Tribunal erred in concluding that drawings by a shareholder, from a shareholders loan account, cannot be characterised as payment for work;
(c) That the tribunal erred in concluding that the applicant ceased paid work in August 1995 or soon thereafter, and yet also concluded that after August 1995 he continued to perform the training and advisory services on behalf of the company for the franchisor”.
Grounds (b) & (c) above, it is asserted by the Applicant, amount to an error of law as it established a failure by the Tribunal to properly understand the meaning of “paid work” and “working as an employee of another person” as used in s.24 of the VE Act.
Principles on appeal
This is an appeal on a question of law, brought pursuant to s.44 of the Administrative Appeals Tribunal Act 1975. It is worth re-stating that there is no error of law simply in making our error of fact (See Australian Broadcasting Tribunal & Bond (1990) 170CLR 321 at 356.)
The statutory provisions
Section 13 of the Veteran’s Entitlement Act imposes liability on the Commonwealth to pay such pensions to eligible persons. s.14 deals with the making of claims for pensions, while s.15 deals with applications for increases in the rate of pension. s.17 requires the Secretary of the Department of Veterans’ Affairs to investigate claims and applications s.19 requires the Repatriation Commission to determine claims and applications and to assess the rate at which the pension is payable.
The requirements for special rate pensions are conceded to be complex and the current case does not require me to explore all of them. Because the Applicant’s claim lodged on 10 July 1995, was made after he had turned sixty-five, s.24(2A) of VE Act specifies the applicable criteria, as follows:
“(2A) This section applies to a veteran if:
(a)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
(b)The veteran had turned 65 before the claim or applications was made; and
(c)Paragraphs (1)(a) and (1)(b) apply to the veteran; and
(d)The veteran is, because of incapacity from 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 or she made the claim or application; and
(e)Because the veteran is so prevented from undertaking his or her last paid work, the veteran is suffering a loss of salary or wages, or of earnings on his or her own account, that he or she would not be suffering if he or she were free from that incapacity; and
(f)The veteran was undertaking his or her last paid work after the veteran had turned 65; and
(g)When the veteran stopped undertaking his or her last paid work, the veteran:
i)if he or she was then working as an employee of another person-had been working for that person, or for that person and any predecessor or predecessors of that person; or
ii)if he or she was then working on his or her own account in any profession, trade, employment, vocation or calling-had been so working in that profession, trade, employment, vocation or calling;
for a continuous period of at least 10 years that began before the veteran turned 65; and
(h)Section 25 does not apply to the veteran.
It was common ground that the Applicant satisfied s.24(2A)(a),(b),(c) and (f) of the VE Act. Whilst sub-paragraphs (d), (e) and (g) remained to be satisfied, the Tribunal, by finding s.24(2A)(g) had not been, was not required to fully consider (d) and (e).
Issues
It was not in contention that the Tribunal was required to consider whether the various requirements for special rate of pension were satisfied during the period which commenced on 10 July 1995 and ended when it made it’s decision (see s.19(5) and s.19(9) of the VE Act).
Whether or not the Applicant satisfied the requirements of s.24(2A)(d),(e) and (g) inclusive was the focus of evidentiary issues in this case before the Tribunal.
The relevant matters to be determined by the Tribunal when considering sub-paragraph (g) were:
(a)What was the Applicant’s last paid work (s.24(2A)(d)).
(b)Was the notice of that “last paid work” as so defined in s.24(2A)(d) either:
(i)working as an employee of another person (s.24(2A)(g)(I)); or
(ii)working on his own account in any profession, trade, employment, vocation or calling (s.24(2A)(g)(ii)).
(c)If the Applicant was an employee, did he work for his employer in that last paid work for a continuous period of 10 years beginning before the Applicant turned 65 (s.24(2A)(g)).
Factual background
The Applicant retired as a Lieutenant Colonel in the Australian Army in 1973 after 22 years service including overseas duty. The Applicant has disabilities that have been accepted as being the result of his service namely:
·Post-traumatic stress disorder
·Lumbar spondylosis with intervertebral disc degeneration
·Sensori-neural deafness
·Tension headaches.
He then undertook employment as Manager of two clubs until December 1986, when he resigned to commence a business as Queensland franchisor for a picture framing business. It is not in issue that the business entity utilised for this purpose was a company PURDEL PTY LTD. (“the company”). The 2 shares in the company were acquired by the Applicant and his wife on 16 December 1986 and they became the sole Directors of the company.
By his claim lodged with the respondent on 10 July 1995, the Applicant sought an “upgrade of existing pension”. At the date of his claim he described himself as “self employed”. This suggests the Applicant regarded himself as falling within the category specified as “working on his own account”.
Findings of Tribunal
The relevant findings of fact made by the Tribunal, which are not in issue are:
(a)The Applicant was born on 24 September 1929.
(b)The company began trading on 26 July 1987.
(c)The nature of the company’s business changed in 1993 when it sold the Queensland franchisor rights to Mr Ian Anderson. It retained the right to operate a retail franchise outlet. The Company had a further arrangement with Anderson to provide advisory and training services. No payment was received for these services but instead the company was not required to pay its monthly franchise fee.
(d)The Applicant did cease personally retail selling in 1995 but maintained an involvement with the Company on a part time basis.
(e)
For the financial year to 30 June 1996 the Applicant did receive funds from the company, being moneys debited to his shareholders Loan account to the extent of $47,237.50, and to
30 June 1997 of $9,951.00. He did not receive a payment of salary after August 1995.
(f)In January 2000 the Applicant suffered a transient ischaemic attack and all tasks previously undertaken by him in connection with the business ceased. The Respondent says (and it was not disputed) that the attack was a “non-accepted disability”.
Misunderstanding of terms
Grounds 4(b) & 4(c) of the Notice of Appeal go to the core of the Applicant’s case, it being the Respondent’s contention to the Tribunal that the Applicant must fail because he does not satisfy the 10 year Rule as set out in s.24(2A)(g).
The Applicant in their submissions say in essence:
(a)The Tribunal at paragraph 28 of their reasons applied the wrong test when they said inter alia:
“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 payments for work”.
(b)The correct test was whether those drawings constituted “salary or wages or earnings on his own account”, (see for example s.24 (1)(c) and s.24 (2A)(e)).
(c)Relies upon a number of authorities which the Applicant says establishes drawings do constitute “salary or wages or earnings on his own account”. (See Repatriation Commission v Buckingham (Federal Court of Australia, 7 February 1996, Ryan J); Hill v Repatriation Commission (2000) FCA 929; Counsel v Repatriation Commission (2001) FCA 1032 (1 August 2001); Re King & Repatriation Commission (1991) 22 ALD 638; Re Clare & Repatriation Commission (1989) 18 ALD 474.)
The Respondent asserts that:
(a)“last paid work” is defined in s.24(2A) as “the remunerative work that the veteran was last undertaking before he or she made the claim or application”, and further that “remunerative work” is defined to include “any remunerative activity” (s.5Q).
(b)The use by the Tribunal of the words “salary or wages” was a permissible paraphrase and the Applicant has not demonstrated that the paraphrase “caused the Tribunal to stray into an error of law”.
It is clear from the closing submissions of Counsel to the Tribunal (see pages 164 to 178 of AB) that the Tribunal was directed to specifically consider if s.24(2A)(g) of VE Act had been satisfied. It is common ground that every criteria under s.24(2A), in this case, was to be satisfied for the Applicant to be successful, however sub-paragraph (g) was clearly the main issue.
At paragraph 22 of the Reasons the Tribunal says, inter alia:
“… 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 caused on the business. We have dealt with the matter on that basis”.
Mr O’Gorman says for the Applicant that the Tribunal fell into error by characterising the drawings as “payment for work” (the ss(g)(I) test) rather than being “salary or wages or earnings on his own account” (the ssg(ii) test).
The essence of the submission was that the Applicant, by continuing to receive drawings on his loan account after August 1995 was continuing to receive “earning on his own account”. This was rejected by the Tribunal at paragraph 22 of its Reasons. As a result of dealing “with the matter on that basis”, the Tribunal effectively regarded the test at s.24(2A)(g)(ii) as irrelevant, deciding to consider the satisfaction only of the alternate specified by ssg(I), namely last paid work as an employee.
The word “earnings” has been described as “what is earned by the worker – the rewards which he receives for his efforts – in employment or in some business which he carries on” (see Rogers v. State Mines Control Authority (1964) 81 WN (pt2) NSW 120 at 123). In Counsel v. Repatriation Commission (2001) FCA 1032, Moore J considered the definition of the words and phrases “earnings on his or her own account”; “remunerative work”. In that case, the veteran was a farmer who (apart from one year) had never made a profit from the farm. His Honour made the following observations:
“The meaning of the expression ‘earnings on his or her own account’ in s24(2A)(e) has to be ascertained having regard to the statutory context in which the expression appears. It is clear that both the reference to ‘earnings’ in s23(2A)(e) and ‘salary or wages’ in the same paragraph concern the product of ‘remunerative work’ in the preceding paragraph viz s24(2A)(d). That is, one criterion that must be satisfied to secure a special rate of pension is that the veteran has been prevented from continuing in remunerative work because of the war-caused incapacity (flowing from war-caused injury or disease) and another criterion is that because the veteran has been prevented from working in this way, he or she is suffering a loss of salary, wages or earnings.
Accordingly, a logical starting point in determining the contents of the second criterion is ascertaining what is meant by ‘remunerative work’. While the meaning of this phrase has not arisen directly in the context of subs (2A) of s24, the meaning of the phrase has arisen in the context of subs (1)(c) of the same section. The phrase can plainly be treated in that latter subsection as serving the same statutory purpose as in the former and can be treated as having the same meaning. Whether work is ‘remunerative work’ raises questions about whether it is substantial and successful: see Sheehy v Repatriation Commission (1996) 66 FCR 569 at 574.
That is not to say, however, that what constitutes ‘remunerat(ion)’ is to be viewed narrowly. In Repatriation Commission v Buckingham (Ryan J, 7 February 1996, Federal Court of Australia, unreported) Ryan J had to consider whether a person engaged in voluntary work for the church and provided with free accommodation might be viewed as having been engaged in ‘remunerative work’. It was common ground in that matter, and apparently accepted by his Honour, that accommodation provided in return for services rendered could amount to remuneration for the purposes of s23(1)(b) of the Act. Nonetheless, the work must be substantial and I apprehend that this was the underlying basis on which Wilcox J accepted that the Tribunal had not erred in declining to characterise the dog breeding in Hill v Repatriation Commission [2000] FCA 929 as ‘remunerative work’.”
The benefits received by the Applicant after August 1995 from his company PURDEL PTY LTD, being in the form of repayments on his substantial loan accounts (accumulated by payments in establishing the Business and not from profits during its operation) and reimbursement of business expenses properly incurred for lunches and travelling are of an entirely different character to that of a salary which was previously received by him as salary.
From the evidence before the Tribunal of the history of activity engaged in by the Applicant after August 1995 and the source of his benefits from the company it was open to it to find, as it did, that:
(a)the benefits post August 1995 did not constitute earnings; or
(b)that the Applicant was “working on his own account”.
I do not find any error of law occurred.
I am satisfied that the Tribunal applied the correct test and that the finding made at paragraph 28 of its reasons was open to it.
On this basis, the Applicant stopped “his or her last paid work” in August 1995 as found by the Tribunal when he ceased to receive a salary.
The Applicant further submits that there is an inconsistency in the findings of the Tribunal at paragraphs 13, 16, and 25 of the Reasons, which shows that the Tribunal failed to properly understand the meaning of “working as an employee of another person”, within the context of s.24(2A)(g)(i).
I fail to see the inconsistency. The role of the Applicant in the company, and his manner and source of funds received, after August 1995 changed significantly. Whilst he did for some time continue to assist the Head franchisor Ian Anderson (for which the company PURDEL PTY LTD received some benefit), the Applicant never worked as an employee for Anderson.
As a result the employer with whom the Applicant undertook his last paid work was PURDEL PTY LTD.
The Tribunal found that it be the case, and calculated that the period from July 1987 to August 1995 was not a “continuous period of at least 10 years” of employment. That finding was both open to the Tribunal and manifestly applied the correct definition and interpretation.
Inadequate reasons
On the determinate issue of satisfaction of s.24(2A)(2)(g)(i), the reasons were adequate in my view to show the process of analysis undertaken by the Tribunal. Certainly the reasons were succinct, and on the evidence made the following findings which were open, namely:
(a)It accepted the undisputed evidence that the Applicant ceased to be paid as an employee in August 1995.
(b)Accepted the Applicant’s evidence that he had a continuing involvement in the business to January 2000, when he suffered what was ultimately diagnosed as a transient ischaemic attack, which resulted in complete cessation of his involvement with the business.
Contrary to the Applicant’s submissions, the Tribunal:
(a)Was not required to prefer any conflicting evidence of when the Applicant ceased paid work. His evidence alone satisfied the Tribunal.
(b)It was not necessary because of its determination of the question raised under s.24(2A)(g) to consider whether either s.24(1)(b) or s.24(2A)(d) had been satisfied.
(c)Was not required to consider the Applicant’s submission that he ceased work because of his accepted disabilities in either August 1997 or January 2000 because of its finding under s.24(2A)(g).
I am satisfied that the Tribunal has fulfilled the obligations imposed upon it by s.43(2B) of the Administrative Appeals Tribunal Act 1975.
Conclusion
For the reasons identified above, I will dismiss the Application.
The Respondent seeks an order that costs follow the event. I did not receive any submissions from the Applicant on that issue. I will Order the Applicant pay the Respondent’s costs fixed in the sum of $3000.00.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate:
Date:
3
0