Burgess and Repatriation Commission (Veterans’ entitlements)
[2016] AATA 598
•12 August 2016
Burgess and Repatriation Commission (Veterans’ entitlements) [2016] AATA 598 (12 August 2016)
Division
VETERANS' APPEALS DIVISION
File Number
2014/4738
Re
Maxwell Burgess
APPLICANT
And
Repatriation Commission
RESPONDENT
DECISION
Tribunal Deputy President K Bean
Lt Col R Ormston (Rtd) (Member)Date 12 August 2016 Place Adelaide The Tribunal decides that:
(a) The applicant does not meet the eligibility requirements for service pension contained in the Veterans’ Entitlements Act 1986;
(b) The Tribunal does not have jurisdiction to consider the applicant’s alternative arguments based in estoppel, breach of contract and breach of trust;
(c) There are no questions of law arising in the proceeding which should be referred to the Federal Court; and
(d) Accordingly, the decision under review is affirmed.
............ [Sgd] ...................................................
Deputy President K Bean
CATCHWORDS
PRACTICE AND PROCEDURE - Veterans' entitlements - Jurisdiction to consider estoppel, breach of contract, breach of trust and constitutional validity arguments - Referral of questions of law to Federal Court - Where no statutory entitlement to service pension - Decision under review affirmed.
LEGISLATION
Veterans' Entitlements Act 1986, ss 5B, 7A, 36
Administrative Appeals Tribunal Act 1975, s 45
Commonwealth of Australia Constitution Act 1900 (Imp), s 51 (xxxi)
CASES
Re Walsh and Commissioner of Taxation (2012) 130 ALD 200
Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330
Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193
Secretary of State for Employment v Globe Plastic Thread Co Ltd [1980] AC 506
Commonwealth v Verwayen (1990) 170 CLR 394
Georgiadis v Australian & Overseas Telecommunications Corporation (1994) 179 CLR 297
Re RM and Commissioner for Superannuation (1984) 6 ALD 272
Commonwealth of Australia and WMC Resources Ltd (1998) 152 ALR 1
Health Insurance Commission v Peverill (1994) 179 CLR 226
Allpike v Commonwealth (1948) 77 CLR 62
National Trustees Executors and Agency Co of Australasia Ltd v FCT (1954) 91 CLR 540
Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation (Swimming Pool Sales Tax case) (1992) 173 CLR 450SECONDARY MATERIALS
Thompson Reuters, The Laws of Australia (at 1 March 2014)
REASONS FOR DECISION
Deputy President K Bean
Lt Col R Ormston (Rtd) (Member)12 August 2016
The applicant, Mr Burgess, was born in March 1927 and is now 89. When he was only 18 years old, he voluntarily joined the Australian Army on 17 May 1945, toward the end of World War II. Mr Burgess proceeded to serve with the Australian Army continuously from 17 May 1945 to 25 August 1947, including 523 days of overseas service in Japan as a member of the British Commonwealth Occupation Force (BCOF) from 12 March 1946 through to 16 August 1947.[1]
[1] Outline of Applicant’s Submissions dated 30 March 2016, p 4 [17].
On 18 July 2013, Mr Burgess made a claim for a service pension.[2]
[2] Exhibit 2, T3/11-26.
On 14 August 2013, a letter was sent to Mr Burgess advising him that on that date a delegate of the Repatriation Commission had decided that he was not eligible for a service pension as he did not render “qualifying service” as defined in subs 7A(1) of the Veterans’ Entitlements Act 1986 (VEA).
Mr Burgess subsequently sought review of that decision and on 13 June 2014, a different delegate of the Repatriation Commission affirmed the primary decision.[3] The review delegate also concluded that Mr Burgess had not rendered “qualifying service” and therefore was not eligible for a service pension, although the delegate noted that he was eligible for and in receipt of a disability pension in respect of his service.
[3] Exhibit 2, T2/7-10.
On 12 September 2014, Mr Burgess applied to this Tribunal for review of that decision, giving rise to this matter.[4]
[4] Exhibit 2, T1/4.
We should also note that Mr Burgess is currently the Chairman of the BCOF Executive Council of Australia, which we understand is an association with approximately 650 surviving members, and also many surviving widows of deceased members who “have an interest in the outcome of the application”.[5] We understand that Mr Burgess’s purpose in bringing the application is to establish an entitlement to service pension, not just for himself but for others who rendered service of a similar nature, in particular those who served with the BCOF in Japan.
[5] Outline of Applicant’s Submissions dated 30 March 2015, p 3 [2].
PROCEDURAL HISTORY
A directions hearing was initially held in this matter on 9 June 2015, at which Mr Burgess was represented by Mr Ellicott QC. On that occasion, the issue of the limits of the Tribunal’s jurisdiction was raised with the parties and directions were made for the exchange of submissions in preparation for a jurisdiction hearing on 10 August 2015. Unfortunately, as a result of non-compliance with the Tribunal’s directions, that jurisdiction hearing was converted into a further directions hearing to discuss the progress of the application. The matter was then adjourned until 9 September 2015, but the directions hearing on that date was deferred, upon application by the applicant, until 7 October 2015. On that occasion, the applicant was directed to file and serve any proposed question(s) of law which he sought to have referred to the Federal Court under s 45 of the Administrative Appeals Tribunal Act 1975 (AAT Act) and the matter was listed for a further directions hearing on 16 October 2015.
Following discussions at the directions hearing on 16 October 2015, at which Mr Burgess was again represented by Mr Ellicott, the applicant’s request for questions of law to be referred to the Federal Court was communicated to the President of the Tribunal, as required by s 45 of the AAT Act. That request was not granted by the President,[6] and the matter was listed for a directions hearing on 20 January 2016.
[6] See [41] below.
At that directions hearing, Mr Ellicott again appeared on behalf of Mr Burgess, and we made directions as follows:
…
3.This matter be listed for a preliminary hearing on 5 April 2016 for consideration by the Tribunal of the following issues:
(a)Whether the applicant should succeed under the Veterans’ Entitlements Act 1986;
(b)Whether the Tribunal has jurisdiction to consider the applicant’s alternative arguments (constitutional validity, estoppel, contract and breach of trust); and
(c)Whether any questions of law should be referred to the Federal Court and, if so, what findings of fact should accompany that referral.
STATUTORY FRAMEWORK AND ISSUES
It follows that the primary issue ultimately arising for our determination in this matter is the correctness of the decision under review and, in particular, whether Mr Burgess did render “qualifying service” so as to be eligible for service pension.
We note that the provisions of the VEA which are most relevant to determining this question are the following:
36 Eligibility for age service pension
(1)Subject to subsection (4), a person is eligible for an age service pension if the person:
(a) is a veteran; and
(b) has rendered qualifying service; and
(c) has reached pension age.
Note 1A:For veteran see subsection 5C(1).
Note 1:For qualifying service see section 7A.
Note 2:For pension age see section 5QA.
…
7A Qualifying service
(1)For the purposes of Parts III and VA and sections 85 and 118V, a person has rendered qualifying service:
(a) if the person has, as a member of the Defence Force:
(i)rendered service, during a period of hostilities specified in paragraph (a) or (b) of the definition of period of hostilities in subsection 5B(1), at sea, in the field or in the air in naval, military or aerial operations against the enemy in an area, or on an aircraft or ship of war, at a time when the person incurred danger from hostile forces of the enemy in that area or on that aircraft or ship; or
(ii)rendered service after 29 October 1945 in respect of which the person has been awarded, or has become eligible to be awarded, the Naval General Service Medal or the General Service Medal (Army and Royal Air Force) with the Minesweeping 1945-51 Clasp, the Bomb-Mine Clearance 1945-53 Clasp, the Bomb and Mine Clearance 1945-49 Clasp or the Bomb and Mine Clearance 1945-56 Clasp; or
(iii)rendered service outside Australia in an area described in column 1 of Schedule 2 during the period specified in column 2 of that Schedule opposite to that description, as a member of a unit of the Defence Force that was allotted for duty, or as a person who was allotted for duty, in that area; or
(iv) rendered warlike service; or
(v)rendered continuous full-time service on submarine special operations, at some time in the period starting on 1 January 1978 and ending at the end of 31 December 1992, for which the person has been awarded, or has become eligible to be awarded, the Australian Service Medal with Clasp “SPECIAL OPS”; or
(vi)rendered continuous full-time service on submarine special operations, at some time in the period starting on 1 January 1978 and ending at the end of 31 December 1992, for which the person would have been eligible to be awarded the Australian Service Medal with Clasp “SPECIAL OPS” if the person had not already been awarded it for other service; or
(b)if, during a period of hostilities, the person has, as a member of the defence force established by a Commonwealth country, rendered, in connection with war or war-like operations in which the Naval, Military or Air Forces of Australia were engaged:
(i)service, in an area outside that country, at a time when the person incurred danger from hostile forces of the enemy in that area; or
(ii)service within that country, being service in respect of which the person has been awarded, or has become eligible to be awarded, a campaign medal; or
(c)if the person is an allied veteran who, during a period of hostilities, has, as a member of the defence force established by an allied country, rendered, in connection with a war, or war-like operations, in which the Naval, Military or Air Forces of Australia were engaged, service in an area within or outside the country in which the person enlisted in those forces, being service in respect of which the person incurred danger from hostile forces of the enemy; or
(d)if the person was, during a period of hostilities specified in paragraph (a) or (b) of the definition of period of hostilities in subsection 5B(1), employed by the Commonwealth on a special mission outside Australia, and, in the course of carrying out that mission, incurred danger from hostile forces of the enemy; or
(e)if the person is an eligible civilian within the meaning of subsection 5C(1) who was, during a period of hostilities specified in paragraph (b) of the definition of period of hostilities in subsection 5B(1), detained by the enemy; or
(f)if the person is a person in respect of whom a pension is payable in pursuance of subsection 13(6); or
(g)if the person is an Australian mariner as defined by subsection 5C(1) who, in the course of:
(i)any service rendered by the person in employment of a kind specified in paragraph (a), (b), (c), (e) or (g) of that definition; or
(ii)any service rendered by the person as a pilot referred to in paragraph (d) of that definition; or
(iii)any service rendered by the person as a member or employee of the Commonwealth Salvage Board;
was on a ship or in an area at a time when the person incurred danger from hostile forces of the enemy on the ship or in the area, as the case may be; or
(h)if the person is an allied mariner who, in the course of any service rendered by the person in employment of a kind to which paragraphs (a) and (b) of the definition of allied mariner in subsection 5C(1) applies:
(i) was detained by the enemy; or
(ii)was in an area service in which would, if the person had been a member of the Defence Force, have entitled the person to the award of a campaign medal and incurred, while he or she was in that area, danger from hostile forces of the enemy.
Note 1:For period of hostilities see subsection 5B(1) and for allotted for duty in an operational area see subsection 5B(2).
Note 2:For allied mariner, allied veteran, Australian mariner, defence force established by a Commonwealth country, defence force established by an allied country, eligible civilian, enemy, member of a unit of the Defence Force, member of the Defence Force and special mission see subsection 5C(1).
(2) In subparagraphs (1)(b)(ii) and (1)(h)(ii):
campaign medal, in relation to service during the period of World War 2 from its commencement to and including 29 October 1945, means:
(a) any of the following medals:
(i) 1939-45 Star;
(ii) Atlantic Star;
(iii) Air Crew Europe Star;
(iv) Africa Star;
(v) Pacific Star;
(vi) Burma Star;
(vii) Italy Star;
(viii) France and Germany Star; or
(b)any other medal declared by the regulations to be a campaign medal in relation to service during that period.
…
5B War and operational area related definitions
(1) In this Act, unless the contrary intention appears:
allotted for duty in an operational area has the meaning given by subsection (2).
operational area means an area described in column 1 of Schedule 2 during the period specified in column 2 of Schedule 2 opposite to the description of the area in column 1.
period of hostilities means:
(a)World War 1 from its commencement on 4 August 1914 to 11 November 1918 (both included); or
(b)World War 2 from its commencement on 3 September 1939 to 29 October 1945 (both included); or
(c)the period of hostilities in respect of Korea from 27 June 1950 to 19 April 1956 (both included); or
(d)the period of hostilities in respect of Malaya from 29 June 1950 to 31 August 1957 (both included); or
(e)the period of hostilities in respect of war-like operations in operational areas from 31 July 1962 to 11 January 1973 (both included).
war to which this Act applies means World War 1 or World War 2.
World War 1 means:
(a) the war that commenced on 4 August 1914; and
(b)any other war in which the Crown became engaged after 4 August 1914 and before 11 November 1918.
World War 2 means:
(a) the war that commenced on 3 September 1939; and
(b)any other war in which the Crown became engaged after 3 September 1939 and before 3 September 1945.
In the event, however, a formal concession was made by Mr Ellicott at the preliminary hearing in this matter on 5 April 2016 that, upon a proper construction of the VEA, Mr Burgess had not rendered qualifying service and therefore was not eligible for a service pension under the VEA. Having regard to the definition of the phrase “period of hostilities” in the VEA, we regard that concession as having been correctly made, and it follows that it is unnecessary for us to further consider this question.
We also note that there was no dispute between the parties that, in light of the fact that Mr Burgess did not render qualifying service as defined in the VEA, unless he succeeded in persuading us that we had jurisdiction with respect to one or more of the other arguments he had raised, it followed that the Tribunal was obliged to affirm the decision under review. We are also satisfied as to the correctness of that proposition.
It is in that context that we will proceed to consider whether we have jurisdiction with respect to any of the alternative arguments advanced on behalf of Mr Burgess. Having done so, we will also address the issue of whether we consider that we should refer any questions of law to the Federal Court.
THE APPLICANT’S ALTERNATIVE ARGUMENTS
These were summarised in the applicant’s Outline of Submissions as follows:
1.Having regard to the well-known equitable principle of proprietary estoppel the applicant has a proprietary right to a service pension which the respondent cannot deny in light of the representations that induced the applicant to serve as a member of the Australian Contingent of the British Commonwealth Occupation Force ("BCOF") in Japan and upon which he relied to his detriment.
2.The provisions in the Veterans' Entitlement Act in 1986 (sic) are un-constitutional in so far as they acquire from the applicant a proprietary right to a service pension on other than just term (sic) contrary to the provisions contained in Paacitum 51 (xxxi) of the Commonwealth Constitution.
3.The applicant has a contractual entitlement to a service pension as he completed two years of service with the Australian Imperial Forces ("AIF") including extensive service as a member of the Australian contingent of the BCOF in Japan on the basis of representations made to him that induced him to serve in Japan on the basis that that (sic) he would have the same entitlements to a service pension as those members of the AIF who saw active service in World War II.
4.The respondent is in breach of trust with the applicant having regard to the promises that were made to him which induced him to volunteer to serve as a member of the Australian contingent of the BCOF in Japan and upon which he relied in so volunteering and so serving.[7]
[7] Applicant’s Outline of Submissions dated 30 March 2016, pp 2-3.
Before addressing the question of whether we have jurisdiction with respect to any of these issues more directly, we will first summarise the nature of the inducements and promises we understand Mr Burgess says were made to him before he joined the BCOF.
THE RELEVANT BACKGROUND FACTS
Mr Burgess points to the fact that on 13 February 1946, the then Prime Minister of Australia, Mr Chifley, issued the following press statement:
Members of the Interim Forces who enlisted before the legally determined date of the end of the war would be entitled to full benefits under the Repatriation Act and the Re-establishment and Employment Act. Personnel concerned would include members of the Occupation Force in Japan.[8]
That same day, the Prime Minister made a public statement as follows:
Members of the Interim Forces (including members of the occupation force in Japan) who enlist in these forces before the legally determined date of the end of a state of war will be entitled to full benefits under the Australian Soldiers’ Repatriation Act and the Re-establishment and Employment Act.[9]
[8] Exhibit 1, Tab 1, p 9 at [66].
[9] Exhibit 1, Tab 1, p 9.
Similarly, on page 2074 of the Senate Official Hansard (No. 27, 1946) dated 3 July 1946, the Acting Minister for Defence said:
Members of the Australian defence forces now serving with the British Commonwealth Occupation Force in Japan are entitled to all existing benefits prescribed by the Repatriation Act and the Re-establishment and Employment Act.[10]
[10] Exhibit 1, Tab 6.
Mr Burgess contends that these statements were also reflected in advertisements for recruits in 1946, which indicated that recruits would be eligible for “the benefits available to members of the wartime A.I.F.”, including “rehabilitation benefits”.[11]
[11] See Exhibit 1, Tab 1, p 9 and Tab 11.
Although he did not dispute that the above statements were made, we note that Mr Crowe, who appeared as advocate for the respondent, did dispute that these statements promised BCOF members a service pension.
DO WE HAVE JURISDICTION WITH RESPECT TO THE ESTOPPEL ARGUMENT?
We take it to be a trite proposition that the Tribunal is part of the Executive arm of government, and is entirely a creature of statute. Unlike a court, the Tribunal has no inherent powers and nor does it have any legal power or authority other than that conferred upon it either by the AAT Act, or by other enactments.
As Deputy President Jarvis explained in Re Walsh and Commissioner of Taxation (at 204):
Section 71 of the Commonwealth of Australia Constitution Act 1900 (Imp) provides relevantly as follows:
71. The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction …
The meaning of “judicial power” in s 71 was explained by Griffith CJ in an early High Court case as follows:
… (I) am of opinion that the words “judicial power” as used in sec 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action.[12]
[12] Re Walsh and Commissioner of Taxation (2012) 130 ALD 200, quoting Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 at 357.
As we see it, the fundamental difficulty with the applicant’s estoppel argument being put in the context of this application is that it involves the exercise of judicial power, which the Tribunal does not have. The Tribunal is empowered to review whether a particular administrative decision, in this case relating to a possible entitlement under the VEA, has been correctly made, having regard to the applicable statutory framework. The Tribunal is entitled and may be required to form an opinion on any matter relevant to the question of whether the decision under review was the correct or preferable decision, including where necessary the constitutional validity of a relevant provision. However, as we see it, the applicant’s ‘estoppel argument’ has no direct bearing on the task entrusted to us, namely merits review of the Repatriation Commission’s decision of 14 August 2013.
As we have already indicated, the applicant concedes that as a matter of proper construction and application of the relevant Act, the VEA, he did not render qualifying service and is not eligible for a service pension. However, from that starting point he asserts an entitlement to a service pension on a different basis, namely a promise made to him prior to his enlistment with the BCOF.
On analysis, this is not a claim for a service pension under the VEA, but an assertion as to an entitlement outside and apart from the VEA. The asserted entitlement rests not on a proper construction of the VEA, but on a separate cause of action based on past conduct of the Commonwealth and leading to equitable relief. The relevance of the VEA in this context is not to provide a basis for Mr Burgess’s pension claim, but to serve as evidence of what he asserts to be a broken promise. The extent to which Mr Burgess has such a cause of action against the Commonwealth, based on its past conduct and alleged failure to act consistently with that conduct, is not something the Tribunal, as an administrative decision-maker and part of the Executive, has authority or jurisdiction to rule upon. As a matter of law, it is simply not open to us to declare that an estoppel operates against the Commonwealth, or even to act on the basis of an assumption or opinion that it does. This is a cause of action which can only be established in a court.
Another difficulty with Mr Burgess’s argument as we see it is that the estoppel he asserts could only operate against the respondent, as the relevant emanation of the Commonwealth.[13] While any estoppel which did operate may fetter the discretion of the respondent,[14] it could not fetter the discretion of the Tribunal, which is obliged to determine Mr Burgess’s pension claim on the basis of the facts and the current law. It follows for that reason also that Mr Burgess’s estoppel argument cannot avail him before us. We do not have power to declare or enforce any estoppel against the respondent, and nor could the Tribunal itself be subject to any estoppel, noting that “the jurisdiction of a statutory tribunal cannot be enlarged by estoppel or agreement.”[15]
[13] An estoppel of this kind generally operates against the decision-maker based on their past conduct: Thompson Reuters, The Laws of Australia (at 1 March 2014) [2.4.3120]ff.
[14] Although we doubt that it would: see Minister for Immigration, Local Government and Ethnic Affairs vKurtovic (1990) 21 FCR 193 (per Gummow J).
[15] See Secretary of State for Employment v Globe Plastic Thread Co Ltd [1980] AC 506, at 510, 519-20.
It is our understanding that in order for Mr Burgess to make good his estoppel argument, he would need to take legal action against the Commonwealth, and contend that the respondent was estopped from determining his pension claim adversely, or submitting that the Tribunal should do so.[16] However, this is not a cause of action which the Tribunal has power or jurisdiction to determine. Nor is it necessary for the Tribunal to form an opinion on the question as part of conducting a merits review of the decision the subject of Mr Burgess’s application (or properly open to us to do so).
[16] See also Commonwealth v Verwayen (1990) 170 CLR 394. We note this appears to be what was contemplated in an advice from Mr Street SC relied upon by the applicant: Exhibit 1, Tab 34.
For these reasons, we have concluded that we lack jurisdiction to further consider Mr Burgess’s estoppel argument.
DO WE HAVE JURISDICTION WITH RESPECT TO THE BREACH OF CONTRACT AND BREACH OF TRUST ARGUMENTS?
For similar reasons, we have reached the same conclusion with respect to Mr Burgess’s arguments based on breach of contract and/or breach of trust. As with the estoppel argument, these arguments are directed toward establishing causes of action separate from and outside the VEA, with respect to which the Tribunal has no jurisdiction.
As we have attempted to explain, the Tribunal’s powers do not extend to determining controversies between the parties with respect to rights and obligations arising outside the applicable statutory framework, namely the VEA. Accordingly, they do not extend to determining whether, regardless of that statutory framework, Mr Burgess has an entitlement to some form of service pension (or compensation in lieu of a service pension) by reason of a separate cause of action based in estoppel, contract and/or breach of trust. That is the province of the courts, which exercise the judicial power of the Commonwealth.
THE CONSTITUTIONAL ISSUE
We note that Mr Burgess also seeks a determination by us that the relevant provisions of the VEA are unconstitutional in their application to him as they acquire property from him other than on just terms. Although it was not developed orally at the hearing, this argument depends in part on a contention that the enactment of the VEA effectively extinguished entitlements which Mr Burgess and other veterans in his position had under previous legislation, namely the Repatriation Act 1920.[17]
[17] See the opinion of Mr Street SC at Exhibit 1, Tab 34.
In other words, part of Mr Burgess’s argument is that the previous legislative provisions gave effect to or were consistent with the promises made to him and on which he relied. However, by adopting a more restrictive definition of “qualifying service”, the VEA extinguished those entitlements. In addition to contending that the respondent is estopped from relying on any such extinguishment, Mr Burgess contends that it amounted to an acquisition of property otherwise than on just terms.[18]
[18] Re RM and Commissioner for Superannuation (1984) 6 ALD 272, p 288, quoting Georgiadis v Australian & Overseas Telecommunications Corporation (1994) 179 CLR 297.
We acknowledge that there is some precedent for the Tribunal considering the question of whether there was an unjust acquisition of property within the meaning of s 51(xxxi) of the Constitution, and while we do not have jurisdiction to reach a conclusion having legal effect that legislation is unconstitutional,[19] it is arguable that we do have jurisdiction to form an opinion as to this issue.
[19] Re Walsh and Commissioner of Taxation (2012) 130 ALD 200.
In Re RMand Commissioner for Superannuation, the applicant argued that her proprietary right to a superannuation pension under the Superannuation Act 1922 had been taken away by a later Act. The Tribunal concluded that it was being asked to determine whether a statutory power was being exercised within constitutional limits, and this question was within its jurisdiction. It ruled that the notion of “property” for the purposes of s 51(xxxi) of the Constitution did not extend to an “inchoate right to a pension under an enactment which is repealed and replaced by other rights before any entitlement to the pension has vested in interest”.[20] The Tribunal continued:
We agree with the submission on behalf of the Commissioner that, putting the applicant’s case at its highest, all that was lost was a “mere expectation of a right”, not “property” within the meaning of s 51(xxxi).
If, contrary to that view, the expectation of a right to a pension was “property” for the purposes of s 51(xxxi) of the Constitution, we do not consider that the applicant’s right was “acquired” by the Commonwealth. As Mason J said in Commonwealth v Tasmania (1983) 46 ALR 265 at 708: “The emphasis in s 51(xxxi) is not on a ‘taking’ of private property but on the acquisition of property for purposes of the Commonwealth. To bring the constitutional provision into play it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be”.
To similar effect were the following observations by Brennan J at 795: “Where neither the Commonwealth nor any other person acquires proprietary rights under a law of the Commonwealth, there is no acquisition upon which para (xxxi) may fasten. And so, in Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 408; 26 ALR 185 at 192-3, Gibbs J observed that ‘not every compulsory divesting of property is an acquisition within s 51(xxxi)’.”
There is nothing in the amendments to the 1922 Act or in the provisions of the 1976 Act as amended, to which we were referred, which could be construed as effecting an “acquisition” of property in the required sense. There is, in our view, no more than an extinguishment of one entitlement and the substitution in its place of another entitlement. At no point of time was the former “entitlement” to a pension divested from the applicant and vested in the Commonwealth, the Commissioner for Superannuation or any other person or agency on behalf of the Commonwealth.[21]
[20] Re RM and Commissioner for Superannuation (1984) 6 ALD 272, at p 288.
[21] Ibid 288.
Whilst accepting that we have jurisdiction to form an opinion on this question, we have concluded that the reasoning and conclusions of the Tribunal in Re RM apply equally here. Even accepting for the purposes of the argument that Mr Burgess had an entitlement to a service pension under the Repatriation Act 1920 (which we do not need to decide[22]), we are not persuaded that this amounted to “property” or that it was “acquired” by the Commonwealth.
[22] Although it is unnecessary for us to determine this issue, as we understand the position, prior to enactment of the Veterans’ Entitlements Act 1986, the Repatriation Act 1920 conferred an entitlement to a service pension on a man who had “served in a theatre of war and has reached the age of sixty years” (see subs 84(1)). However, as he was born in 1927, Mr Burgess was fifty-nine in 1986. Arguably therefore, he could not have had a current entitlement to a service pension when the Repatriation Act was replaced by the VEA.
We note that since RM was decided, the High Court has decided a number of cases in which similar issues arose, and made observations consistent with those of the Tribunal in RM.
In Georgiadis and Australian and Overseas Telecommunications Corporation, the plurality stated:
Accordingly, “acquisition” in s. 51(xxxi) extends to the extinguishment of a vested cause of action, at least where the extinguishment results in a direct benefit or financial gain (which, of course, includes liability being brought to an end without payment or other satisfaction) and the cause of action is one that arises under the general law. The position may be different in a case involving the extinguishment or modification of a right that has no existence apart from statute. That is because, prima facie at least and in the absence of a recognized legal relationship giving rise to some like right, a right which has no existence apart from statute is one that, of its nature, is susceptible of modification or extinguishment. There is no acquisition of property involved in the modification or extinguishment of a right which has no basis in the general law and which, of its nature, is susceptible to that course. A law which effected the modification or extinguishment of a right of that kind would not have the character of a law with respect to the acquisition of property within s. 51(xxxi) of the Constitution.[23]
[23] Georgiadis v Australian & Overseas Telecommunications Corporation (1994) 179 CLR 297 [1994] 179 179, pp 305-306, citing Health Insurance Commission v. Peverill (1994) 119 CLR 226, per Mason CJ, Dean and Gaudron JJ.
Similarly, in Commonwealth of Australia v WMC Resources Ltd (formerly Western Mining Corporation Ltd) (1998) 152 ALR 1 at [128], Justice McHugh observed:
Section 51(xxxi) has been liberally interpreted as concerned with matters of substance rather than form. … If a federal law extinguishes a property right under the general law and as a result the Commonwealth obtains a corresponding benefit (no matter how small), the Commonwealth will ordinarily be taken to have acquired that property. … If s 51(xxxi) is read as meaning, “No person shall be deprived of his or her property except on just terms”, pension or welfare rights under a federal statute would probably be incapable of reduction or extinguishment. It would be surprising, however, if the Constitution required that parliament, once it granted a pension or other gratuity, could not reduce or revoke the entitlement without paying compensation. (Citations omitted)
He also made reference (at [130]), to “the traditional doctrine that one parliament cannot bind a future parliament”. Justice Gummow made similar observations (at [197]):
The present case has an affinity to, but is not on all fours with, those cases involving gratuitous payments, whether as pensions or otherwise, made by the Executive Government under statutory authority. It has been said that the “rights” to receive such payments are the creation of the legislature and are always liable to alteration or abolition by later legislation.[24]
[24] Commonwealth of Australia v WMC Resources Ltd (formerly Western Mining Corporation Ltd) (1998) 152 ALR 1, citing Allpike v Commonwealth (1948) 77 CLR 62 at 69, 76-7; Health Insurance Commission v Peverill (1994) 179 CLR 226 at 245, 256, 263-5; 119 ALR 675. Cf the proprietary nature of statutory rights to compensation payments under federal compulsory acquisition schemes, National Trustees Executors and Agency Co of Australasia Ltd v FCT (1954) 91 CLR 540 at 557-8, 571-2, 580-7.
Earlier, in Health Insurance Commission v Peverill, the plurality explained:
It is significant that the rights that have been terminated or diminished are statutory entitlements to receive payments from consolidated revenue which were not based on antecedent proprietary rights recognised by the general law. Rights of that kind are rights which, as a general rule, are inherently susceptible of variation. That is particularly so in the case of both the nature and quantum of welfare benefits, such as the provision of Medicare benefits in respect of medical services. Whether a particular Medicare benefit should be provided and, if so, in what amount, calls for a carefully considered assessment of what services should be covered and what is reasonable remuneration for the service provided, the nature and the amount of the Medicare benefit having regard to the community’s need for assistance, the capacity of government to pay and the future of health services in Australia. All these factors are susceptible of change so that it is to be expected that the level of benefits will change from time to time. Where such change is effected by a law which operates retrospectively to adjust competing claims or to overcome distortion, anomaly or unintended consequences in the working of the particular scheme, variations in outstanding entitlements to receive payments under the scheme may result. In such a case, what is involved is a variation of a right which is inherently susceptible of variation and the mere fact that a particular variation involves a reduction in entitlement and is retrospective does not convert it into an acquisition of property. More importantly, any incidental diminution in an individual’s entitlement to payment in such a case does not suffice to invest the law adjusting entitlements under the relevant statutory scheme with the distinct character of a law with respect to the acquisition of property for the purposes of s 51(xxxi) of the Constitution.[25]
[25] [1994] 179 CLR 226, at p 237, citing Mutual Pools & StaffPty Ltd and The Commonwealth of Australia [1994] 179 CLR 155, at pp 171-172, per Mason C.J.; pp 189-190, per Deane and Gaudron JJ.
To similar effect, Justice Brennan said (at 245):
Perhaps an assignee practitioner might think that the distinction between a debt and a statutory right to claim a Medicare benefit and to have the claim accepted and paid is artificial. But the distinction reflects an important difference. When, by statute or otherwise, a debt is created, the creditor is by law entitled to payment in the amount of the debt and that entitlement is immune from legislative acquisition under s. 51(xxxi) unless just terms are provided. But where a pecuniary benefit payable out of the Consolidated Revenue is gratuitously provided by the Parliament to the beneficiary, the amount of the benefit remains until payment within the unfettered control of the Parliament. The distinction between a debt and the right conferred on assignee practitioners by the Principal Act is the difference between something owned and something expected, the fulfilment of the expectation being dependent on the continued will of the Parliament.[26]
[26] Ibid 245.
Even assuming therefore that Mr Burgess had an entitlement to a service pension, or any other benefit under earlier legislation, which was extinguished or diminished by later legislation, it is our opinion that this did not effect an “acquisition” of “property” from him so as to invoke s 51(xxxi) of the Constitution. Therefore, in our view, there is no basis for a conclusion that any aspect of the VEA does not apply to him for constitutional reasons.
SHOULD WE REFER ANY QUESTION(S) OF LAW TO THE FEDERAL COURT PURSUANT TO S 45 OF THE AAT ACT?
We note that subs 45(1) of the AAT Act provides as follows:
(1)The Tribunal may, with the agreement of the President, refer a question of law arising in a proceeding before the Tribunal to the Federal Court of Australia for decision. The Tribunal may do so on its own initiative or at the request of a party to the proceeding.
Note:This Part does not apply to certain migration proceedings (see section 43C).
During the progress of his application in the Tribunal, Mr Burgess requested that the following questions of law be referred to the Federal Court:
1. Does the Administrative Appeals Tribunal have jurisdiction to deal with the questions of constitutional validity, estoppel, contract and breach of trust involved in the subject application?
2. Is the respondent to the application estopped from denying the applicant an entitlement to a service pension, given the promises made to the applicant (and other members of the Australian contingent of the British Commonwealth Occupation Force) upon which he relied, which were promises made on behalf of the Australian Government prior to his voluntary enlistment and reiterated during and after the period of his engagement in the Australian contingent of the British Commonwealth Occupation Force, until they were purportedly taken away by the Veterans' Entitlements Act 1986?
3. Insofar as amendments to the Veterans' Entitlements Act 1986 purport to deny the applicant (and other members of the Australian contingent of the British Commonwealth Occupation Force) the right to a service pension, are those amendments beyond the Constitutional power of the Commonwealth Government?
4. Given the promises made to the applicant (and other members of the British Commonwealth Occupation Force) prior to, during and after his engagement in the Australian contingent of the British Commonwealth Occupation Force, and upon which he relied, is the applicant entitled to a contractual benefit of a service pension or otherwise entitled in equity to same notwithstanding that the Veterans' Entitlements Act 1986 purports to take away the accrued rights of those like the applicant who served as a member of the Australian contingent of the British Commonwealth Occupation Force in Japan?[27]
[27] Applicant’s Submissions dated 14 October 2015.
As we have noted above, the President did not accede to the applicant’s request to refer questions of law to the Federal Court, as he considered that the questions of fact necessary for any question of law to arise had not yet been found. However, he contemplated that we would give further consideration to this issue (noting that any referral could only be made with his concurrence). We have therefore considered whether, with the benefit of the additional material provided and submissions made, there may now be a basis to seek the President’s agreement to a referral.
However, in the event, as we have indicated above, we have concluded that we do not have jurisdiction to address the asserted causes of action based in estoppel, breach of contract and/or breach of trust. We consider it would be inappropriate to refer a question of law to the Federal Court relating to a matter outside the Tribunal’s jurisdiction. We also note that it would arguably not be open to the Tribunal to refer such a question, given the limitation in s 45 to a “question of law arising in a proceeding”.
With respect to the constitutional question, we have concluded there is insufficient doubt surrounding this, and insufficient prospect of it affecting the outcome of the matter, to warrant this being referred to the Federal Court. Further, assuming Mr Burgess wishes to pursue his other causes of action in a court, it would clearly be more convenient and appropriate for this question also to be dealt with at the same time.
It would also be somewhat odd and inappropriate, it seems to us, for us to refer to the Federal Court a question which is closely related to other issues outside our jurisdiction in circumstances where there are no other ‘live’ issues remaining for our determination. We have accordingly decided that it is preferable for us to finally determine the application, which we note will allow Mr Burgess to pursue the issue in the Federal Court, by way of an appeal from or application for judicial review of our Decision, should he wish to do so.
With respect to the extent of our jurisdiction, of course we have now determined this, and it will also be open to Mr Burgess to challenge our conclusions as to jurisdiction in the Federal Court.
Noting that both parties agree as to the proper outcome of the application by reference to the VEA, we have accordingly concluded that there is no question of law arising in the application which it would be appropriate for us to refer to the Federal Court.
CONCLUSION
In summary, we have concluded that we lack jurisdiction to determine whether Mr Burgess has a valid cause of action against the Commonwealth based on estoppel, breach of contract or breach of trust. We acknowledge that it is open to us to form an opinion on the constitutional issue, and our opinion is that s 51(xxxi) is not invoked in the circumstances of this matter.
We have further concluded that no relevant question of law has been identified by Mr Burgess which is within our jurisdiction and which it would be appropriate for us to refer to the Federal Court pursuant to s 45 of the AAT Act.
For completeness, we note that with respect to the issues of jurisdiction and the constitutional question, it will in any event be open to Mr Burgess to challenge our conclusions in the Federal Court, if so advised.
DISPOSITION
We note that at the hearing on 5 April 2016 both parties agreed that, if we were against the applicant with respect to jurisdiction, we should simply proceed to affirm the decision under review. Indeed, Mr Ellicott indicated that the applicant did not wish to be heard further and the Tribunal should proceed to determine all issues before it and reach a final decision. In these circumstances, and in light of our conclusions, we have determined that the appropriate course is to affirm the decision under review.
DECISION
The Tribunal decides that:
(a)The applicant does not meet the eligibility requirements for service pension contained in the VEA;
(b)The Tribunal does not have jurisdiction to consider the applicant’s alternative arguments based in estoppel, breach of contract and breach of trust;
(c)There are no questions of law arising in the proceeding which should be referred to the Federal Court; and
(d)Accordingly, the decision under review is affirmed.
I certify that the preceding 54 (fifty-four) paragraphs are a true copy of the reasons for the decision herein of Deputy President K Bean and Lt Col R Ormston (Rtd) (Member) ........ [Sgd] ...............................................
Associate
Dated 12 August 2016
Date of hearing 5 April 2016 Counsel for the Applicant Mr R Ellicott QC and Mr R Cameron Solicitors for the Applicant Hunt & Hunt Lawyers Advocate for the Respondent Mr A Crowe
Department of Veterans' Affairs Advocacy Section
Key Legal Topics
Areas of Law
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Jurisdiction
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Estoppel
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Judicial Review
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Standing
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