Cadd and Repatriation Commission
[2008] AATA 69
•25 January 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 69
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S 200700013
GENERAL ADMINISTRATIVE DIVISION ) Re JOHN WILLIAM CADD Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Mr J G Short (Member)
Professor P Reilly AO (Member)Date25 January 2008
PlaceAdelaide
Decision The Tribunal affirms the decision made by the Veterans’ Review Board on 8 December 2006 which set aside a decision of the Repatriation Commission dated 6 January 2006, and substituted a new decision that pension be assessed at 60 percent of the general rate from and including 4 September 2003 and at 80 percent of the general rate from and including 18 October 2005.
..............................................
J G SHORT
(Member)
CATCHWORDS
VETERANS' AFFAIRS – veterans' entitlements – assessment – Disability Pension – special rate – s 24(2)(a) – veteran ceased to engage in remunerative work for reasons other than his war-caused incapacity – not entitled to an earnings related rate of pension – decision affirmed
Veterans’ Entitlements Act 1986 s 24
Flentjar v Repatriation Commission (1997) 48 ALD 1
Repatriation Commission v Smith (1987) 15 FCR 327
Rehabilitation Commission v Braund (1991) 23 ALD 591
Re Banovich and Repatriation Commission (1986) 9 ALN N223
Doig v Repatriation Commission, Federal Court, 18 December 1996, 1106/1996
Starcevich v Repatriation Commission (1987) 18 FCR 221
Sheehy v Repatriation Commission (1996) 66 FCR 569
Chambers v Repatriation Commission (1995) 55 FCR 9
Repatriation Commission v Buckingham, Federal Court, 7 February 1996, 37/1996
Repatriation Commission v Van Heteren (2003) 75 ALD 703Re Smith and Repatriation Commission [2004] AATA 1223
REASONS FOR DECISION
25 January 2008 Mr J G Short (Member)
Professor P Reilly AO (Member)introduction
1. Mr Cadd is a Vietnam veteran. He has accepted disabilities of post-traumatic stress disorder (PTSD), sensorineural hearing loss (bilateral) and tinnitus (left). Mr Cadd has recorded rejected disabilities of depressive disorder, pathological gambling and chronic adjustment disorder with depressed mood.
2. On 4 December 2003, Mr Cadd lodged a claim for acceptance of PTSD as war-caused. On 15 December 2005 the Veterans’ Review Board (VRB) accepted PTSD as related to service with effect from 4 September 2003. The VRB referred the matter to the respondent (the Commission) for assessment of an appropriate rate of Disability Pension. On 6 January 2006 the Commission assessed pension at 60 percent of the general rate from 4 September 2003. On 8 December 2006 the VRB set aside the Commission’s decision of 6 January 2006 and substituted a new decision that pension be paid at 60 percent of the general rate from and including 4 September 2003 and then at 80 percent of the general rate from and including 18 October 2005. On 17 January 2007 Mr Cadd lodged an appeal to this Tribunal.
3. There was no suggestion that Mr Cadd’s accepted disabilities warranted an increase in pension beyond 80 percent of the general rate which, according the VRB’s decision is the appropriate rate since 18 October 2005. The Tribunal has considered the effect of Mr Cadd’s accepted disabilities and has determined that 80 percent of the general rate is an appropriate rate of pension with effect from this last-mentioned date. Mr Cadd submitted however that he is entitled to one of the earnings related rates of pension, that is the special rate or intermediate rate. It was suggested that his PTSD has been the cause of his inability to work.
4. Mr Cadd’s entitlement to pension at the special rate is to be determined under s 24 of the Veterans’ Entitlements Act 1986 (the VE Act). The Commission has acknowledged that since 18 October 2005 Mr Cadd has satisfied the first criterion of s 24 (a determination of entitlement to a pension at a rate higher than 70 percent of the general rate) and the second criterion (an incapacity from war-caused conditions of such a nature as, of themselves alone, to render him incapable of undertaking remunerative work for periods aggregating more than 8 hours per week). These criteria are contained in s 24(1)(a)(i) and s 24(1)(b) of the VE Act.
issues for determination
5. The issue for the Tribunal is whether Mr Cadd satisfies s 24(1)(c) of the VE Act, that is :
·whether he is, by reason of incapacity from his war-cased injuries alone, prevented from continuing to undertake remunerative work that he had been undertaking; and
·whether in consequence he is suffering a loss of wages or earnings on his own account which he would not be suffering if he were free of that incapacity.
6. It was suggested that satisfaction of the first limb of s 24(1)(c), could be determined through the assistance of what has been called the ameliorating provisions of s 24(2)(b). The Commission argued that Mr Cadd’s circumstances did not satisfy the requirements of s 24(2)(b) and that Mr Cadd could not satisfy the first limb of s 24(1)(c).
7. It was argued by the Commission that whether or not the Tribunal was satisfied that the first limb of s 24(1)(c) was established, Mr Cadd’s claim for entitlement to one of the earnings related rates of pension must fail as s 24(2)(a) (sometimes referred to as the disentitling provision) applied in this case as Mr Cadd had ceased to engage in remunerative work for reasons other than his accepted disabilities and that consequently he is deemed not to have suffered a loss of wages or earnings on his own account which he would not be suffering is he were free from his accepted incapacity. The submission was that Mr Cadd could not, in these circumstances, satisfy the second limb of s 24(1)(c).
legislation
8. Sub-sections 24(1)(c) and s 24(2)(a) and (b) of the VE Act relevantly provide as follows:
“24(1) This section applies to a veteran if:
…
(c)the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and
…
(2) For the purpose of paragraph (1)(c):
(a)a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if:
(i)the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or
(ii)the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; …”
(b)where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.”
If s 24(1) of the VE Act applies to Mr Cadd, he will be entitled under s 24(4) to a pension at the special rate therein provided.
background and evidence
evidence of mr cadd
9. Mr Cadd told the Tribunal that he had resigned from the Australian Army with the rank of major in 1985. He then took up employment with the Liquor Licensing Commission as a Gaming Inspector at the Adelaide Casino. He held this post for 5 years. In 1990 he commenced employment as the general manager of the South Lakes Golf Club. This involved managing the bar, club finances, catering and club membership. In 1993 Mr Cadd obtained a position as the general manager of the Flagstaff Hill Golf Club with similar duties to those undertaken at the South Lakes Golf Club. In 1998 he commenced duties as the general manager of the Marion Sports and Recreation Club (the Club). He was responsible for the bar, finances, gaming, catering, clubhouse redevelopment and liaison with the Marion Council.
10. Mr Cadd gave evidence that for some years prior to February 2003 he had been having difficulties with pathological gambling. He had been seeing a psychologist, Mr Tony Smith, for help with this problem.
11. Mr Cadd said that acting in his capacity as general manager, he had instructed the book-keeper at the Club to make some payments to him reflecting future entitlements to long service leave and, perhaps two weeks salary. Mr Cadd explained that he was called to a meeting of the Club’s executive committee on or about 28 February 2003. He said that at that time he was recorded in the Club’s debtor’s ledger as owing approximately $4,000 to the Club, reflecting the above-mentioned payments. Mr Cadd confirmed that he had a significant gambling problem at that time and that the executive committee had given him an ultimatum that if he did not resign, his services would be terminated. Mr Cadd said that it was in these circumstances that he resigned his employment with effect from 28 February 2003.
12. Mr Cadd said that on his cessation of employment, the Club offered to make a gratuitous payment reflecting approximately 4-5 weeks of wages. It was put to Mr Cadd that a then committee member, and now general manager of the Club, Mr Terry Zajer, had earlier provided evidence to the Tribunal to the effect that the Club had in effect offset the monies recorded in the debtors ledger as owing by Mr Cadd to the Club against the gratuitous payment offered by the Club on Mr Cadd’s resignation. Mr Cadd said that he was upset at the time and could not now be sure exactly what was said or what were the financial arrangements surrounding his cessation of employment with the Club.
13. Mr Cadd said that he advised his wife that he was no longer employed and within a few weeks had consulted a member of the Vietnam Veterans’ Federation and, after receiving advice from that person, had completed an application for acceptance of “anxiety/stressed” as war-caused. The application is dated 18 March 2003 and includes comments that Mr Cadd ceased work on 28 February 2003 as a result of his resignation and that his claimed disability had resulted in behavioural problems which in turn had resulted in “finishing work”.
14. Mr Cadd said that shortly after ceasing employment at the Club, he had discussions with a representative of the gambling section of the North Adelaide Football Club. He also said that he had a discussion with some other clubs.
15. Mr Cadd said that he made a number of job applications to various hotels and clubs, but was unsuccessful in achieving employment. Mr Cadd agreed that a number of his applications were for full-time positions and included advice from him that he was unable to work more than 8 hours per week.
16. Mr Cadd also indicated that he had discussions with a representative of the Department of Veterans’ Affairs in relation to securing a position within that Department, as a pensions adviser. He confirmed that he did not actually lodge an application for such a position.
17. Mr Cadd was referred to expert opinion evidence provided by Dr Marty Ewer. In a report dated 20 April 2005, Dr Ewer had opined that 70 percent of Mr Cadd’s impairment was due to his PTSD and 30 percent to his major depressive disorder (“which is in partial remission”). The same report indicated that Mr Cadd cannot work 8 hours per week because of his psychiatric problems which are service related. Mr Cadd said that he realised in April 2005 that he was unfit for any work. He said he was unsure when he arrived at that view, but later indicated that he now considers, with hindsight, that he had been unable to work since the date he resigned from the Club, that is from 28 February 2003. Mr Cadd confirmed that his application for Disability Pension signed on 18 March 2003 listed symptoms of “sleeplessness, mood swings, withdrawal, anxious and angry”. Mr Cadd also referred to conflict in dealing with the Marion Council and with members of the Club’s executive committee.
evidence of dr marty ewer
18. The applicant called Dr Ewer to provide evidence. Dr Ewer’s most recent report, dated 17 July 2007 (Exhibit A4), indicates that at least from this last-mentioned date, Mr Cadd has been suffering from chronic PTSD and that his other psychiatric problems were in remission. The history recorded in Dr Ewer’s report includes advice from Mr Cadd that he started to become depressed in 1996 and that in 1995 he had attended Gamblers Anonymous on three occasions.
19. Dr Ewer’s earlier reports were of major depression. His report dated 8 April 2004 includes the following comments on diagnosis:
“Mr. Cadd’s condition has worsened since my last report dated 5th August 2003. In my opinion Mr. Cadd is now suffering from a Major Depressive Disorder.
Mr. Cadd has some features of a Post-Traumatic Stress Syndrome but he does not meet the diagnostic criteria for a Post-Traumatic Stress Disorder.”
20. Dr Ewer’s report dated 20 April 2005 includes a diagnosis that Mr Cadd is still suffering from “a Major Depressive Disorder”. The report goes on to say that this condition has improved in response to treatment and is now in partial remission. The same report states that “Mr. Cadd has developed a number of additional symptoms and he currently fulfils the DSM-IV diagnostic criteria for the axis-1, psychiatric diagnosis of a Post-Traumatic Stress Disorder”.
21. Dr Ewer’s reports therefore record diagnoses of changing conditions. Dr Ewer’s report dated 8 April 2003 recorded diagnoses of pathological gambling and adjustment disorder with depressed mood. Dr Ewer’s report dated 5 August 2003 again records diagnoses of pathological gambling, this time in remission, and alcohol dependence in remission. The same report records some features of PTSD, but states that Mr Cadd does not satisfy the diagnostic criteria necessary for PTSD. Dr Ewer’s report of 8 April 2004 stated that Mr Cadd was suffering from a major depressive disorder. It also stated that Mr Cadd did not satisfy the diagnostic criteria for PTSD. It was not until his report of 20 April 2005 that Dr Ewer reported that Mr Cadd had developed a number of additional symptoms so that, as of 20 April 2005, Mr Cadd did satisfy the diagnostic criteria for PTSD. In his most recent report dated 17 July 2007 Dr Ewer addressed the issue of depression and its cause. He commented as follows:
“The aetiology of his depression is probably multifactorial. His longstanding alcohol misuse probably contributed to him becoming depressed. His gambling losses were another substantial cause of his depression. His marital disharmony was another substantial cause of his depression. It is also probable that the emerging Post-Traumatic Stress Disorder symptoms contributed to his depression.”
evidence of mr terry zajer
22. On 28 February 2003, the date Mr Cadd tendered his resignation, Mr Zajer was an executive committee member of the Club. Mr Zajer is now the general manager of the Club. Mr Zajer said that he had known Mr Cadd for a number of years and had served with him in the Army.
23. Mr Zajer said that around February 2003 it had been brought to his attention that Mr Cadd was on the Club’s debtors list. On enquiry, Mr Zajer said that he learnt that Mr Cadd had taken advanced leave payments from the Club and that he had been gambling at the Club.
24. Mr Zajer said that at a discussion with the executive committee of the Club, Mr Cadd confirmed that the recorded debts had been due to his gambling. He said that Mr Cadd then offered his resignation which was accepted.
25. Mr Zajer said that his best recollection of the quantum of the debt recorded in the debtors ledger for Mr Cadd was between $2,000 - $4,000. He said that Mr Cadd had explained that the debt had occurred mainly through gambling on Keno. Mr Zajer said that all of the debt recorded in the ledger related to entitlements which had not yet accrued. They would only accrue if Mr Cadd performed future work. Mr Zajer said that if Mr Cadd had wanted an advance against his salary or other entitlements, then he should have applied to the executive committee. He described what Mr Cadd did as inappropriate. He said that it was his understanding that Mr Cadd resigned his duties at the Club due to excessive gambling. Mr Zajer said that it was inappropriate for the general manager of the Club to gamble. Mr Zajer said that the Club decided to make a gratuitous payment to Mr Cadd and that his debt was offset again that payment.
consideration
26. In considering the application of s 24(1)(c) of the VE Act, the Tribunal refers first to the analysis of Branson J, with whom the other members of the Full Court of the Federal Court agreed, in Flentjar v Repatriation Commission (1997) 48 ALD 1 at 4.9. Her Honour said that a proper consideration of s 24(1)(c) required responses to the following four questions:
“1. What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the Act?
2. Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
3. If the answer to question 2 is yes, is the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?
4. If the answers to questions 2 and 3 are, in each case, yes, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his account that he would not be suffering if he were free of that incapacity?”
27. A determination of the responses to these questions entails an examination of the facts relevant to each question. Under s 120(4) of the VE Act, the Tribunal must decide these issues to its reasonable satisfaction, a standard which equates with proof on the balance of probabilities: Repatriation Commission v Smith (1987) 15 FCR 327. Neither party has an onus of proof (s 124(6) of the VE Act), and the Tribunal must act according to substantial justice, and the substantial merits of the case, without regard to legal form and technicalities (s 119(1)(g)).
28. The time at which the assessment under s 24(1)(c) is to be made is not the date when an applicant gave up work; the entitlement should be considered at the time of application to the primary decision-maker, and an assessment must be made of the rate of pension payable from time to time during the assessment period, being the period between the date when the application was lodged and the date when it is determined: ss 19(5C) and 19(9) of the VE Act; Repatriation Commission v Braund (1991) 23 ALD 591.
29. As regards the first question in Flentjar, the reference to “remunerative work which the veteran was undertaking” is to be read as a reference to the type of work which the veteran had previously undertaken, and not to any particular job: Re Banovich and Repatriation Commission (1986) 9 ALN N223. Accordingly, the loss of a particular job for reasons unrelated to the war-caused condition is immaterial: Doig v Repatriation Commission, Federal Court, 18 December 1996, 1106/1996. The remunerative work does not have to be the last work undertaken by the veteran (unless the veteran is over 65 at the time of a claim or application): Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225 per Fox J. Finally, the remunerative work must be substantial remunerative work which the veteran has effectively performed: Starcevich (supra) at 225; Sheehy v Repatriation Commission (1996) 66 FCR 569.
30. In this case the remunerative work that Mr Cadd was undertaking, within the meaning of s 24(1)(c) of the VE Act, was as suggested by his counsel, that of a club manager.
31. The second question in Flentjar is whether the applicant, by reason of his war-caused conditions, is prevented from continuing to undertake the type of work which the Tribunal has found is relevant. As mentioned, the Commission has conceded that s 24(1)(b) is satisfied. This sub-paragraph of s 24(1) requires an examination of the veteran’s capacity to undertake any remunerative work which the veteran is physically and mentally able to carry out; the test is not limited to the type of work previously undertaken or for which the veteran is qualified by training or experience: s 28 of the VE Act; Chambers v Repatriation Commission (1995) 55 FCR 9 at 19, per Moore and Sackville JJ. Further, the test requires an examination of all of the different kinds of work that a hypothetical person with the relevant skills and experience of the veteran might reasonably undertake: s 28(b) of the VE Act; Repatriation Commission v Buckingham, Federal Court, 7 February 1996, 37/1996. In this case, the expert opinion evidence of Dr Ewer is to the effect that at some stage during the assessment period, Mr Cadd’s accepted disability of PTSD would, of itself alone, prevent employment of more than 8 hours per week. The Tribunal so finds.
32. The third question in Flentjar refers to the “alone” test in s 24(1)(c). In the light of its findings in relation to question 4 of Flentjar it is unnecessary for the Tribunal to discuss this question.
33. The fourth question in Flentjar requires a consideration of whether the veteran suffering a loss of salary or wages or earnings on his own account he would not be suffering if he were free from the incapacity flowing from his accepted disabilities. This question must be considered by reference to s 24(2)(a)(i), which provides in effect that in order to suffer a loss of wages or earnings, a veteran must not have ceased to engage in remunerative work for some reason other than the veteran’s incapacity from war-caused conditions.
34. In Repatriation Commission v Smith (supra) Beaumont J, with whom Northrop and Spender JJ agreed, said at 337: “As has been said, the question posed by s 24(1)(c) is one of hypothetical facts. The Tribunal must attempt an assessment of what the respondent probably would have done if he had none of his service disabilities”.
35. In Repatriation Commission v Van Heteren (2003) 75 ALD 703 Finn J considered the relevance of the deeming provisions of s 24(2)(a)(i). His Honour said, at [25]:
“This question is not answered simply by finding that, in the assessment period, the veteran is unable to engage in any remunerative work. It in fact presupposes that he or she may well not be: cf 24(1)(b). And because of the deemed ‘no loss’ provisions of s 24(2)(a)(i) which apply where the veteran has ceased to engage in remunerative work for reasons other than his or her war-caused conditions, it requires an examination of the reasons why the veteran ceased work.”
36. In this case the expert medical opinion evidence provided by Dr Ewer was to the effect that the applicant was not suffering from PTSD at the time he resigned from work at the Club, that is in February 2003. Mr Cadd suggested that his resignation did not indicate that he had ceased to engage in remunerative work. It was argued that Mr Cadd had hoped to find other work and acted in accordance with that desire by lodging applications for employment. It was suggested therefore that although a reason other than the accepted disability of PTSD was the operative factor in causing Mr Cadd’s cessation of employment with the Club, he did not cease to engage in remunerative work at that time as he looked for other positions.
37. The Tribunal accepts that in some circumstances a person’s last date of work performance may not be considered the date he ceased to engage in remunerative work. It may be for instance that a person’s mode of employment might be to engage in a series of contracts with different principals. Simply because one contract comes to an end and another has not yet commenced does not mean that the person has ceased to engage in remunerative work.
38. Deputy President Jarvis commented in Re Smith and Repatriation Commission [2004] AATA 1223 at paragraph 41 as follows:
41. However, in my view it could not be said that Mr Smith had ceased to engage in remunerative work within the meaning of s 24(2)(a)(i) at the time when he was discharged from the RAAF. In applying this paragraph of the VE Act, the first step is to identify the time when the veteran has ceased to engage in remunerative work. As mentioned above, it is clear from the authorities that it is not appropriate under s 24(1)(c) to consider the cessation of particular employment with a particular employer. In my opinion, under s 24(2)(a) it is necessary to consider whether a state of affairs has been reached where it can be said that the veteran is no longer engaged in remunerative work. …”
The case of Re Smith is not on all fours with that of Mr Cadd. In Re Smith, Deputy President Jarvis found that Mr Smith had not ceased to engage in remunerative work following his dismissal from the RAAF. In that case Mr Smith later found other employment.
39. The Tribunal finds that Mr Cadd had been engaged as a manager of the Flagstaff Hill Golf Club from March 1994 until December 1998 and then as a manager of the Marion Sports and Community Club from December 1998 until he resigned that position in late February 2003. The Tribunal has considered all of the medical evidence contained in the material. Dr Ewer has been the psychiatrist who has reported on Mr Cadd’s psychiatric state since his year of resignation from the Club and who has provided the most recent report, in 2007. The Tribunal has had the benefit of these reports, together with the oral evidence provided by Dr Ewer. Where Dr Ewer’s opinions differ from the opinions of other doctors contained in the material, the Tribunal prefers the evidence of Dr Ewer. On Dr Ewer’s evidence, the Tribunal finds that in 2003, the year Mr Cadd resigned from the Club, his psychiatric symptoms were not such as to allow a diagnosis of PTSD to be made. The diagnoses made by Dr Ewer in 2003 were, in April, pathological gambling and adjustment disorder with depressed mood and in August, again pathological gambling, this time in remission, together with adjustment disorder with depressed mood and alcohol dependence, also in remission.
40. The Tribunal notes that Mr Cadd had never found employment after he resigned from the Club in February 2003. The Tribunal notes Mr Cadd’s oral evidence that he now considers that he has been unfit for any employment since his resignation from the Club.
41. The Tribunal has considered Mr Cadd’s evidence to the effect that he attempted to find employment after his resignation from the Club. However, on balance, the Tribunal finds that with effect from 1 March 2003, that is the day after Mr Cadd resigned his employment with the Club, Mr Cadd had “ceased to engage in remunerative work”. The effect of this finding is that, pursuant to s 24(2)(a) of the VE Act, Mr Cadd is deemed not to satisfy the second limb of s 24(1)(c), that is he shall not be taken to be “suffering a loss of salary or wages, or of earnings on his or her own account” by reason of his incapacity from accepted disabilities. In these circumstances, regardless of any conclusion this Tribunal may have reached in relation to step 3 of Flentjar, the Tribunal is reasonably satisfied that Mr Cadd does not satisfy the fourth step of Flentjar. The Tribunal is satisfied that s 24(1)(c) of the VE Act is not satisfied and consequently Mr Cadd does not qualify for payment of pension at the special rate. For the same reasons, Mr Cadd does not satisfy requirements for the immediate rate of pension (s 23 of the VE Act).
The decision under review is affirmed.
I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J G Short (Member)
and Professor P Reilly AO (Member)Signed: .....................................................................................
AssociateDates of Hearing 21 September 2007 and 10 December 2007
Date of Decision 25 January 2008Solicitor for the Applicant Mr S Swan
Swan Lawyers
Advocate for the Respondent Mr A Crowe
DVA
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