Carnes and Repatriation Commission (Veterans’ entitlements)

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Carnes and Repatriation Commission (Veterans’ entitlements) [2016] AATA 460 (1 July 2016)

Division

VETERANS’ APPEALS DIVISION

File Number

2015/1786

Re

Donald Carnes

APPLICANT

And

Repatriation Commission

RESPONDENT

DECISION

Tribunal

Miss E A Shanahan, Member
Date 1 July 2016
Place Melbourne

The Tribunal sets aside the decision under review and substitutes its decision that Mr Carnes qualifies for payment of the disability pension at the special rate. 

The Tribunal further remits the matter to the respondent to calculate the date from which Mr Carnes became eligible to receive payment at the special rate.

...................................[sgd].....................................

Miss E A Shanahan, Member

VETERANS’ AFFAIRS – Vietnam Veteran – claim for increase in disability pension – special rate – over 65 at date of application – non war-caused condition – alone test of s 24(1)(c) satisfied – decision set aside and substituted.

Legislation

Veterans’ Entitlement Act 1986

Cases

Repatriation Commission v Richmond (2014) 226 FCR 21
Richmond v Repatriation Commission (2014) 140 ALD 380
Grant v Repatriation Commission (1999) 57 ALD 1
Repatriation Commission v Haskard (2002) 126 FCR 1
Repatriation Commission v Connell (2011) 197 FCR 228
Re Repatriation Commission and Thorpe [2011] AATA 491
Smith v Repatriation Commission (2014) 220 FCR 452
Owen v Repatriation Commission (1995) 59 FCR 93
Flentjar v Repatriation Commission (1997) 48 ALD 1
Repatriation Commission v Watkins (2015) 228 FCR 573
Summers v Repatriation Commission (2015) 145 ALD 30
Beezley v Repatriation Commission (2015) 150 ALD 11

REASONS FOR DECISION

Miss E A Shanahan, Member

1 July 2016

  1. Mr Carnes qualified and has been in receipt of a Department of Veterans’ Affairs (DVA) disability pension at 80 per cent of the general rate since 31 May 2013. On that date, it was accepted that he had a lifestyle rating of four.

  2. Mr Carnes was conscripted into the Australian Army (the Army) in 1967 and served as an infantryman in Vietnam for a period of 12 months between 1968 and 1969. He has the accepted war-caused conditions of chronic back strain, sensorineural hearing loss, lumbar spondylosis and tinnitus. His chronic back strain has been accepted as war-caused since 12 July 1969.

  3. Mr Carnes lodged a claim for an increase in disability pension on 31 May 2013. On 10 October 2013, a delegate of the Repatriation Commission (the Commission) rejected the claim. The delegate had calculated Mr Carnes’ medical impairment rating as 43 points and his lifestyle rating was four. Based on these figures, his degree of incapacity was calculated to be 80 per cent.

  4. As Mr Carnes’ incapacity was greater than 70 per cent, the delegate considered Mr Carnes’ eligibility for the special and intermediate rate of pension. Both were rejected on the basis that Mr Carnes’ income from Carnes Rural Fencing had in 2013 increased compared to preceding years and as a result Mr Carnes did not satisfy s 24(1)(c) of the Veterans’ Entitlement Act 1986 (the Act), despite a considerable reduction in his hours of employment. He was found not to be suffering a loss of earnings…

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Details
Case
[2016] AATA 460
Decision Date

CaseChat Overview and Summary

The Administrative Appeals Tribunal considered a claim by Mr Carnes for an increase in his disability pension under the *Veterans’ Entitlements Act 1986* (Cth). The dispute centred on whether Mr Carnes satisfied the "alone test" as prescribed by section 24(1)(c) of the Act, or its equivalent for those over 65, section 24(2A)(d). The Repatriation Commission was the respondent.

The primary legal issue before the Tribunal was to determine if Mr Carnes was prevented from continuing his last remunerative work solely by reason of a war-caused injury or disease. This involved an examination of the meaning of "prevented" and the application of the "alone test" in the context of Mr Carnes' circumstances, including his age and the nature of his work and incapacity. The Tribunal noted that if Mr Carnes satisfied this test, the Commission conceded that he had suffered a loss of earnings and that other requirements of section 24(2A) would be met.

The Tribunal applied the principles established in *Flentjar v Repatriation Commission* and elaborated upon in subsequent Federal Court decisions, particularly *Repatriation Commission v Richmond*. These authorities clarify that the "alone test" requires the war-caused condition to be the sole factor preventing the veteran from continuing their last remunerative work. If any non-war-caused factor contributes to preventing the veteran from working, even if it is of secondary weight, the alone test will not be satisfied. The Tribunal considered the evidence regarding Mr Carnes' physical limitations due to his lumbar spondylosis and chronic back strain, as well as a shoulder injury, and the extent to which these conditions, both war-caused and non-war-caused, impacted his ability to perform his previous work as a farmer and in his fencing business.

The Tribunal set aside the decision under review and substituted its own decision, finding that Mr Carnes qualified for payment of the disability pension at the special rate. The matter was remitted to the Repatriation Commission to calculate the date from which Mr Carnes became eligible to receive payment at this special rate.

Orders

Orders of the court

The Tribunal sets aside the decision under review and substitutes its decision that Mr Carnes qualifies for payment of the disability pension at the special rate.

The Tribunal further remits the matter to the respondent to calculate the date from which Mr Carnes became eligible to receive payment at the special rate.

Background

Background to the litigation

The parties agreed that the only issue before the Tribunal was whether Mr Carnes satisfied the so called alone test of s 24(2A)(d) of the Act. BACKGROUND TO THE APPLICATION Mr Carnes completed Year 10 and thereafter worked as a shearer and jackaroo. In 1967, at the age of 20 he was conscripted into the Army. For a period of 12 months from 1968 to 1969 he served as an infantryman in Vietnam. During this period he was required to lift extremely heavy weights on a daily basis. Following his operational service Mr Carnes returned to work as a shearer but found this work too strenuous, with it resulting in back pain with paraspinal muscle spasms. He entered into partnership with some relatives as a garage operator where his duties were limited due to his lack of training and his back pain. He did not perform mechanical repairs, other than to damaged window screens. Mr Carnes eventually sold his share in the garage and in 1984 purchased 320 acres of land at Stoneleigh. The name of this area reflects the nature of the terrain. Since 1984 Mr Carnes and his wife, Mrs Susan Carnes, have operated the property rearing merino sheep, both for their wool and meat, as the partnership DJ and SA Carnes. They have purchased further adjacent land and their property now extends over an area of 623 acres and carries 1200 sheep (i.e. two sheep to the acre). Since their purchase of the property, Mr Carnes has not performed any activities involving heavy physical labour. While in the early days he undertook activities such as crutching and drenching of sheep, sowing pasture, cutting and carting hay and other less intense activities around the property, these have reduced greatly. The farm has functioned with the help of hired part time workers, with Mrs Carnes being increasingly responsible for both the farm supervision and the keeping of financial records. In the year 2000 Mr and Mrs Carnes commenced providing fencing work in the area. In 2004, Mr and Mrs Carnes registered the company Carnes Rural Fencing Pty Ltd. This business involved Mr Carnes attending sites, measuring with the assistance of his wife, providing quotations, ordering material and engaging contract labour to construct fences. Mrs Carnes undertook all the bookwork and also performed some site supervision. The fencing business was financially very successful and expanded until it was possible to employ two full time workers as well as casual labourers as required. The two full time workers, when not busy with fencing contracts, provided services on the sheep property. This amounted to approximately 20 per cent of their workload. The accounting statements provided suggest that the fencing company was the major source of the Carnes’ income. Mrs Carnes gave evidence that from 2013 onwards, Mr Carnes’ back and buttock spasms became more severe and more frequent. One of these spasms resulted in him being immobilised on the floor of a passageway in their home. She was unable get past Mr Carnes and had to call an ambulance.

Evidence

Evidence Before The Court

Mr Carnes pays his hired farm workers, all of whom are neighbours, $25.00 per hour. The shearers, who are unionised, charge normal rates. His hay baling is done by a neighbouring farmer, as is the mowing of pastures. Another neighbour does all the sheep drenching. This neighbour owns a mobile drencher in the form of a semitrailer with a huge dip that can dunk 30 sheep at a time. EVIDENCE BEFORE THE TRIBUNAL Mr and Mrs Carnes’ evidence is summarised under background to the application. Dr Clayton Thomas Dr Clayton Thomas is an occupational health and pain management physician who saw Mr Carnes on 5 June 2015 at the request of Williams Winter Solicitors. Dr Thomas obtained a history of progressively increasing lower back pain radiating to the left buttock and to the left thigh, occurring at approximately 150 metres and particularly when walking on uneven ground. This had resulted in Mr Carnes doing little in the way of physical work on both the merino sheep farm and in his fencing company. Walking at these worksites aggravated his back pain. On physical examination, Dr Thomas recorded limitation of back movement in all directions with most movement occurring through his hips. Mr Carnes’ right shoulder, injured in 2013, remained moderately stiff with reduced power and shoulder movements. The wrist, hand and elbow were normal. Dr Thomas was of the opinion that Mr Carnes was markedly disabled as a result of his lumbar spondylosis and chronic back strain and concluded that this prevented him from performing his normal pre-injury work duties as a farmer. His work capacity for farming was now to less than eight hours per week. Dr Thomas did not think that the right shoulder injury in and of itself would preclude Mr Carnes from working as a farmer. Mr Carnes was assessed as being able to perform normal functions, except for those above shoulder height. In his oral evidence before the Tribunal, Dr Thomas affirmed the content of his report and his conclusion that Mr Carnes’ right shoulder condition would only impact on his work capacity if he was involved in unrestricted farm physical activities. For example, Mr Carnes would not be able to do crutching or fencing because of his shoulder, but could certainly move sheep and drive a utility.Dr Robyn Horsley Dr Horsley is also an occupational health physician. She saw Mr Carnes at the request of the DVA on 6 August 2015. In the history recorded by Dr Horsley, it was noted that Mr Carnes said that neither he nor his wife performed any physical work in the fencing business. He had attended farm sites, provided quotes, sourced materials and engaged contract labour and went out in the morning and set up equipment. Dr Horsley also obtained detailed information regarding the employment of contract labour, which it was noted usually involved neighbours. Dr Horsley recorded that in November 2013, Mr and Mrs Carnes ceased the fencing business and handed it over to one of their employees without the exchange of any money.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Several other Federal Court and AAT decisions were referred to, none of them having any factual similarities to Mr Carnes matter. TRIBUNAL’S DELIBERATIONS The Tribunal agrees with the parties that the only issue before it is whether Mr Carnes satisfies the alone test as required by s 24(1)(c) of the Act or in his case, given his age, s 24(2A)(d) of the Act. Mr Rudge has conceded that should the Tribunal find that Mr Carnes does satisfy these sections of the Act, the Commission would concede that he has suffered a loss of earnings on his own account and would also concede that other requirements of s 24(2A) of the Act have been satisfied. In Flentjar v Repatriation Commission (1997) 48 ALD 1 at 5, the Full Court of the Federal Court set out four questions that should be considered in apply s 24(1)(c) of the Act. These were: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 own account that he would not be suffering if he were free of that incapacity? Since Flentjar was decided in 1997, the Federal Court has considered, at some length, the terms prevented and the phrase last remunerative work. The decisions at first instance of Dodds-Streeton J in Richmond v Repatriation Commission and that on appeal of the Full Court of the Federal Court in Repatriation Commission v Richmond in 2014 have provided elucidation of these areas of dispute. The interpretation of the alone test in Richmond has been accepted and followed in the decisions of Repatriation Commission v Watkins (2015) 228 FCR 573, Summers v Repatriation Commission (2015) 145 ALD 30 and Beezley v Repatriation Commission (2015) 150 ALD 11, all of which were determined in 2015. As noted above, in Repatriation Commission v Richmond the Full Court of the Federal Court held at 30:... if there is a non-war-caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing, the alone prevented test will not be satisfied. The Full Court further held at 38:… the ordinary meaning of “prevented“ in s 24(1)(c) is unambiguous and there is no requirement to use other words or expressions. … On a plain English approach to the provision we do not consider that a veteran is “prevented from” engaging in remunerative work by the veteran’s voluntary or elective decision to cease work for a reason other than incapacity.