Carnes and Repatriation Commission (Veterans’ entitlements)
[2016] AATA 460
•1 July 2016
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 11REASONS FOR DECISION
Miss E A Shanahan, Member
1 July 2016
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.
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.
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.
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 as a result of his incapacitating condition.
Mr Carnes requested a review of this decision by the Veterans’ Review Board (VRB). On 12 February 2015, the VRB affirmed the decision, finding that Mr Carnes did not satisfy s 24(2A)(e) of the Act as he had not suffered a loss of salary or wages or earnings as a result of his war-caused medical conditions. Mr Carnes lodged a further application for review by the Administrative Appeals Tribunal on 15 April 2015.
Mr Carnes was represented by Ms Fiona Ryan of counsel, instructed by Williams Winter Solicitors. Mr Ken Rudge, a solicitor in the employ of the Department of Veterans’ Affairs appeared for the Commission. The Tribunal was provided with documentation lodged by the respondent in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 (the T-documents) and numerous further reports and exhibits were tendered by both parties. A list of the exhibits is appended to this decision. Mr Carnes, Mrs Carnes, Dr Clayton Thomas and Dr Robyn Horsley gave evidence before the Tribunal.
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.
Mr Carnes also complained of continuing back pain and was limited to driving for 20 minutes before he needed to get out and stretch. His constant pain had an effect on his mood, which in turn irritated their employees. Mrs Carnes has regularly accompanied her husband in all farm activities over the last three to four years in order to keep an eye on him and help where she could.
Over the past 12 or more months, Mr Carnes has reduced his farming activities to less than eight hours per week. In the summer months, Mr and Mrs Carnes would drive around the property checking the water levels in the sheep’s troughs daily. In the winter, such checking would be done perhaps twice a week. When problems with the water troughs were encountered, Mrs Carnes would clear any obstructions. Mr Carnes is able to operate a grain feeder from inside his utility vehicle, but Mrs Carnes has prohibited him from using a baler as it makes his back much worse.
Currently, Mr Carnes feeds the sheep using the grain feeder once a month and usually checks the water levels by himself once a fortnight. Mrs Carnes had not observed any increase in difficulty with any of these manoeuvres since Mr Carnes’ right shoulder injury and surgery. Mr Carnes remains able to assess the state of the sheep which he does from the front seat of his utility truck and advise when drenching is necessary. The family is assisted greatly by their neighbours. When Mr Carnes is unwell, neighbours perform any necessary tasks at no charge.
In January 2013, Mr Carnes re-laid some 24 square meters of brickwork in front of the farmhouse over several days. Mrs Carnes arranged the bricks and Mr Carnes lined them up. Mrs Carnes, according to her evidence, basically provided all physical labour. Mr Carnes had no recollection of these events of January 2013. Mrs Carnes’ recollection was limited. She did not recall Mr Carnes complaining of shoulder symptoms in January 2013.
The treating general practitioner’s clinical notes record Mr Carnes attending the Beaufort Medical Practice on 18 January 2013 for problems with his right shoulder. These problems were of one month’s duration, Mr Carnes having become symptomatic two weeks after laying pavers. The symptoms elicited were pain at night and on raising his arm. Physical examination confirmed pain on elevating the right arm and the treatment prescribed was heat, Panamax and an anti-inflammatory medication. At a follow-up appointment on 14 February 2013, Mr Carnes was still experiencing some right shoulder pain. An ultrasound was arranged. A plain x-ray of the right shoulder did not reveal any abnormality, but the ultrasound showed a slight increase in the echogenicity of the supraspinatus tendon but no tear or calcification. The sub-acromial bursa was thickened.
On 2 March 2013, while walking around the farm paddocks, Mr Carnes experienced a back spasm, lost his balance and fell onto his right shoulder. He was seen by his general practitioner Dr Ravindranayagam on 4 March 2013. The entry in the clinical records notes the fall with Mr Carnes landing on his right shoulder. Mr Carnes presented with very limited shoulder movement and severe pain. Physiotherapy, intra-articular steroid injections and analgesics were prescribed. By 2 May 2013 the right shoulder pain was worse and a further intra-articular steroid injection was arranged.
Mr Carnes continued to attend his general practitioner at fortnightly intervals. A severe bout of back muscular spasm resulted in his hospitalisation on 15 June 2013 for 5 days for pain control. He remained on Tramadol thereafter. On 29 July 2013 Mr Carnes reported that his shoulder pain was not getting any better. He was then referred to an orthopaedic surgeon. An ultrasound of the right shoulder prior to this referral revealed a large joint effusion and a full thickness tear of the supraspinatus tendon measuring 20 by 28 millimetres. Mr Carnes was subsequently seen by Mr Paul Plank, an orthopaedic surgeon, who recommended surgical repair given the severity of Mr Carnes symptoms and his very minimal active movement of the shoulder joint.
Surgery was undertaken on 2 September 2013. This involved an acromioplasty and bursectomy of the sub-acromial bursa performed arthroscopically. The supraspinatus tendon was repaired using four suture anchors. Post-operatively, Mr Carnes range of shoulder movement has been limited in all directions. He is still able to use tools, provided they are stored at a low height and his use of them is not above shoulder level. Mr Carnes agreed that he could not do any crutching or shearing because of his right shoulder injury, but said that he had not performed these tasks for many years because of his back symptoms.
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.
In relation to the chronic back strain and lumbar spondylosis, Dr Horsley estimated that Mr Carnes’ functional tolerance for sitting was 30 to 45 minutes, standing was 15 minutes, walking was 150 metres and driving was 30 to 45 minutes. Mr Carnes tolerances were further reduced in terms of stairs and hills, particularly when descending. Dr Horsley recorded that Mr Carnes was fearful in crowds and with large flocks of sheep, because of the risk of being knocked and incapacitated with a back spasm.
Dr Horsley detailed Mr Carnes’ right shoulder symptoms including the minor injury in early January 2013 and the major injury in March 2013. When seen, Mr Carnes denied any pain in his shoulder but did admit to a persistent reduction in the range of movement and some reduction in strength. Mr Carnes told Dr Horsley that he avoided activities above shoulder height.
On examination the previously reported findings in the lumbar spine were confirmed, with a reduction in the range of movement to approximately half of normal. Sensation was abnormal in the lateral aspect of the left thigh and ankle reflexes were absent bilaterally, with knee reflexes reduced. Dr Horsley recorded a reduction in Mr Carnes’ upper arm circumference on the right compared to the left, the right being 30 centimetres and the left 32 centimetres. Mr Carnes’ forearm circumference on the right was 27 and on the left 26.5 centimetres, which is what would be expected in a man who was right hand dominant. The range of movement of the right shoulder was moderately reduced, in particular external rotation. Mr Carnes was assessed at having a 20 kilogram grip force in his left hand and 24 kilogram grip force in his right hand.
Dr Horsley concluded that working as a shearer, fencer and farm labourer were now beyond Mr Carnes’ capacity. He was restricted to only light farming duties. She regarded his activities as being of an overseeing non-commercial manner and agreed that his back condition prevented him from working for more than eight productive hours per week in a farming environment on a permanent basis. Dr Horsley considered that his right shoulder disability may have an impact in that it would limit his lifting to 10 kilograms. Dr Horsley recommended that Mr Carnes avoid the use of vibratory equipment, repetitive pushing and pulling, overreaching and above shoulder height work. Such restrictions would impact on labouring, shearing and fencing work.
However, Dr Horsley considered the back condition to having increasingly reduced the physical component of his ability to work prior to his shoulder injury. She concluded that Mr Carnes was not working productively, but instead pottered around his farm and inspected it.
In her evidence before the Tribunal and during cross-examination by Ms Ryan, Dr Horsley agreed that the work restrictions she had assessed in relation to the right shoulder condition would not impact on the work Mr Carnes had been doing before sustaining that injury. Dr Horsley agreed that the condition wold not impact work of fencing and would probably not have any impact on his ability to drive around in his utility. Dr Horsley concluded that in other activities he could adapt his right arm use to counteract the reduction in his shoulder range of movement. The impact she did consider could be relevant was a need to fix something immediately as, in her experience, such immediate action would give rise to pain.
The Tribunal notes that Mr Carnes denies having any pain in his right shoulder since his surgery. In answer to a question from the Tribunal as to whether using a drill, which Mr Carnes said he was doing, or pulling on a rope to release feed for the sheep would impact on the right shoulder, or alternatively would be a restriction on any activity with the right shoulder, Dr Horsley considered both activities inadvisable due to the underlying shoulder pathology, but not precluded.
DOCUMENTARY EVIDENCE BEFORE THE TRIBUNAL
The Beaufort Medical Practice clinical notes relating to Mr Carnes have been provided to the Tribunal and the relevant notes have been referred to under background to the application. The notes confirm Mr Carnes’ ongoing back pain, severe muscle spasms, two admissions to hospital in Ballarat for back pain control and the right shoulder pathology and surgery. The treating general practitioner Dr Ravindranayagam had provided treating doctor reports accompanying Mr Carnes’ applications and claim forms for an increase in pension.
Report from Dr Blair Christian
The DVA obtained an opinion from Dr Blair Christian, a consultant occupational physician, who saw Mr Carnes on 11 November 2014. Dr Christian obtained the known history and the information that Mr Carnes had ceased work in the fencing business in 2012. Dr Christian recorded that in the most recent years the heaviest work Mr Carnes had done was the pressing of levers.
Dr Christian concluded that Mr Carnes needed to avoid work roles involving medium or heavy physical activity, long standing, walking or sitting and frequent bending, lifting or twisting. Stair work and ladder work were also to be avoided. He concluded that Mr Carnes could work for four hours per day in a suitable role such as light office work. Dr Christian did acknowledge that Mr Carnes had never worked in such a role.
Financial Data and Taxation Returns
The Tribunal was provided with Mr Carnes and the various businesses’ financial data and taxation returns for the period 2010 to 2012 inclusive. These are not considered in detail given concessions later made by the respondent.
RELEVANT LEGISLATION
Section 13 of the Act provides that the Commonwealth is liable to pay a pension where a Veteran has become incapacitated from war-caused injury or war-caused disease.
Section 14 of the Act provides that a Veteran may make a claim for a pension. Section 15 of the Act provides that a Veteran who is receipt of a pension may make an application for an increase in the rate of the pension:
Section 19(9) of the Act states that the assessment period for a pension commences on the day on which a claim or application is received and ends on the day when the claim or application is determined.
Section 24 of the Act relates to special rate of pension and states:
24 Special rate of pension
(1)This section applies to a veteran if:
(aa)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
(aab)the veteran had not yet turned 65 when the claim or application was made; and
(a)either:
(i) the degree of incapacity of the veteran from war caused injury or war caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
(ii) the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and
(b)the veteran is totally and permanently incapacitated, that is to say, the veteran’s incapacity from war caused injury or war caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and
(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
(d)section 25 does not apply to the veteran.
(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; and
(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.
Section 24, subsections 2A(a) and 2B are most relevant to this application, as Mr Carnes had turned 65 before his application was made. These state:
(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 application 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.
(2B)For the purposes of paragraph (2A)(e), a veteran who is incapacitated from war caused injury or war caused disease or both, is not taken to be suffering a loss of salary or wages, or of earnings on his or her own account, because of that incapacity if:
(a)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
(b)the veteran is incapacitated, or prevented from engaging in remunerative work for some other reason.
SUBMISSIONS
The Applicant
Ms Ryan submitted that Mr Carnes had satisfied ss 24(1)(a) and (b) of the Act, but had not been found to satisfy s 24(1)(c). Given that Mr Carnes was 66 at the time of his original application, Ms Ryan submitted that s 24(2A) had been attracted and the Commission had found that 2A(d) and (e) were not satisfied. Ms Ryan characterised the respondent’s argument as being that that Mr Carnes right shoulder injury, incurred in 2013, prevented him from engaging in remunerative work as did his lumbar spondylosis. As both contributed to Mr Carnes’ inability to work, the alone test found in s 24(1)(c) of the Act was not satisfied.
Ms Ryan submitted that Mr Carnes right shoulder condition and subsequent surgery had no effect on his capacity for work. Mr Carnes had always only done light work, being precluded from doing any physically demanding work by his back problems. There was no essential part of his occupation that involved right shoulder movement or power. Ms Ryan conceded that Mr Carnes right shoulder condition would impact on hard work and this had been supported by Dr Thomas’s opinion. Ms Ryan noted that although Dr Horsley had initially opined that the shoulder condition was a preventative factor, she had conceded that in light of the work actually done, any impact might be confined to getting in and out of his utility vehicle.
Ms Ryan contended that, should the Tribunal find that Mr Carnes’ right shoulder condition did impact on his capacity for work, it was not independent of his back condition. Ms Ryan submitted that the fall of 2 March 2013, resulting from an episode of severe muscular paraspinal spasm and left buttock pain, converted what had previously been minor tendinosis in the supraspinatus tendon to a large tear of this tendon. In support of this contention Ms Ryan cited the decision of Dodds-Streeton J in Richmond v Repatriation Commission (2014) 140 ALD 380, where at 397 Her Honour said:
However, a factor which prevents or contributes to preventing the veteran from continuing to undertake the remunerative work, but is itself the consequence of the veteran‘s war-caused condition, will not constitute an independent preventative factor for purposes of defeating the “alone” requirement in s 24(1)(c).
In relation to considerations that go to whether a condition prevents work and the meaning of the term prevents Ms Ryan cited the subsequent Full Court decision in Repatriation Commission v Richmond (2014) 226 FCR 21 wherein the Full Court, considering the decision of Dodds-Streeton J, 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 found the ordinary meaning of the word prevent was unambiguous. It agreed with Dodds-Streeton J’s interpretation of the word prevented as defined in the Concise Oxford dictionary and the Macquarie dictionary as meaning to hinder, stop or preclude.
With respect to s 24(2A) of the Act, Ms Ryan submitted that Mr Carnes satisfied ss 24(2A)(a) and (b), having turned 65 in 2012, and as a corollary s 24(1)(a) and (b). Ms Ryan further contended that Mr Carnes satisfied ss 24(2A) (f) and (g), having worked as a fencing contractor for more than 10 years continuously. Most importantly, Ms Ryan submitted that Mr Carnes satisfied s 24(2A)(d) as it was his war-caused condition of spondylosis and lumbar back strain alone that prevented him from continuing to undertake the remunerative work of a fencing contractor. If he was still continuing to do any farm work, his capacity was strictly limited to less than eight hours per week.
The Respondent
Mr Rudge submitted that the only issue for the Tribunal to determine was whether s 24(2A)(d) of the Act was satisfied, which states:
(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 ...
Mr Rudge agreed that this was the relevant section of the Act given Mr Carnes was 66 when he lodged his claim. Mr Rudge on behalf of the Commission submitted that if the Tribunal determined that s 24(2A)(d) of the Act was satisfied, the Commission would concede the other requirements, including the requirement that Mr Carnes was suffering financial loss.
Mr Rudge drew the Tribunal’s attention to the Full Federal Court decision in Grant v Repatriation Commission (1999) 57 ALD 1 which addressed work that was undertaken as referred to in s 24(2A)(d) as being work that was last undertaken before making the claim. Mr Rudge also referred to a long line of decisions of the Federal Court relating to the meaning of the term prevented as addressed in Repatriation Commission v Haskard (2002) 126 FCR 1, Repatriation Commission v Connell (2011) 126 FCR 1 and Re Repatriation Commission and Thorpe [2011] AATA 491.
Mr Rudge contended that the work undertaken by Mr Carnes prior to his application was that of a fencing contractor and also as a sheep farmer. Mr Rudge contended that Mr Carnes’ activities as a sheep farmer continued. It was agreed that for the past five years Mrs Carnes had performed or overseen most of the farming work. Mr Rudge contended, however, that Mr Carnes still performed some ordering and hiring, although his total involvement may be less than eight hours per week.
With respect to the alone test Mr Rudge cited the decisions of the Federal Court in Richmond v Repatriation Commission and the Full Court of the Federal Court in Repatriation Commission v Richmond, wherein the Full Court agreed with Buchanan J’s explanation of the test in Smith v Repatriation Commission (2014) 220 FCR 452 at 465 – 466:
The overall effect of s 24(1)(c) may be summarised as one which requires a demonstrated loss of earnings as the direct result of the war-related incapacity, and only for that reason.
Mr Rudge relied on Dr Horsley’s report, given her more detailed medical history compared to that of Dr Clayton Thomas and her findings of wasting of the right shoulder with a reduced range of movement. Mr Rudge submitted that the right shoulder injury did contribute to Mr Carnes’ incapacity for work, even if it was only of secondary importance. Mr Rudge referred to the decision of Finn J in Owen v Repatriation Commission (1995) 59 FCR 93, wherein Mr Owen had claimed that his shoulder had been injured as a result of his war-caused back injury. As Mr Owen’s shoulder condition was not part of his original claim, Finn J found that the shoulder condition was not to be considered in the claim and should be the subject of a separate new claim.
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.
On the evidence before the Tribunal it is clear that Mr Carnes has been a sheep farmer/grazier since 1984. He also operated a fencing business from 2000 to December 2013. The sheep farming under the partnership of Mr Carnes and his wife continues with Mrs Carnes performing the vast majority of any work, be it physical or administrative, but does not make a profit as they run only 1200 sheep on 632 acres. The Carnes’ earnings were primarily derived from Carnes Rural Fencing Pty Ltd. Mr Carnes had undertaken both of these occupations for a period of greater than 10 years.
It would appear on the evidence before the Tribunal that from some time in the 1980s until the present, Mr Carnes has been incapable of undertaking the physically demanding work of farming and fencing because of his accepted war-caused lumbar spondylosis and particularly his episodic severe muscle spasms in the right paravertebral area and right buttock. The muscle spasms have required several admissions to hospital for pain control and ongoing regular physiotherapy treatment as well as medication, including Valium used as a muscle relaxant.
Mr and Mrs Carnes have been forced to employ farm labour in order to conduct both businesses. In terms of Carnes Rural Fencing Pty Ltd, they had employed two full time local workers who, in accordance with demands for fencing, were able to spend 20 per cent of their time assisting in with sheep farming. Mr Carnes’ activities were limited to quoting for any fencing orders, which would entail measuring various sites. Mrs Carnes assisted with this activity and was responsible for all administrative work. Mr Carnes undertook the ordering of supplies and equipment and supervised work undertaken where necessary. It would appear that his supervision, in most instances, was reduced to discussing the completed project with the owners and ascertaining that they were happy with the result. It does not appear to have involved him in actually inspecting the completed work on many occasions.
In June 2013, Mr Carnes was hospitalised for five days for severe unremitting back pain and was discharged home on increased medication including Tramadol, OxyContin, non-steroidal anti-inflammatories and Panadol. He and his wife subsequently decided to cease operating the fencing company, and did so in November 2013. This resulted in their two full time employees no longer being employed in either the fencing or the sheep farming. Mr and Mrs Carnes reduced their flock of merino sheep to 1200 and as a result do not make a profit from the farming.
In accordance with the s 24(2A)(d) of the Act and the Full Court decision in Repatriation Commission v Richmond, this Tribunal must consider whether Mr Carnes had a condition that was non war-caused and prevented or contributed to the prevention of him continuing to undertake the relevant remunerative work, even if it was only of secondary weight. There is no question that Mr Carnes ceased work for any reason other than his physical incapacity.
Based purely on the medical reports the Tribunal determines that Mr Carnes ceased remunerative work because of his back pain and its underlying pathology alone. While Mr Carnes did suffer an injury to his right shoulder in 2013, the severity of which was increased by a fall secondary to a severe back muscular spasm, the Tribunal is satisfied that the shoulder injury in no way prevented or contributed to preventing him from undertaking the remunerative work of fencing contracting.
The Tribunal rejects the opinion of Dr Christian, occupational physician, who suggested that Mr Carnes might be capable of part time work in a sedentary clerical position. Mr Carnes’ only work experience has been as a jackaroo, a shearer, a sheep farmer and a fencing contractor. Throughout his entire working life following his marriage in 1969, Mrs Carnes has done all the clerical and administrative activities of all the businesses in which they have been involved. Mr Carnes’ sitting, standing and walking times are all substantially limited according to Dr Horsley and would impact on any such employment, even if Mr Carnes had any relevant experience.
Dr Clayton Thomas assessed Mr Carnes on the basis of the history given. This was that Mr Carnes was limited to performing only light jobs around the farm and that this had been the case for many years. Given Mr Carnes’ level of involvement in the physical aspects of farming and fencing, Dr Thomas was of the opinion that the shoulder condition had no impact or made any contribution to preventing Mr Carnes continuing to undertake the same level of fencing and sheep farming at which he had performed these tasks since at least the year 2000. Dr Thomas concluded that had Mr Carnes been involved in physically unrestricted farming and fencing, his right shoulder injury would have had an impact.
Dr Horsley, in her report, had concluded that Mr Carnes’ right shoulder pathology would impact on his ability to continue fencing and sheep farming. This conclusion was based on her impression that Mr Carnes had been undertaking both the fencing and baling of hay in 2013. When Dr Horsley was better acquainted with Mr Carnes’ work activities in that year she changed her opinion. Dr Horsley did express concern that the need to perform some activities immediately might result in increasing Mr Carnes level of right shoulder pain.
The evidence before the Tribunal is that while Mr Carnes has reduction in the range of movement of his right shoulder, the shoulder he has been pain-free since his surgery in September 2013. Although Dr Horsley considered that Mr Carnes’ right shoulder condition might impact on Mr Carnes ability to drive his utility, there is no evidence before the Tribunal that he has experienced such difficulties driving.
The Tribunal’s determines that the shoulder condition does not prevent or contribute to preventing Mr Carnes from continuing to undertake either his role as a fencing contractor or as a sheep farmer. His incapacity results solely from his back condition, which is accepted as war-caused.
The Tribunal sets aside the decision under review and substitutes its decision that Mr Carnes satisfies the requirements of s 24(1),(2) and (2A) of the Act and therefore qualifies for payment of the disability pension at the special rate.
The date of effect of incapacity would appear to be late November 2013. The Tribunal finds that it was 30 November 2013 based on the medical data and reports. However, it is noted that the tax returns for Mr Carnes, Mrs Carnes, the Rural Fencing Company and the partnership of DJ and SA Carnes revealed some income until 30 June 2014, based predominantly on franking credits. The returns of 2015 show both personal and partnership losses. Although Mr Rudge on behalf of the Commission did concede that if Mr Carnes was found to satisfy the alone test the other matters and particularly the loss of earnings requirement s 24(2A)(e) would be satisfied, the dates do differ.
The Tribunal therefore further remits the matter to the Commission to determine to calculate the date from which Mr Carnes became eligible to receive payment at the special rate.
74. I certify that the preceding 73 (seventy-three) paragraphs are a true copy of the reasons for the decision herein of Miss E A Shanahan, Member
...................................[sgd]....................................
Associate
Dated 1 July 2016
Date of hearing 30 March 2016 – 31 March 2016 Counsel for the Applicant Ms Fiona Ryan Solicitors for the Applicant Williams Winter Solicitors Advocate for the Respondent Mr Ken Rudge Solicitors for the Respondent Department of Veterans’ Affairs APPENDIX - EXHIBITS
APPLICANT
A01Statement of Mr Donald Carnes dated 8 April 2015.
A02Statement of Mrs Susan Carnes dated 17 February 2016.
A03Report of Dr Clayton Thomas dated 12 June 2015.
RESPONDENT
R01T-Documents.
R02Clinical records of Beaufort Medical Practice as at 2 June 2015.
R03Covering Letter and Income Tax Returns produced by Mulcahy & Co dated 12 November 2015.
R04Transcript of Veterans’ Review Board hearing dated 12 February 2015 for matter V13/0332A.
R05Report of Dr Robyn Horsley dated 6 August 2015.
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