Clayton and Repatriation Commission (Veterans' entitlements)

[2017] AATA 1546

Clayton and Repatriation Commission (Veterans' entitlements) [2017] AATA 1546 (4 September 2017)

Division:VETERANS' APPEALS DIVISION

File Number:           2016/2630

Re:Michael Clayton

APPLICANT

AndRepatriation Commission

RESPONDENT

DECISION

Tribunal:Deputy President K Bean

Date:4 September 2017

Date of written

reasons:21 September 2017

Place:Adelaide

The decision under review is affirmed.

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Deputy President K Bean

CATCHWORDS

VETERANS’ ENTITLEMENTS – Whether veteran aged over 65 entitled to pension at special rate – Preliminary issue – Whether veteran had been working on his own account for a continuous period of 10 years when veteran stopped undertaking his last paid work – Decision under review affirmed.

LEGISLATION

Veterans’ Entitlements Act 1986, s 24(2A)

Administrative Appeals Tribunal Act 1975, s 42B

Veterans’ Affairs Legislation Amendment (Budget Measures) Act 2017, Sch 2 Item 3

CASES

Ralph v Repatriation Commission [2016] FCAFC 89

REASONS FOR DECISION

Deputy President K Bean

21 September 2017

1. The veteran in this matter, Mr Clayton, is now 70 years old.  When he was 21, he was conscripted into the Australian Army and subsequently undertook operational service in Vietnam, before being discharged in 1970.  Unfortunately, as a result of his operational service he has sustained a number of medical conditions, including posttraumatic stress disorder, alcohol dependence and lumbar spondylosis.

2. Although he turned 65 in 2012, Mr Clayton was still working at that time.  In the event, he ceased working about two years later, and on 13 August 2014, he lodged an application with the Repatriation Commission (the respondent) seeking an increase in his disability pension, which was then being paid at 100% of the general rate.  That application was denied by the original delegate and the delegate’s decision was subsequently affirmed by the Veterans’ Review Board on 17 February 2016.

3. On 19 May 2016, Mr Clayton applied to this Tribunal for review of the rejection of his application for a higher rate of pension.

4. Mr Clayton’s application was originally listed for a substantive hearing before the Tribunal on 28 and 29 August this year. However, in response to an application by the respondent for a particular legal issue to be determined as a preliminary point, that listing was ultimately converted into a preliminary hearing on Monday, 28 August 2017. The purpose of that hearing was to determine the respondent’s application that the application for review be dismissed pursuant to s 42B of the Administrative Appeals Tribunal Act 1975 (the AAT Act) on the basis that it had no reasonable prospect of success or, alternatively, that the Tribunal address the particular legal issue raised by the respondent as a preliminary issue and, if that led to a conclusion that the applicant could not succeed, that the decision under review be affirmed.

5. I will proceed to explain and address that preliminary issue before returning to the issue of the proper disposition of Mr Clayton’s substantive application to the Tribunal.

6. I should also add that I originally delivered my Decision and Reasons orally on 4 September 2017.  However, both parties subsequently requested written Reasons.

   WHAT IS THE PRELIMINARY ISSUE?

7. The issue raised by the respondent relates to the proper construction and application of s 24(2A) of the Veterans’ Entitlements Act 1986 (the VE Act).

8. At the time of Mr Clayton’s application for an increase in his disability pension, s 24(2A) of the VE Act relevantly provided as follows:

   (2A)    This section applies to a veteran if:

   (a)the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and

   (b)the veteran had turned 65 before the claim or 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.

9. The provision which the respondent says is fatal to Mr Clayton’s application is s 24(2A)(g). The respondent says that based on the evidence as to his work history, Mr Clayton cannot satisfy the requirement imposed by that provision (the “10 year rule”), with the result that his substantive application must fail. Mr Miller, who appeared as counsel for Mr Clayton, also conceded that if Mr Clayton could not satisfy this provision, then his substantive application could not succeed, and it would be open to the Tribunal to either dismiss the application under s 42B or determine the issue as a preliminary matter and affirm the decision under review.

10. It follows that the preliminary issue for me is whether, on the undisputed facts, Mr Clayton can potentially satisfy s 24(2A)(g). For completeness, I note that Mr Clayton does not seek to be paid pension at the intermediate rate and therefore s 23(3A)(g) is not applicable.

11. I will proceed to outline the relevant facts before addressing the parties’ contentions.

    THE RELEVANT FACTS

12. There is no dispute that Mr Clayton’s work history from June 2000 onwards was as follows:

    (a)Managing partner and hotel manager at the Bridgeway Hotel: from June 2000 to April 2007;

    (b)Owner/operator and managing partner of Dundees Hotel: from December 2005 to June 2013;

    (c)25% shareholder, managing partner and (at times) hotel manager of the Pier Hotel, Glenelg: from February 2009 to 20 September 2013;

    (d)Delivery work and bottle shop sales work as an employee at Skye Cellars: from 1 November 2013 to 30 November 2013;

    (e)Sales, cash handling, loading and unloading work as an employee, Woodville Hotel: from 11 December 2013 to 14 April 2014; and

    (f)Bottle shop sales, customer service, cash handling, loading and unloading work as an employee at Fassina Liquor merchants: from 10 June 2014 to 3 August 2014.

13. It is against this factual background that I must determine whether Mr Clayton met or could meet the requirements of the 10 year rule.

    CAN MR CLAYTON SATISFY THE 10 YEAR RULE?

14. Mr Miller conceded at the preliminary hearing that Mr Clayton did not satisfy the first limb of s 24(2A)(g), that is, the requirement that if he had been working as an employee of another person, that he had been so working for a period of at least 10 years that began before he turned 65.

15. However, Mr Miller contended that Mr Clayton met the second limb of the provision as he had been working on his own account, as a hotel owner/manager, for a period of at least 10 years, which commenced before he turned 65 and ended after he turned 65.  He contended that it was open to the Tribunal to construe the provision such that this was sufficient to satisfy the 10 year rule, notwithstanding that after ceasing work as a hotel owner/manager, Mr Clayton had a series of short-term jobs as an employee before lodging his application for an increase in pension.

16. However, the difficulty with this submission, in my view, is that s 24(2A)(g) clearly directs attention to the point in time at which the veteran last worked, and the capacity in which that work was undertaken. As the Full Court of the Federal Court observed in relation to s 24(2A)(g) in Ralph v Repatriation Commission,[1] “[t]hat criterion is concerned with the capacity in which that last paid work was undertaken”.  On any view of the evidence, Mr Clayton last undertook remunerative or paid work on 3 August 2014, his last day of work for Fassina Liquor merchants. 

    [1]     Ralph v Repatriation Commission [2016] FCAFC 89, at [33].

17. Having regard to the veteran’s last remunerated work, the provision then directs attention to either of two potential scenarios, depending on the nature of the veteran’s last work.  If at the time the veteran was undertaking their last work they were working as an employee of another person, the provision requires that they had been working for that person “or for that person and any predecessor or predecessors of that person” for a continuous period of 10 years that began before the veteran turned 65.  Alternatively, if the veteran’s last work consisted of work on their own account, the provision requires that the veteran had been working in the relevant profession, trade, employment, vocation or calling, for a period of at least 10 years.

18. As I see it, the difficulty here is that, although he had previously worked on his own account for lengthy periods, at the time of his last remunerated work, Mr Clayton was working as an employee of another person.  Unfortunately, from his point of view, he had not been employed by that person (or that person and a predecessor) for at least 10 years.  I note Mr Miller conceded this point, and also conceded that on the basis of the decision of the Full Court in Ralph,[2] it was not open to the Tribunal to combine a veteran’s work as an employee with work on their own account in order to satisfy the 10 year rule.

    [2]     Ralph v Repatriation Commission [2016] FCAFC 89, at [54]‑[56].

19. Having carefully considered his submissions, I have therefore ultimately concluded that it is not tenable for me to construe the provision in the manner contended for by Mr Miller, which, in my view, is at odds with the plain language of the provision.  As I have indicated, on my reading of it, the provision clearly directs attention toward the last remunerated work undertaken by the veteran, and not whether at any time in the past, the veteran has undertaken work either as an employee or on their own account for 10 years, which straddled the period both before and after their 65^th birthday.  If that had been the intention of the provision, then, in my view, it would have been in different terms.

20. Further, as Mr Schatz, who appeared as counsel for the respondent pointed out, it is hardly surprising that s 24(2A)(g) is directed toward a veteran’s last paid work and not work they undertook prior to their last work. The purpose of s 24(2A) is to confer an entitlement to the special rate of pension on veterans over the age of 65 who have ceased work due to their war-caused disabilities, and would otherwise have continued working. It is not surprising in that context that at the relevant time, s 24(2A)(g) required that where a veteran had ceased working due to their war‑caused disabilities, they had been undertaking that particular work (that is the work they could no longer do) for a period of at least 10 years. Whether prior to their last work a veteran had at some prior time worked continuously for 10 years in some other type of work or employment is less logically relevant to the question of whether, absent their war‑caused disabilities, the veteran would have continued working past 65 for longer than they did.

21. Having regard to the broader statutory context, the language of the provision and the fact Mr Miller did not direct my attention to any authority in support of his proposed construction of the provision, I have therefore ultimately concluded that it is not open to me to interpret the provision in a way which would have the result that Mr Clayton satisfies the 10 year rule, as in force at the relevant time.

22. For completeness, I note that the provision has subsequently been amended and on my reading of the amended version, if that version of the provision had been in force at the time Mr Clayton lodged his application to the respondent, he may well have satisfied it. In circumstances where the Parliament now appears to have acknowledged the difficulties with the application of the previous version of s 24(2A)(g), it is unfortunate that because of the timing of his application to the respondent for an increase in his pension, Mr Clayton is not able to obtain the potential benefit of that acknowledgment in the context of this matter. However, I accept the contention put forward by Mr Schatz that the Parliament has not seen fit to change the provision retrospectively, and it is clear from the transitional provisions in the amending legislation that it was not intended to apply to claims or applications lodged with the respondent prior to 1 July 2017.[3] As Mr Clayton’s application was lodged before then, I must therefore apply the previous version of s 24(2A)(g) to his application rather than the current one, with the result that his application must fail.

    [3]     Veterans’ Affairs Legislation Amendment (Budget Measures) Act 2017, Sch 2 Item 3.

    DISPOSITION

23. In practical terms, I note that it makes little difference whether I dismiss the application pursuant to s 42B of the AAT Act, or affirm the decision under review.

24. However, given that I have heard full argument on the s 24(2A)(g) issue, I have decided it is more appropriate for me to indicate that I have formally determined the issue as a preliminary matter and having reached the conclusion that Mr Clayton does not satisfy s 24(2A)(g), I have also concluded that he is not entitled to pension at the special rate, and the decision under review should be affirmed. I note Mr Miller raised no objection to that course in the event that I concluded Mr Clayton could not succeed.

    DECISION

25. The decision under review is affirmed.

I certify that the preceding 25 (twenty-five) paragraphs are a true copy of the reasons for the decision herein of Deputy President K Bean

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Associate

Dated: 21 September 2017

Date of hearing:	28 August 2017
Counsel for the Applicant:	Mr J Miller
Solicitors for the Applicant:	Tindall Gask Bentley
Counsel for the Respondent:	Mr A Schatz
Solicitors for the Respondent:	Australian Government Solicitor