ADMINISTRATIVE LAW – Application for review of a decision of the Administrative Appeals Tribunal – Veterans’ entitlements – Application for Special Rate pension – whether veteran had suffered a “loss of earnings on his own account” – where veteran’s last paid remunerative work was running his farming business – where the farming business consistently recorded a net loss for taxation purposes.
WORDS AND PHRASES – “earnings on his or her own account”; “remunerative work”
Veterans Entitlements Act 1986, ss23(1) and 24(2A).
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N479 OF 2001
BETWEEN:
LAURENCE COUNSEL APPLICANT
AND:
REPATRIATION COMMISSION RESPONDENT
JUDGE:
MOORE J
DATE:
1 AUGUST 2001
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Introduction
This is an appeal from a decision of the Administrative Appeals Tribunal (“the Tribunal”) of 9 April 2001 affirming a decision of a delegate of the Repatriation Commission (“the respondent”) that the applicant was not entitled to be paid a veterans’ disability pension at the special rate. The applicant had lodged a claim with the respondent for an increase in his disability pension on 31 July 1998. At that time, the applicant was receiving a disability pension at 90% of the general rate for the accepted conditions of myopia, bilateral sensorineural hearing loss, tinnitus, ischaemic heart disease, post traumatic stress disorder, tinea, impotence, folliculitis and chronic solar skin damage. A delegate of the respondent made a decision to increase the applicant’s pension to 100% of the general rate but decided that the applicant was not entitled to payment of the pension at either the intermediate or special rate or to payment of an extreme disablement allowance. The delegate’s decision was subsequently reviewed and affirmed by a Department of Veterans’ Affairs review officer, the Veterans’ Review Board and finally the Tribunal.
Factual background
The following is the background as recounted by the Tribunal. After arriving in Australia from the United Kingdom in 1938, the applicant served with the Army…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Counsel v Repatriation Commission [2001] FCA 1032
Case
[2001] FCA 1032
Decision Date
CaseChat Overview and Summary
Counsel appealed against a decision of the Administrative Appeals Tribunal affirming a decision of the Repatriation Commission that the applicant was not entitled to be paid a veterans' disability pension at the special rate. The applicant had claimed an increase in his disability pension, which was increased to 100% of the general rate, but he was not entitled to the special rate or extreme disablement allowance. The Tribunal's decision was affirmed by a Department of Veterans’ Affairs review officer, the Veterans’ Review Board, and finally the Tribunal. The applicant argued that the Tribunal had failed to consider hypothetical earnings and whether, but for his incapacity, the farm might have achieved greater earnings. The applicant submitted that the evidence before the Tribunal was sufficient to raise the issue for the Tribunal's consideration.
The court held that the Tribunal had not erred by construing the expression "loss of earnings on his own account" as requiring a loss of net earnings, namely gross earnings less deduction of expenses. The meaning of the expression "earnings on his or her own account" in s 24(2A)(e) has to be ascertained having regard to the statutory context in which the expression appears. The phrase "remunerative work" raises questions about whether it is substantial and successful, but what constitutes "remunerat(ion)" is not to be viewed narrowly. The court held that there was no error of law on the Tribunal's part in deciding that the veteran had not been engaged in "remunerative work" (in so far as the dog breeding was concerned).
The application was dismissed. The applicant was ordered to pay the respondent's costs.
Orders
Orders of the court
1. The application is dismissed.
2. The applicant pay the respondent’s costs.
Background
Background to the litigation
This is an appeal from a decision of the Administrative Appeals Tribunal (“the Tribunal”) of 9 April 2001 affirming a decision of a delegate of the Repatriation Commission (“the respondent”) that the applicant was not entitled to be paid a veterans’ disability pension at the special rate. The applicant had lodged a claim with the respondent for an increase in his disability pension on 31 July 1998. At that time, the applicant was receiving a disability pension at 90% of the general rate for the accepted conditions of myopia, bilateral sensorineural hearing loss, tinnitus, ischaemic heart disease, post traumatic stress disorder, tinea, impotence, folliculitis and chronic solar skin damage. A delegate of the respondent made a decision to increase the applicant’s pension to 100% of the general rate but decided that the applicant was not entitled to payment of the pension at either the intermediate or special rate or to payment of an extreme disablement allowance. The delegate’s decision was subsequently reviewed and affirmed by a Department of Veterans’ Affairs review officer, the Veterans’ Review Board and finally the Tribunal.Factual background The following is the background as recounted by the Tribunal. After arriving in Australia from the United Kingdom in 1938, the applicant served with the Army from 1940 to 1946. On his return from the war the applicant worked in a variety of jobs before moving in 1982 to live and work on a farm purchased by him two years earlier. The applicant ran the farm in partnership with his wife. They worked seven days a week, ten hours a day on the farm where they raised beef cattle and pigs and cultivated crops. From year to year, revenue was generated from the sale of livestock and reinvested into improving the property. However in 1988, due to a deterioration in his health, the applicant sold part of the farm. At the same time, the applicant reduced his beef cattle stock by 50% and closed the piggery because he had begun to experience physical difficulty in performing various tasks. This led to a decline in the farm’s revenue. By 1993 the applicant’s health had deteriorated further. He experienced heart and blood pressure problems and increasing stress and anxiety. As a result the farm was sold and the partnership dissolved. Since the sale the applicant has not undertaken any other paid work. With the exception of the financial year 1988/1989, the applicant never made a profit from the farm. The partnership’s tax returns show a negative net income from the farming business except for the financial year ending June 1989. Relevant legislation The rate at which pensions, other than service pensions, are payable to veterans is prescribed by the Veterans’ Entitlements Act 1986 (Cth) (“the Act”), Part II Division 4. There are four different rates of pension provided for in that division, one of which is the special rate. The eligibility requirements in respect of the special rate are found in in s 24 of the Act, with specific criteria for veterans over the age of 65 (applicable to the applicant) identified in s 24(2A) which relevantly provides:s 24(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.Subsections 24(1)(a) and (1) (b) referred to in s 24(2A)(c) provide:“s24(1) This section applies to a veteran if: ...(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 ...”The Tribunal's reasoning
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
MOORE J
The applicant’s second ground of appeal was the Tribunal’s alleged failure to consider hypothetical earnings. That is, the Tribunal’s failure to consider whether, but for the applicant’s incapacity, the farm might have achieved greater earnings. The applicant submitted that the evidence before the Tribunal, in particular the evidence that the applicant was forced to sell part of his farm and reduce stock levels because of his deteriorating health leading to a decline in revenue, was sufficient to raise the issue for the Tribunal’s consideration. The applicant submitted that it is not apparent from the Tribunal’s reasons that it considered what the applicant’s financial position might have been had he not been suffering from war caused disabilities.Conclusion I deal with the first issue raised by the applicant. That is, whether the Tribunal erred by construing the expression "loss of earnings on his own account" as requiring a loss of net earnings, namely gross earnings less deduction of expenses. The meaning of the expression "earnings on his or her own account" in s 24(2A)(e) has to be ascertained having regard to the statutory context in which the expression appears. It is clear that both the reference to "earnings" in s 24(2A)(e) and "salary or wages" in the same paragraph concern the product of "remunerative work" in the preceding paragraph viz s 24(2A)(d). That is, one criterion that must be satisfied to secure a special rate of pension is that the veteran has been prevented from continuing in remunerative work because of the war-caused incapacity (flowing from war-caused injury or disease) and another criterion is that because the veteran has been prevented from working in this way, he or she is suffering a loss of salary, wages or earnings. Accordingly, a logical starting point in determining the contents of the second criterion is ascertaining what is meant by "remunerative work". While the meaning of this phrase has not arisen directly in the context of subs (2A) of s 24, the meaning of the phrase has arisen in the context of subs (1)(c) of the same section. The phrase can plainly be treated in that latter subsection as serving the same statutory purpose as in the former and can be treated as having the same meaning. Whether work is "remunerative work" raises questions about whether it is substantial and successful: see Sheehy v Repatriation Commission (1996) 66 FCR 569 at 574. That is not say, however, that what constitutes "remunerat(ion)" is to be viewed narrowly. In Repatriating Commission v Buckingham (Ryan J, 7 February 1996, Federal Court of Australia, unreported) Ryan J had to consider whether a person engaged in voluntary work for the church and provided with free accommodation might be viewed as having been engaged in "remunerative work". It was common ground in that matter, and apparently accepted by his Honour, that accommodation provided in return for services rendered could amount to remuneration for the purposes of s 23(1)(b) of the Act. Nonetheless, the work must be substantial and I apprehend that this was the underlying basis on which Wilcox J accepted that the Tribunal had not erred in declining to characterise the dog breeding in Hill v Repatriation Commission [2000] FCA 929 as "remunerative work". In that matter the veteran had been engaged in dog breeding in a minor way which the Tribunal had found was "merely a hobby that produced some very limited income for him". In that context, Wilcox J made the following observations (at 10 - 11),I agree with Ms Henderson that neither Sackville J nor the Full Court (in Sheehy) intended to lay down an immutable “test” as to what might constitute “remunerative work” within the meaning of s 24(1)(c) of the Act. I also agree with her that, even if the Full Court did prescribe a test that must be applied to this case (namely, the formula “the ‘remunerative work’ must have been ‘performed’ or ‘successfully undertaken’ or ‘effectively undertaken’”), the Tribunal’s findings dispose of the notion that the dog breeding activity undertaken by Mr Hill passed that test, and was “remunerative work” within the meaning of s 24(1)(c). The Tribunal found the dog breeding plan “did not properly commence operation” and was “merely a hobby that produced some very limited income for him”. On the evidence, it was clearly open to the Tribunal to make these findings. If the finding were affected by any error, it was that they stated the effect of the evidence in a manner unduly favourable to Mr Hill; although the dog breeding brought in some income, this was outweighed by the attendant costs. establish himself or herself in a particular activity, being a continuation Far from being remunerative, the activity was costly to Mr Hill.There may be cases where an activity in which a veteran engaged failed to return a net profit to the veteran, but may nonetheless be regarded as “remunerative work” for the purposes of s24(1)(c). One example may be a case where the veteran attempted to of remunerative work previously undertaken by the veteran, but was denied success by his or her war-caused disability. If the decision maker was satisfied that the attempt would have been successful, in the sense of providing “earnings on his or her own account” – that is, net earnings after deduction of expenses – but for the war-caused disability, I see no difficulty about concluding that the veteran has been prevented, by the war-caused disability, “from continuing to undertake remunerative work that the veteran was undertaking” and, by reason thereof, has suffered a loss of earnings on his or her own account.However, that is not the present case. ....” ( Emphasis added)The observations of Wilcox J might be viewed as suggesting that work is "remunerative" only when a profit is derived from work undertaken as part of a business. However, I doubt that his Honour intended to say that work in a business could never be "remunerative" if the business made no profit. Rather, it was the characterisation of the work as a "hobby" by the Tribunal in its findings that led Wilcox J to conclude there had been no error of law on the Tribunal's part in deciding that the veteran had not been engaged in "remunerative work" (in so far as the dog breeding was concerned). It is unlikely the highlighted observations of Wilcox J in the second paragraph were intended to be an exhaustive analysis of the meaning of the expression "earnings on his or her own account".