Defence Force Retirement and Death Benefits Authority v Heffernan, Lionel Luke

[1978] FCA 63

E

CATCHWORDS

Appeal - Administrative Appeals Tribunal - Reclassification

by Defence Force Retirement and Death Benefit Authority -

Invalidity classification - Pensioner - Incapacity in relation

to civil employment at date of reclassification - Fact or

event which occurs subsequent to original classification -

Costs - Defence Forces Retirement Benefits Act 1948, ss.51(1),

51(2) , 53(1) - Defence Force Retirement and Death Benefits

Act	-1973, s.99 (1) - Administrative Appeals Tribunal Act 1975,
s . 4 4 ( 1 ) .
DEFENCE FORCE RETIREMENT AND DEATH BENEFITS AUTHORITY and
THE COMMONWEALTH OF AUSTRALIA V. LIONEL LUKE HEFFERNAN
NO. VG 13 of 1978.

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Coram : Brennan, Deane and Fisher	JJ.
4 August 1978.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY No. VG 13 of 1978

GENERAL DIVISION

BETPEEN : DEFENCE FORCE RETIREMENT AND

DEATH BENEFITS AUTHORITY and

THE COITMONVEALTH OF 4-USTRALIA

Plaintiffs

AND

- : LIONEL LUKE HEFFEFNAN

Defendant

JUDGES IviiING ORDER : Brennan, Deane and Fisher JJ.

DATE OF ORDER : 4 August 1978.

WHERE iUDE : MELBOURNE.

THE COURT ORDERS THAT:

1. The appeal by the plaintiffs against the decision made on 10 February 1978 by the Administrative Appeals Tribunal be dismissed.

2.	The plaintiff Commonwealth of Australia pay the
defendant's costs to be taxed.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY No. VG 13 of 1978

GENERAL DIVISION

BETWEEN : DEFENCE FORCE RETIREMENT AND

DEATH BENEFITS AUTHORITY and THE COMMONWEALTH OF AUSTRALIA

Plaintiffs

: LIONEL LUKE HEFFWAN

Defendant

I . CORAM : Brennan, Deane and Fisher JJ.

4th August 1978.

REASONS FOR JUDGMENT

THE COURT:

This is an appeal by the Defence Force

Retirement and Death Benefit Authority ("the Authority") '

and the Commonwealth of Australia fr6m a decision of the

Administrative Appeals Tribunal ("the Tribunal") in its

General Division vrhereby the Tribunal set aside a decision

of the Authority made on the 3rd December 1976. By its L ,

decision, the Authority had refused to alter the

classification of Lionel Luke Heffernan ("the defendant") . -.

under s.51 of the Defence Forces Retirement Ac 1948

("the Act") from Class B to C!ass A. The Tribunal determined

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that the defendantts relevant incapacity for civil

employment was 100 per cent and accordingly altered his

classification under s.51 of the Act from Class B to Class A.

The only outstanding issue between the parties

concerns the interpretation and effect of s.53(1) of the

Act which provides for the alteration of classification

under s.51. For the plaintiffs, it has been submitted

that, in considering whether there should be an alteration

of classification under s.51, the Authority was restricted

to considering the effect of the medical condition of the defendant at the time of his premature discharge from the

Army on 9th July, 1971. If the Authority were entitled to

reclassify the defendant by reference to the extent of

incapacity in relation to civil employment as at the time

it reached its decision that the classification of the

defendant should notbealtered, it is common ground that

the Tribunal was correct in setting aside that decision

and altering the classification of the defendant from

Class B to Class A.

Section 51 of the Act, insofar as it is presently

relevant, provides as follows:

"51. (1). ..... .where -

(a) a member who is a contributor has been

retired before attaining the retiring	age
for the rank held by him;

........ ........ ........ .....

on the ground of invalidity or of physical or mental

incapacity to perform his duties...he is entitled to

benefit in accordance with the next three succeeding

sections, but,...is not otherwise entitled	to benefit
under this -Act.

.. . h

3.

(2) Wherc a person ... is, or is about to become,

entitled to benefit by virtue of the last preceding

sub-section, the Authority shall determine the percentage of total incapacity of the person in relation to civil employment and shall classify the

person according to the percentage of incapacity as

fol1or.r.s:-

Percentage Incapacity of Class

Sixty or over	A.
Thirty or over but less than sixty B.

thirty than Less c. - I1

It can be seen from the provisions of s.51 set out above,

that maximum incapacity in relation to civil employment

will lead to classification	i Class A (i.e. over 60 per
cent incapacity).

Sectjon 53(1) of the Act provides:

"The Authority may, from time to time,

if it is satisfied that the percentage of

incapacity in relation to civil employment

of a pensioner classified under section 51

of this Act is such that the classification

of the pensioner should be altered, reclassify

him accordingly as if he were being classified

under section 51".

Counsel for the plaintiffs in his submission

gave to s.53 an extremely restricted scope. It had, he

contended, no application where the pensioner's capacity

had deteriorated in consequence of medical conditions

not existing at the time of his discharge. Nor could

regard be had to reduced capacity in consequence of

exacerbation or aggravatim of the medical condition

existing on discharge. The only relevant medical

condition, he said, was that existing at the time of

discharge from the forces. Grounds for a reclassiflcation

under s.53 existed, in his contention, only if an error had

been made in the initial classification at the time Of

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discharge or if there was a change in the

availability of the pensioner's employment. The latter

circumstance would arise if the need for the particular

occupation engaged in by the pensioner had disappeared.

If this submission be accepted, the scope

for reclassification is indeed limited. Error apart,

a pensioner could not be reclassified although his percentage

of incapacity had manifestly altered - ither by way of

increase or by way of decrease. We have reached the

conclusion that the section does not require so inconvenient

a construction to be put upon it.

I The power of reclassification conferred upon

the Authority by s.53(1) may be exercised from time to time.

The expressed condition of its exercise is the Authority's

satisfaction that the relevant percentage of incapacity is

"such that the classification of the pensioner should be

altered". There is nothing in the quoted phrase which restricts the Authority to particular grounds of

reclassification or which precludes it from considering any

material fact or event which occurs subsequent to the

original classification. Indeed one would think that the

circumstances which would satisfy the Authority that the

classification should be altered are circumstances which make

the original classification no longer appropriate.

Section 53(1) arms the Authority with a power which may be

exercised as frequently as necessary to reflect the relevant

incapacity of the pensioner from time to time. It does not,

either expressly..or impliedly, require the Authority to

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determine the question whether the particular pensioner

should be reclassified by reference to his incapacity at

the time of his discharge as distinct from his incapacity

at the time when the question whether he should be

reclassified arises for decision. If the suggested

restrictions upon the exercise of the power to reclassify

be rejected, there is no difficulty in applying the

provisions of s.51 relating to classification as at the

date of reclassification. That is the process of which

s.53(1) speaks in the phrase "reclassify him accordingly

as if he were being classified under s.51".

Section 53(2) is consonant with this construction

for it requires the Authority to specify the date from which

the reclassification is to have effect. Moreover, the

construction for which the plaintiffs contend would attribute

to the 1973 amendment of s.53 the effect of impairing

significantly the entitlement which members of the Defence

Force had prior to that time - an entitlement under the

scheme to which they had contributed.

l Section 53(1) was amended by the Defence Forces

Retirement Benefits Act 1973. Prior to its amendment the *

sub-section stood as follows:

The Board may, from time to time, if it is

satisfied that the percentage of incapacity of

a pensioner classified under section fifty-one

of this Act has altered, or, because of the

nature of his employment, should be varied, reclassify him in accordance with the altered percentage of incapacity."

Prior to the amendment, a pensioner whose

incapacity had altered after original classification was

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entitled, upon proof of that fact to the Board's

satisfaction, to be reclassified accordingly. It is

unlikely that the Parliament intended the amendment	l
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to deprive those who were entitled o benefit under the-

1948 Act of the right thus conferred, and to require

the Board' S successor to omit consideration of the

alteration in determining his application.

It follows that, in the circumstances, the

Tribunal was correct in setting aside the decision of

the Authority and in altering the classification of the

defendant under s.51 of the Act from Class B to Class A.

I	The appeal should be dismissed. The Commonwealth of
I	Australia was said by its counsel to be the more

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appropriate plaintiff against which an order for costs

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should be made, and we agree.

The order of the Court will be that the appeal

by the plaintiffs against the decision of the Tribunal

be dismissed and that the plaintiff Commonwealth of

Australia pay the defendant's costs to be taxed.