Delkou, Tom Petrou v Repatriation Commission

[1984] FCA 318

Re: TOM PETEROU DELKOU
And: THE REPATRIATION COMMISSION
No. G.424 of 1983
Repatriation

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.

CATCHWORDS

Repatriation - assessment of degree of disability - whether entitlement to 100% General Pension is a condition precedent to entitlement to a Special Pension - relevance of limitation on employment occasioned by applicant's perception of symptoms.

Repatriation Act 1920 - ss.35, 100, 101. Schedule 1, Schedule 2

HEARING

SYDNEY

#DATE 8:10:1984

ORDER

Appeal allowed.

The decision of the Repatriation Review Tribunal of 10 August 1983 is set aside. The matter is remitted to the Tribunal to be determined in accordance with the Repatriation Act after taking such further evidence as the Tribunal deems appropriate.

The respondent is to pay the applicant's cost of the appeal.

JUDGE1

The applicant, Tom Peterou Delkou, served in the Australian Army during the Second World War. He is therefore a "member of the forces", within the definition of that term contained in s.100 of the Repatriation Act 1920. It follows that he is entitled, pursuant to s.101 of the Act, to receive pensions in accordance with Division 1 of Part III of the Act in respect of "incapacity" which "has arisen out of or is attributable to his war service". Section 35, which is in Division I of Part III, provides that the rates of pension payable under the Division are those specified in the Schedules to the Act.

Schedule 1 is entitled "General Pension Rates". It includes a table of pensions payable in a nominated fortnightly amount, inter alia, "to a member upon his total incapacity". Additionally, it provides:

"3. Where a member of the Forces is temporarily totally incapacitated to such an extent as to be precluded from earning other than a negligible percentage of a living wage while he is so incapacitated, and where the aggregate of the rate of pension payable to that member under Column 3 of the table in this Schedule and the amount (if any) payable to him under Schedule 5 is less than the Special Rate of Pension specified in Schedule 2, the Commission may grant an additional pension to a member at a rate not exceeding the amount of the difference between that aggregate sum and that Special Rate of Pension for such period, whether in excess of six months or not, as the Commission determines.

. . .

6. Where the incapacity of a member of the Forces is such that he is unable to earn a living wage by reason that he is unable to engage in a remunerative occupation except on a part-time basis or intermittently, the amount specified in Colume 3 of the table in this Schedule shall, in its application in relation to him, be deemed to be" (a specified sum).

Schedule 2 deals with "Special Pensions". It provides:

"The Special Rate of Pension may be granted to members of the Forces who have been blinded as a result of War Service, and to members who are totally and permanently incapacitated (ie incapacitated for life to such an extent as to be precluded from earning other than a negligible percentage of a living wage). . . ."

On 15 June 1982 the Repatriation Review Tribunal set aside a decision of the respondent, the Repatriation Commission, and held that Mr Delkou was entitled to a War Pension for his incapacity from chronic anxiety state. On 23 December 1982 a Repatriation Board assessed the rate of pension for incapacity at 20% of the General Rate provided for in Schedule 1 of the Act. Mr Delkou sought review of that assessment, contending that he was affected to a far greater degree than the 20% grant would indicate and that he was entitled to a higher pension rate. That application was unsuccessful. In a decision given on 10 August 1983 the Tribunal affirmed the assessment made by the Repatriation Board and held that Mr Delkou should continue to receive a pension at 20% of the General Rate.

Mr Delkou appeals to this Court pursuant to s.107VZZH of the Act, contending that the Tribunal erred in law in reaching its decision. In his Supplementary Notice of Appeal three questions are raised:

"(a) Whether the Tribunal erred in law in finding that unless the Applicant suffered from an impairment sufficient to merit the payment of a pension at 100% of the General Rate pursuant to the Act that he was not eligible to be considered for the earning capacity related Special Rate as provided in Schedule 2 of the Act.

(b) Whether the Tribunal erred in law in finding that the effects of the Applicant's mental disability on his ability to work should not be considered in assessing his pension rate under the General Rate provided in Schedule 1 of the Act.

(c) Whether the Tribunal erred in law in finding that the Applicant's accepted disability should be assessed at 20% of the General Rate as provided in Schedule 1 of The Act."

Counsel for the respondent concedes that each of the first two questions set out above are questions of law. In relation to each of them he indicates that he is unable to report the view of the Tribunal. Counsel contends that the third question is not a question of law. I agree. The inquiry in this Court should be confined to the matters raised by questions (a) and (b) above.

In its reasons for decision the Tribunal referred to various medical reports which were before it, including a report of Dr RL Llewellyn-Smith in which reference is made to a claim by the appellant that various symptoms, described by Dr Lllewellyn-Smith as being psychosomatic, had intensified over the previous twelve months. The Tribunal went on to refer to the task before it in these words:

"The Tribunal is concerned to assess Mr Delkou's pension rate in the period from the acceptance of Mr Delkou's disability to the date of the Board's decision and the twelve month period before Dr Llewellyn-Smith's report is not included in this period. Again the Tribunal is concerned with Mr Delkou's incapacity, not what he thinks it is and what pension he thinks he ought to get.

It has been the view of this Tribunal for at least two years that the law is that:

1. under the General Rate, pension assessment is based entirely on the physical or mental impairment suffered, without reference to any consequential loss of earning power or inability to work; and that

2. unless an applicant suffers from impairment in this sense sufficient to merit the payment of a pension at 100% of the General Rate, he is not eligible to be considered for the earning-capacity related higher pension rates such as the Special Rate.

. . .

Whether Mr Delkou is eligible to be considered in terms of the higher pension rates will depend on whether his incapacity is total (and he is entitled to a 100% pension rate) and the General Rate.

It may well be that Mr Delkou's perception of his symptoms would, as Mr Donnellan has suggested, limit the possibility of his obtaining employment, but this is not an issue for consideration in assessing his pension rate under the General Rate. For that assessment the Tribunal must look at the actual extent of his physical and mental disability.

From the evidence before it, the Tribunal is satisfied that such physical disability as Mr Delkou suffers results from his back condition and his peripheral neuropathy, neither of which has any connection with his anxiety state."

The first ground of appeal argued by the appellant is that the Tribunal erred in holding that an applicant is not eligible to be considered for the higher pension rates specified in Schedule 2 of the Act unless it is first found that he suffers from such a degree of impairment as to entitle him to a pension under Schedule 1, at 100% of the General Rate. Although the Tribunal did not elaborate its reasoning the view taken by it appears to be that Schedule 1 provides for a full pension to be payable to a member on "total incapacity" and that Schedule 2 relevantly applies only to members who are "totally and permanently incapacitated" so that only a person who has suffered "total incapacity" within the meaning of Schedule 1 will qualify for a Special Pension under Schedule 2. This view is obviously correct if the words "total incapacity" in Schedule 1 are to be treated as synonymous with "totally . . . incapacitated" in Schedule 2.

The problem about this approach is that, rather unfortunately, the draftsman of Schedule 1 has used the term "total incapacity" to embrace a range of incapacity; "total" does not necessarily mean full or complete. Deane and Fitzgerald JJ pointed out the position in Repatriation Commission v Moss (1982) 40 ALR 553 at p 564 when they said:

"The Schedules proceed on the premises that there are degrees of an undefined condition referred to as 'Total Incapacity' and that the condition may and perhaps often will exist although the person entitled to the pension is able to engaged in a remunerative occupation and earn a living wage. The basic rate of pension for total incapacity is that specified in Sch 1 Col 3. Clause 6 of Sch 1 provides for a rate substantially higher than the basic rate 'where the incapacity . . . is such that he is unable to earn a living wage by reason that he is unable to engage in a remunerative occupation except on a part-time basis or intermittently.' The basic rate of pension which is payable under Sch 1 Col 3 to a person entitled to a pension 'upon his Total Incapacity', or 'on Total Incapacity', may also be increased under Sch 1 Col 3 if the person entitled to the pension is 'temporarily totally incapacitated to such an extent as to be precluded from earning other than a negligible percentage of a living wage while he is so incapacitated . . .'"

The approach adopted by the Tribunal in this case was considered but rejected by Fitzgerald J in Inglis v The Repatriation Commission, not reported 31 May 1983. At p 14 of his judgement in that case Fitzgerald J said:

"Although no doubt Schedule 2 must be read with the other schedules as part of the entire Act, the better view of its operation seems to me to be that Schedule 2 is self-contained and defines its own test for the Special Pension for which it makes provision: cf Moss per Fox J. at p.558. The explanation may lie in a proper understanding of the concept of 'Total incapacity'. As Deane J. and I pointed out in Moss at p.564 'Total incapacity' is undefined but the Schedules proceed on the basis 'that the condition may and perhaps often will exist although the person entitled to the pension is able to engaged in a remunerative occupation and earn a living wage'. Presumably, therefore, Total incapacity' can exist although the person entitled to the pension can still perform some other functions and would in such circumstances exist if such a person was, by reason of incapacity, permanently precluded from earning other than a negligible percentage of a living wage."

I agree with Fitzgerald J that Schedule 2 prescribes its own test for entitlement to receipt of a Special Pension. I think that nothing is to be gained by an enquiry whether an applicant for a Special Pension would be entitled to a General Pension at 100% of the stipulated amount. In the majority of cases, no doubt, a person entitled to a Special Pension will be a person who would be entitled to a 100% General Pension but the enquiry is an irrelevant distraction. The only question, for the Commission and, upon review, the Tribunal, in considering the application of Schedule 2, is whether the applicant is "totally and permanently incapacitated" in the sense explained in the Schedule itself, namely "incapacitated for life to such an extent as to be precluded from earning other than a negligible percentage of a living wage". I am of the opinion that the Tribunal fell into error in relation to this first matter.

It is not clear, on the Tribunal's decision, that the error to which I have referred played any role in the Tribunal's ultimate assessment of disability. However, the Tribunal did take the trouble to set out its view on this matter and I cannot be certain that, absent the error, it would have reached the conclusion which it did. In those circumstances it is proper to remit the matter for further consideration.

The second ground of appeal raises for consideration the correctness of the view expressed by the Tribunal that any limitation of the possibility of his obtaining employment caused by Mr Delkou's perception of his symptoms is not a matter for consideration by the Tribunal in assessing the appropriate pension rate under the General Rate and that, for that assessment, the Tribunal must look at the actual extent of his physical and mental disability"

It is argued on behalf of the applicant that this approach is inconsistent with the judgements in Moss. In that case at pp 557-558, Fox J said:

"This is not to say that in some cases, at least, such as those of partial incapacity, an assessment must be confined to a consideration of the nature or extent of physical or mental injuries. On the contrary, the very notion of incapacity involves consideration of capacity for something; some external frame of reference is necessary. Although, strictly speaking, the question does not arise in this case, my present view is that incapacity should to some extent, even if only in a general way, take account of what the physical or mental disability or disabilities mean to the capacity of the particular individual to earn and to enjoy life. Such an approach may or may not operate in his favour. I understand from a document in the appeal book that the Commission has long followed a practice along these lines. What is of importance for present purposes is that the Act requires that a relevant physical or mental condition must exist as the basis for an assessment. This means a condition existing at the time of assessment."

See also the comment, in the judgement of Fitzgerald and Deane JJ at p 566, that the decision of the Full Federal Court in Repatriation Commission v Bowman (1981) 38 ALR 650 "did not . . . purport to establish . . . a clear dichotomy between physical or mental impairment on the one hand and inability to work or earn on the other. To the contrary, it was recognised in that case that inability to work or to earn will commonly be a manifestation and a measure of incapacity."

I am not persuaded that the Tribunal fell into any error in relation to this matter. The Tribunal was aware of Moss. I do not read the Tribunal as saying that it must consider the extent of Mr Delkou's physical and mental disability in isolation or independently of his capacity to earn and to enjoy life. I think that, in the passage under attack, the Tribunal was saying no more than it must consider for itself the actual extent of disability and that it is not relevant to have regard to any limitation in the possibility of obtaining employment occasioned by the applicant's perception of his symptoms; in other words, the issue is the extent of incapacity caused by Mr Delkou's sickness not the extent of incapacity caused because Mr Delkou thinks that he is sick. The distinction was discussed, in another context, by Fitzgerald J in Howard v Director-General of Social Security, not reported 14 December 1983. In that judgement his Honour referred to two decisions of the Administrative Appeals Tribunal, Panke v Director-General of Social Security (1981) 4 ALD 179 and Sheely v Director-General of Social Security (1982) 4 ALN 206 and commented at p 6:

"Properly understood, there seems to me to be no difficulty in acceptance of the statement in Sheely that there is a distinction between a person who is sick and the person who merely thinks that he is sick, or perhaps who merely says that he is sick. A belief in illness can cause or reflect illness which is psychotic or neurotic rather than physical in origin. However, a belief in the existence of an illness in oneself does not automatically mean that such an illness exists. The existence of illness however based is ultimately a question of fact".

If I have understood the Tribunal correctly, this was the distinction which it had in mind. Of course, as Fitzgerald J pointed out, in considering the extent of any incapacity a psychotic or neurotic condition causing the member to believe that he is incapacitated and thereby resulting in actual incapacity must be taken into account. Such a person does more than "merely thinks that he is sick". The belief actually causes incapacity.

In view of the conclusion reached by me in regard to the first ground of appeal the matter should be remitted to the Tribunal for further consideration. If the Tribunal is satisfied, beyond reasonable doubt, that the decision made by the Repatriation Board is the decision which it would have made it will affirm the decision: otherwise it will substitute such decision as it considers to be in accordance with the Act; see s.107VH(2), (3).