Egan and Repatriation Commission
[2008] AATA 628
•18 July 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 628
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/3595
VETERANS' APPEALS DIVISION ) Re TERENCE JOSEPH EGAN Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Miss E A Shanahan, Member
Mr C Ermert, MemberDate18 July 2008
PlaceMelbourne
Decision The Tribunal sets aside the decision under review and substitutes in its place the decision that Mr Egan is qualified for the special rate of pension from the date of his cessation of his work with the racing clubs, being 27 December 2006.
. . . . . . . . . . . . [Sgd] . . . . . . . . . . . .
Miss E A Shanahan
Member
VETERANS’ AFFAIRS ‑ veterans’ entitlements – operational service – accepted war‑caused injuries – cessation of remunerative work – what is the remunerative work – cessation due to war-caused injuries – cessation due to war-caused injuries alone – age of applicant beyond normal retirement age - work to a maximum of eight hours per week – loss of earnings – decision set aside – pension to be paid at special rate
Veterans’ Entitlements Act 1986 s 23, s 24
Flentjar v Repatriation Commission (1997) 48 ALD 1
Repatriation Commission v Hendy (2002) 76 ALD 47
Forbes v Repatriation Commission (2000) 101 FCR 50
REASONS FOR DECISION
18 July 2008 Miss E A Shanahan, Member
Mr C Ermert, MemberINTRODUCTION
1. Terence Joseph Egan, the applicant, served in the Royal Australian Navy (the Navy) from 1947 to 1959. His service included operational service in Korea. On discharge from the Navy he was employed as a public servant in New Guinea (as it then was) until 1974. Mr Egan then joined the Commonwealth Public Service and worked in the Department of Defence in Melbourne until January 1989. From 1989 until 27 December 2006 Mr Egan was employed as a racecourse attendant by a number of Victorian racing clubs. Until 2000, the applicant worked 15 to 20 hours per week and earned approximately $12,000 per year.
2. In 2000 Mr Egan had a skin cancer removed from the top of his foot. Following convalescence Mr Egan decided to cease working at Flemington racecourse but to continue working at Caulfield, Sandown, Cranbourne, Pakenham, Mornington and Yarra Glen racecourses. In 2006, due to worsening back pain, Mr Egan reduced his work to the Caulfield, Cranbourne and Mornington courses because at those courses he was able to work in the Committee Rooms, where the conditions were warmer and he was able to sit down from time to time. At this stage Mr Egan was earning approximately $8,000 per year.
3. In May 2006 Mr Egan underwent skin grafts on both shins due to skin cancers. The grafts required hospitalisation and eight days of immobilisation. Mr Egan was off work for about one month and on resuming work Mr Egan had ongoing problems with his legs from the skin grafts in addition to his continuing back pain. After consulting with his doctor Mr Egan decided to cease work. The last day Mr Egan worked was 27 December 2006, at which date he was 78 years old.
4. At that time Mr Egan was receiving a disability pension at 100% of the general rate because the Repatriation Commission (the Commission) had accepted that a number of conditions from which he suffered were war- caused, including, relevantly, non‑melanotic malignant neoplasm of the skin at various sites, chronic solar skin damage and lumbar spondylosis. The Commission had not accepted that Mr Egan’s interverterbral disc prolapse at L4-L5 and mild L3-L4 disc bulge were war-caused. On 18 January 2007 Mr Egan submitted an application to the Repatriation Commission for an increase in his disability pension. On 7 March 2007 a delegate of the Repatriation Commission rejected the application and decided that the pension should continue at 100% of the general rate. On 23 July the Veterans’ Review Board (VRB) affirmed that decision. This matter is an application for review of the VRB decision.
THE HEARING
5. At the hearing Mr Egan was represented by Mr C Thomson of counsel and the respondent was represented by Mr K Rudge, an advocate with the Department of Veterans’ Affairs. The Tribunal had before it the documents lodged by the respondent pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the T‑documents). The Tribunal took the following additional documents into evidence.
for Mr Egan:
· A report from Mr R Westh dated 21 January 2008 - Exhibit A1
· Dr J Dickman’s Clinical Records - Exhibit A2
· Mr Egan’s Statement dated 30 July 2007 – Exhibit A3
· Cranbourne Turf Club letter dated 27 December 2006 - Exhibit A4
and for the Respondent:
· Section 37 (T Documents) - Exhibit R1
· The Transcript of the VRB Hearing of 23 July 2007 – Exhibit R2
· Report of Dr Markov dated 4 February 2008 – Exhibit R3
6. For Mr Egan the Tribunal heard evidence from:
· Mr Egan himself;
· Mrs Helen Egan, his wife;
· Mr Roger Westh, orthopaedic surgeon; and
· Dr John Dickman, the applicant’s treating doctor (who gave evidence by telephone).
7. The respondent called no witnesses to the Tribunal, relying on the following tendered documents:
· the transcript of the VRB hearing of 23 July 2007;
· the report dated 4 February 2008 by Dr Geoff Markov with attached MRI report; and
· clinical notes by Dr Dickman.
THE ISSUES
8. The purpose of this review is to determine whether Mr Egan is qualified for a rate of pension greater than 100 per cent of the general rate; specifically whether he qualifies for the special rate or the intermediate rate of pension.
9. In regard to the special rate of pension, s 24 of the Veterans’ Entitlement Act 1986 (the Act) relevantly states:
(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.
(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.
10. For the intermediate rate of pension, s 23 of the Act contains essentially the same provisions as those contained in s 24. The differences relate to the extent of remunerative work capable of being undertaken by the veteran: which, for the intermediate rate, is 50 per cent or more of the time (excluding overtime) ordinarily worked by persons engaged in work of that kind on a full‑time basis; or 20 or more hours per week. For the special rate of pension the upper limit of remunerative work is eight hours per week. The provisions relating to the cessation of remunerative work for reasons other than incapacity from the war‑caused injury or disease are identical for the intermediate rate and the special rate of pension. For convenience and clarity, the Tribunal will refer only to the provisions of s 24 of the Act, except where the s 23 provisions specifically apply.
11. The respondent conceded that Mr Egan’s circumstances complied with the provisions of s 24(2A) of the Act except for:
· Those provisions relating to the maximum of eight hours of paid work per week which the applicant was capable of undertaking when he ceased his last paid work (s 24(1)(b) as applied by s 24(2A)(c) of the Act) and
· Those provisions which require that loss of earnings by the applicant be attributable to the applicant’s war-caused incapacity alone (s 24(2A)(d) and (e) of the Act).
12. Thus, the first issue is to determine whether Mr Egan is prevented by his war‑caused injuries alone from continuing to undertake the remunerative work he was undertaking (his last paid work) for periods aggregating more than eight hours per week. This is often referred to as the alone test.
13. The next issue is to determine whether he is suffering a loss of earnings that he would not be suffering if he were free of his war‑caused injuries. On this issue s 24(2) of the Act provides that a veteran shall not be taken to be suffering a loss of earnings if the veteran ceased to engage in remunerative work or is prevented from engaging in remunerative work for some reason other than his or her war‑caused incapacity.
Does Mr Egan Satisfy the Alone Test of s 24(1)(c) of the Act?
14. The process to be followed in deciding matters on the alone test is set out in the decision of the Full Court of the Federal Court of Australia in Flentjar v Repatriation Commission (1997) 48 ALD 1, in which Branson J, with whom Beaumont and Merkel JJ agreed, posed the relevant questions arising from s 24(1)(c) of the Act. The questions are:
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?
What is The Remunerative Work that Mr Egan was Undertaking?
15. There is no dispute between the parties that the remunerative work being undertaken by Mr Egan at the time he ceased work was his employment by the Caulfield, Cranbourne and Mornington racing clubs.
Is Mr Egan by reason of his War-Caused Injuries Prevented from Continuing to Undertake that Work?
16. The second question posed by Flentjar is whether Mr Egan is prevented by reason of his war‑caused injuries from continuing to undertake that work. In this case Mr Egan’s accepted war-caused injuries include non-melanotic malignant neoplasm of the skin of various sites, bilateral sensorineural hearing loss, chronic solar skin damage and lumbar spondylosis.
17. In his evidence Mr Egan gave a lengthy history of skin cancers and chronic back pain. In March 2000 a skin cancer was removed from the dorsum of his foot and the defect skin grafted. He was unable to work for three weeks. In May 2006 more extensive surgery was required for cancers involving both shins. These required skin-grafting, immobilisation in below-knee plaster casts and hospitalisation for eight days. Recovery was slow because of the development and persistence of oedema (swelling) of both feet and ankles secondary to the skin grafting. The immobilisation affected his back, increasing the level of pain.
18. Mr Egan’s chronic but tolerable lower back pain deteriorated in 2004 and leg cramps became a significant symptom. Investigations revealed moderately severe spinal canal stenosis due to generalised severe degenerative disease with disc prolapse and a separate disc bulge. He was referred to Mr David Wallace, neurosurgeon, and underwent multi-level laminectomy (L3, 4, 5) following which his symptoms were much improved. The back pain deteriorated slowly until the May 2006 surgery for skin cancer, following which it became more severe. This in combination with constant aching in both legs, secondary to the shin surgery, led Mr Egan, with the advice of his general practitioner, to resign from his part-time work at various Victorian race courses.
19. In her evidence to the Tribunal, Mrs Egan confirmed the deterioration in her husband’s back and leg pain after the shin surgery in May 2006, with generalized weakness and exhaustion after a day’s work. She said that as a result she drove him to and from the various race-courses and had done so since late 1999.
20. Mr Westh, orthopaedic surgeon, saw Mr Egan on 15 January 2008. In his evidence before the Tribunal, Mr Westh adopted his written report (Exhibit A1) and diagnosed severe chronic lumbar spondylosis with associated disc degeneration, all of which were part of Mr Egan’s accepted condition of lumbar spondylosis. In his opinion, the degenerative lumbar spinal disease alone prevented Mr Egan from working for remuneration.
21. Dr Dickman, Mr Egan’s treating general practitioner, was quite clear that in his opinion, Mr Egan suffered from severe degenerative spinal disease and that the resulting pain had caused him to cease work at the end of 2006.
22. Dr Barton is an occupational health physician. He saw Mr Egan at the request of the respondent. The history obtained and the findings on examination were as outlined by Mr Westh. Dr Barton concluded that Mr Egan suffered from extensive lumbar spondylosis and this condition prevented him from working for remuneration.
23. Dr Markov is a rheumatologist. He saw Mr Egan at the respondent’s request and provided a report on 4 February 2008 (Exhibit R3). The history and physical examination findings reported were the same as those described by Mr Westh. Dr Markov attributed Mr Egan’s then current symptoms solely to his lumbar spondylosis and said that Mr Egan’s ability to work was limited only by this condition and his age.
24. The medical evidence is unanimous in support of the evidence of Mr and Mrs Egan, that Mr Egan is prevented from continuing his last paid work as a racecourse attendant because of incapacity from his war-caused disabilities of lumbar spondylosis and skin diseases. The Tribunal finds accordingly.
Are the War-Caused Injuries the Only Factors Preventing Mr Egan from Continuing to Undertake that Work?
25. The third of the Flentjar questions asks whether the war‑caused injuries are the only factors preventing the veteran from continuing to undertake the remunerative work.
26. In his submissions, Mr Rudge contended that Mr Egan’s age, his fatigue at the end of the working day, his shortage of breath, his weight, his generalised degeneration as evidenced by his all-over stiffness, his neck condition and his falls, including his falls from bed, all contributed to Mr Egan’s inability to continue his last paid work.
27. Mr Rudge referred to the decision of the Federal Court in Forbes v Repatriation Commission (2000) 101 FCR 50 in which Nicholson J said:
39. The applicant’s case requires the Tribunal to not have regard to the non war-caused condition where there is a finding that it alone did not stop the applicant from undertaking work. In my view, that course is not open to the Tribunal in the light of the words used in the first limb of s 24(1)(c). The question whether the veteran by reason of the war-caused condition “alone” has been prevented from continuing to undertake remunerative work can only be answered by reference to all the circumstances in which the war-caused condition exists. The fact that a non war-caused condition is not alone causative of such preventative effect does not prevent it having that effect in combination with the war-caused condition. The possibility of combination is recognised in the third conceptual environment identified in the applicant’s case. Furthermore it is consistent with the application by a Tribunal of a common sense approach “with an eye to reality”.
40. As in the case of the present applicant, it is possible that the war-caused condition will be by far and away the more dominant of the causes of the preventative effect where there is also present a non war-caused condition having such effect in combination. The result is that the presence of the latter will deny to a veteran qualification for the special rate of pension.
28. Mr Rudge also referred the Tribunal to the decision in Repatriation Commission v Hendy (2002) 76 ALD 47 in which Whitlam, Emmett and Stone JJ said at paragraph 37:
The consideration of what a veteran would probably have done, absent the service disabilities, is a hypothetical exercise. The language of s 24(1)(c) of the Act directs attention to the question of whether incapacity from the relevant condition alone prevents a veteran from continuing to undertake remunerative work. The provision does not contemplate that other factors are only to be taken into account if they, of themselves, prevent the Veteran from working. The decision-maker is required to take into account any factor that plays a part or contributes to a veteran’s being prevented from continuing to engage in remunerative work.
29. These decisions oblige the Tribunal to take into account any factor that plays a part in or contributes to Mr Egan being prevented from continuing to engage in remunerative work.
30. In regard to conditions other than his war-caused disabilities, Mr Egan’s evidence was that he has suffered from dyspnoea on exertion (walking 300 metres) since early 2006. This did not impact on his job as he worked indoors at ground floor level or had access to a lift at all the racecourses at which he was last working. An episode of neck pain in December 2006 responded to glucosamine, was short-lived and has not recurred.
31. As recorded above, Mrs Egan confirmed Mr Egan’s generalised weakness and exhaustion after a day’s work and that she drove him to and from the various race‑courses and had done so since late 1999. The Tribunal notes however that this did not prevent Mr Egan from continuing his work from 1999 to 2006.
32. Mr Westh was clear in his opinion that the degenerative lumbar spinal disease alone prevented Mr Egan from working for remuneration.
33. Dr Dickman was also quite clear that, in his opinion, Mr Egan suffered from severe degenerative spinal disease and that the resulting pain had caused him to cease work at the end of 2006. Under cross-examination, he explained that the condition of benign positional vertigo that he had diagnosed in Mr Egan in late 2005 was usually episodic and often resolved in a short time, such as a week. In Mr Egan’s case it had been episodic and was not a major problem. Dr Dickman did not believe that Mr Egan’s falls from bed in the last six months of 2006 were related to the vertigo. Dr Dickman had prescribed a bronchodilator inhaler for Mr Egan’s wheeze, rather than his shortness of breath and considered the latter a minor problem. In fact, Mr Egan was relatively fit for his age apart from his degenerative disease of the spine. While osteoarthritis was a generalised process and Mr Egan undoubtedly had changes in other joints, these were not symptomatic. Dr Dickman’s evidence was that Mr Egan had wanted to continue working and would have done so but for his considerable back pain.
34. Dr Barton concluded that, in addition to the effect of lumbar spondylosis on his ability to work Mr Egan suffered a minor contribution from his hearing loss and skin damage. The Tribunal notes that these are also the result of Mr Egan’s war-caused disabilities.
35. In his report, Dr Markov stated that Mr Egan’s ability to work was limited only by his condition of lumbar spondylosis and his age (Exhibit R3). However, the Tribunal notes that Mr Egan’s age was not an issue that prevented him working up to December 2006 and that the conditions of his work, in indoor Committee Rooms with the availability of lifts, did not pose an age-related problem to his continued work.
36. Mr Rudge referred the Tribunal to the Second Reading Speech when the relevant special rate legislation was introduced into Parliament in 1985. The then Acting Minister for Veterans’ Affairs said:
“Since 1920, there has been a special rate of disability pension payable in circumstances where, because of total and permanent incapacity resulting from war service, a veteran has been unable to resume or to continue in civil employment. The special or TPI rate pension was designed for severely disabled veterans of a relatively young age who could never go back to work and could never hope to support themselves or their families or put away money for their old age. It was never intended that the TPI rate would become payable to a veteran who, having enjoyed a full working life after war service, then retires from work possibly with whatever superannuation or other retirement benefits are available to the Australian work force. … If a person has had the usual span of a working life or has retired voluntarily or has left employment for reasons other than accepted disabilities, a TPI pension is not payable. It would be in only very rare cases that any veteran beyond the normal retirement age could be eligible for this pension.”
37. The Tribunal recognises that Mr Egan could be considered to have had the usual span of a working life. However, that is not a criterion provided for in the relevant sections of the Act. The Tribunal can only properly make a decision within the terms of the Act.
38. After considering all the evidence available to it the Tribunal is satisfied that Mr Egan satisfies the alone test of s 24 (1) (b). That is, Mr Egan’s war-caused injuries are the only factors preventing Mr Egan from continuing to undertake his last paid work.
Hours of Remunerative Work
39. Section 24(1)(b) of the Act, and its counterpart in s 23, defines the amount of work able to be undertaken in order to qualify for the special sate or intermediate rate of pension. In his written Statements of Facts and Contentions, the respondent contended that the applicant does not meet the provisions of s 24(2A) of the Act relating to the maximum of eight hours of paid work per week for special rate. The respondent noted that the applicant was capable of working in excess of eight hours of paid work at the time he ceased his last paid work.
40. At the hearing Mr Rudge did not pursue this contention and did not adduce any evidence on that issue. The only evidence available to the Tribunal is Mr Westh’s opinion that the degenerative lumbar spinal disease alone prevented Mr Egan from working for remuneration; Dr Dickman’s opinion that Mr Egan’s pain had caused him to cease work at the end of 2006; and Dr Dickman’s medical certificate (T5, page 42) that Mr Egan is unfit for work indefinitely. These are all definitive statements that Mr Egan is unfit for work, unqualified by considerations of time.
41. From these considerations, and in the absence of any evidence to the contrary, the Tribunal finds that Mr Egan is unable to undertake paid work for periods aggregating more than 8 hours per week.
Is Mr Egan suffering a loss of salary, wages or earnings?
42. The fourth question raised in Flentjar is whether the veteran is 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.
43. There was no dispute between the parties that at the time Mr Egan ceased work he was earning approximately $8,000 per year from his work with the racing clubs, and that since he has ceased work those earnings have ceased. His disability pension was extant before Mr Egan ceased work and remains in place and so does not affect the issue. Therefore, it is clear that as a result of his ceasing work Mr Egan is suffering a loss of earnings and the Tribunal finds accordingly.
CONCLUSION
44. The Tribunal has found that Mr Egan ceased to undertake remunerative work as a result of his war‑caused injuries alone. The Tribunal has found that he is not capable of working for more than 8 hours per week and that he has suffered a loss of earnings as a result. He therefore satisfies the provisions of s 24(1)(c) and s 23(1)(c) of the Act. As a consequence, Mr Egan is qualified for the special rate of pension.
DECISION
45. The Tribunal sets aside the decision under review and substitutes in its place the decision that Mr Egan is qualified for the special rate of pension from the date of his cessation of his work with the racing clubs, being 27 December 2006.
I certify that the 45 preceding paragraphs are a true copy of the reasons for the decision herein of Miss Shanahan, Member and Mr C Ermert, Member
Signed: .................[Sanjiv Shah]......................
AssociateDate of Hearing 27 May 2008
Date of Decision 18 July 2008
Counsel for the Applicant Mc C Thompson
Solicitor for the Applicant Ms J Spina, Williams Winter
Solicitor for the Respondent Mr K Rudge, Department of Veteran's Affairs
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