Everett and Repatriation Commission

[2010] AATA 947

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 947

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/5253

Veterans' Appeals DIVISION		)
Re		Lindsay Everett

Applicant

And Repatriation Commission

Respondent

DECISION

Tribunal Senior Member Jill Toohey
Dr Saw Hooi Toh, Member

Date25 November 2010

PlaceSydney

Decision The decision under review is set aside and in substitution the Tribunal decides that the applicant is entitled to a pension at the intermediate rate with effect from 11 September 2009.

.................[sgd].............................

Senior Member

CATCHWORDS

VETERANS ENTITLEMENTS – intermediate rate of pension – chondromalacia of both patellae and bilateral foot drop – accepted conditions of themselves rendered applicant incapable of 20 hours or more remunerative work – evidence of loss of income – whether applicant prevented from undertaking remunerative work that he was undertaking – applicant had to employ son-in-law- to undertake work that he was doing previously – decision under review set aside

Veterans Entitlements Act 1986, ss 23, 24

Banovich v Repatriation Commission (1986) 69 ALR 305

Birtles v Repatriation Commission (1991) 33 FCR 290

Carter v Repatriation Commission [2001] FCA 992

Doig v Repatriation Commission, unreported, Federal Court of Australia, 18 December 1996

Flentjar v Repatriation Commission (1997) FCA 1200

Repatriation Commission v Butcher [2006] FCA 811

Repatriation Commission v Haskard [2002] FCA 1493

Repatriation Commission v Hendy (2002) 76 ALD 47

Starcevich v Repatriation Commission (1987) 18 FCR 221

REASONS FOR DECISION

25 November 2010	Senior Member Jill Toohey Dr Saw Hooi Toh, Member
Background

1.      Mr Lindsay Everett was working in the army kitchens at North Head in Sydney in 1977 when he slipped and fell, injuring both knees.  Surgery led to complications, with the result that the Department of Veterans Affairs accepted that Mr Lindsay suffered from service-related chondromalacia of both patellae and bilateral foot drop, and paid him a disability pension at 50% of the general rate. 

2.      Mr Everett’s symptoms have worsened over the past 12 years or so.  On 30 July 2008, he applied to the Repatriation Commission (the Commission) for an increase in his disability pension. 

3.      On 22 October 2008, the Commission decided Mr Everett’s rate of pension should be increased from 50% to 70% of the general rate but that he was not entitled to either the special or intermediate rate because he was in full-time employment.

4.      Mr Everett sought review of that decision by the Veterans Review Board (the Board).  By 11 September 2009, when the VRB heard his application, he could no longer work full-time on account of the pain in his knees and feet.

5.      On 11 September 2009, the Board decided Mr Everett’s pension should be increased to 80% of the general rate with effect from 30 July 2008 but that he did not satisfy the requirements for either the special or intermediate rate because he was still undertaking the kind of work he had previously. 

6.      Mr Everett seeks review of the Board’s decision. 

The legislation

7.      To qualify for an intermediate rate of pension, Mr Everett must meet the relevant criteria in s 23(1) of the Veterans Entitlements Act 1986 (the Act).

8.      Section 23(1) requires that a veteran make a claim for an increase in his pension before he turns 65 years and have a degree of incapacity from war‑caused injury of at least 70%.  There is no dispute that Mr Everett satisfies these criteria.

9.      The additional criteria which Mr Everett must satisfy are as follows:

(i)his incapacity from his war‑caused injury must be, of itself alone, of such a nature as to render him incapable of undertaking remunerative work for more than 20 hours per week: s 23(1)(b) and s 23(2)(b); and

(ii)he must be, by reason of incapacity from his war‑caused injury alone, prevented from continuing to undertake remunerative work that he was undertaking and, by reason thereof, be suffering a loss of salary or wages, or of earnings on his own account, that he would not be suffering if free from that incapacity: s 23(1)(c).

10.     Section 23(3) provides that Mr Everett shall not be taken to be suffering a loss of salary or wages or of earnings on his own account, by reason of that incapacity if:

(i)he has ceased to engage in remunerative work for reasons other than his incapacity from that war‑caused injury; or

(ii)he is incapacitated, or prevented, from engaging in remunerative work for some other reason.

The issue

11.     Dr Robin Chase, occupational physician, has given evidence, which the Commission does not dispute, that Mr Everett’s accepted conditions of themselves alone render him incapable now of undertaking remunerative work for more than 20 hours per week.  We accept Dr Chase’s evidence and are satisfied that Mr Everett meets s 23(1)(b) of the Act.

12.     At issue is whether Mr Everett satisfies s 23(1)(c) of the Act. 

13.     Mr Everett’s tax records show that his taxable income has reduced considerably over the past five years.  There is no dispute that his accepted conditions have reduced his capacity to engage in remunerative work and that he has suffered a loss of earnings on his own account that he would not be suffering were it not for that incapacity.

14.     The Commission contends, however, that Mr Everett fails to satisfy all of s 23(1)(c) because he is not prevented from continuing to undertake remunerative work that he was undertaking.

15.     We have to determine whether Mr Everett is prevented from continuing to undertake remunerative work that he was undertaking.

Mr Everett’s evidence

16.     When he left school, Mr Everett undertook an apprenticeship as a baker and was employed as a foreman before entering the army.  He had eligible service from October 1974 to April 1978, when he retired on account of his accepted disabilities.  After a period recuperating, he resumed work as a chef but was in callipers because of his foot drop.  He worked as a chef for several relatively brief stints: at a hospital, at a Returned Servicemen’s Club, and at two nursing homes before moving to the Central NSW coast where he worked as a chef.

17.     In about 1986, Mr Everett started work at Edgell Birdseye where he was involved in product development.  The position did not involve a lot of walking and, during this period, he had intensive physiotherapy and was able to remove the callipers.  He worked for the company until 1999 when it relocated to Melbourne and he was retrenched.

18.     After leaving Edgell Birdseye, Mr Everett worked as a production manager for 12 months, then as a bakery manager, but he found the long hours standing were damaging his feet.  He left and went into a mobile video business but found that hard on his knees.  He then worked for Chickadee Chicken in a supervisory role but had to give that away because the position involved long hours standing, and required safety boots which he could not wear.  Around this time, his medication had to be increased and he became concerned about work safety and using heavy equipment.

19.     Mr Everett then undertook a small business training course with a view to setting up a property maintenance business.  He worked long hours to establish the business, initially putting in 40 to 50 hours each week working and quoting on jobs.  Most of his work has come from a real estate agent which contracts him to undertake maintenance on rental properties. 

20.     Mr Everett gave evidence that, since establishing his business, his feet and knees have deteriorated and he has had to cut back his hours as well as the type of work he can do.  His evidence is supported by his general practitioner, Dr Bohdan Shehovych, as well as by Dr Chase. 

21.     In July 2008, when he applied for an increase in pension, Mr Everett was able to work 20 to 30 hours a week.  However, by the time of the Board’s hearing in September 2009, he gave evidence that there were “very, very few, if ever” weeks when he could work more than 20 hours.  He gave evidence before us that he has not worked a 20 hour week for at least 12 months; he can now do only about 12 hours in a good week, 15 at most, and less if he cannot sleep. 

22.     Mr Everett gave evidence that the pain related to his foot drop becomes severe when he wears shoes, and he trips over; he has similar pain in his knees.  He can no longer carry heavy weights, walk long distances or climb ladders.  He cannot wear safety boots, which limits the kinds of maintenance work he can do.  He takes a range of medications which help him to walk but which make him drowsy and affect his concentration.  Consequently, he cannot drive for extended periods or operate heavy equipment.  He has to take measurements three times to be sure they are accurate.  He and his wife do the paperwork for the business but she does most of it because of his poor concentration. 

23.     Mr Everett’s son-in-law has had to come in to the business and do the majority of the work.  Whereas previously Mr Everett was the operator and an active participant in the business, he is now an assistant to his son-in-law.  Asked to describe his current work activity, he said that, earlier in the week of the hearing, he had bought a door jamb and helped his son-in-law to fit it.

24.     In December 2008, Dr Shehovych reported to the Board that Mr Everett’s pain had escalated.  At the time, he was working 15 to 20 hours a week but, in Dr Shehovych‘s opinion, working those hours was aggravating his knee condition, and especially the pain in his feet, and he should work fewer hours.

25.     Mr Everett gave evidence that he continues to work as much as he can because he has a mortgage and he cannot afford not to work.  He uses a range of pain-killing medication including morphine patches.  They help him to walk but they make him drowsy and affect his concentration.  His sleep is interrupted by pain on most nights and he is usually tired within an hour of waking. 

26.     Mr Everett says he no longer participates in social activities with family or friends and his increased pain and medication leave him drowsy, lethargic and depressed.

27.     The Commission does not take issue with Mr Everett’s evidence and we have no reason to doubt his claims.  We accept his evidence.

Other evidence

28.     Dr Chase provided a written report and gave oral evidence.  He believes that assessment and treatment by a pain specialist should reduce the level of pain that Mr Everett suffers and, if such treatment is successful, it is possible that he will be able to increase the hours he works for up to 20 hours a week but not more. 

29.     Dr Chase confirmed that the condition of Mr Everett’s knees and feet prevents him from engaging in work that requires prolonged standing and walking, or walking over rough or broken ground, and he is restricted in kneeling and squatting.  Dr Chase believes he could be retrained, within the limits of his disabilities, for a sedentary position such as a console operator at service station but, even then, he could not work 20 hours or more hours a week. 

30.     Dr Shehovych reported to the Board on 13 December 2008 that the continued degeneration of Mr Everett’s knees and the extreme pain in his feet had “impacted enormously” on his work and had reduced the hours he could work:

Due to pain and loss of function … he is not only physically incapable of working full time but due to work safety has had to restrict the type of work he can do.  Safety boots cannot be worn as the weight of the boot causes his feet excruciating pain.  He definitely should not climb ladders, do roof work / gutters etc as these are all potential hazards if his foot should “drop” or his knee lock.  This limits work available to him and has resulted in reduced jobs from the real estate.  

31.     The transcript of the Board’s hearing on 11 September 2009 shows that Mr Everett told the Board that the real estate company continued to employ him but said “they give me work that I can’t do so I get my son-in-law to help me with it …”. 

32.     In a letter dated 12 December 2008, Ms Bonello, the property manager for Ray White, Gosford, states:

When we started giving work to Lindsay, we intended that he would undertake most of our handyman work required however over time he has had to decline some of the jobs provided due to an old knee and foot injury and the constant pain he has been suffering.

Due to Lindsay’s injury we now only offer Lindsay work that we know he is able and happy to do, we also had to seek other contractors to be able to do the jobs that he is unable to carry out.    

Is Mr Everett prevented from continuing to engage in remunerative work

33.     The Tribunal’s first task is to determine what was the relevant remunerative work that Mr Everett was undertaking in order to determine whether it has in fact ceased: Flentjar v Repatriation Commission (1997) FCA 1200; and see Repatriation Commission v Haskard [2002] FCA 1493.

34.     It is not in dispute, and we accept, that Mr Everett’s accepted conditions prevent him from undertaking the kinds of remunerative work he undertook previously, before he started his property maintenance business. 

35.     Mr Everett has described the remunerative work that he has been undertaking most recently as “property maintenance”. 

36.     The Commission contends that Mr Everett is still engaged in property maintenance work for the real estate agent and so is not prevented from continuing to engage in remunerative work within the meaning of s 23(1)(c).

37.     For Mr Everett it is contended, firstly, that the remunerative work he was undertaking was full time work and that he is now prevented from undertaking more than part time work.  Secondly, it is contended that his kind of work has changed because the range of tasks he can perform is now restricted and he is no longer the operator of his business but is an assistant to his son-in-law.

38.     Mr Everett’s first contention is said to find support in comments by Hill J in Haskard (above). Mr Haskard’s claim was made under s 24(2A) which imposes particular requirements on a veteran over 65 but Hill J’s comments about reduced hours of work are relevant to a claim under s 23(1) (see Hill J at [28]).

39.     Mr Haskard and his son owned a real estate business as part of which he undertook property valuations.  At the same time, he worked as a real estate valuer on his own account.  After the business was sold, he continued to undertake property valuations on his own account, from home.  Over some 18 or so years, the number of valuations had gradually decreased from around six per month to six per year. 

40.     Hill J said (at [31]):

If the last paid work was, as here, acting as a property valuer on his own account, the question to be asked was whether that last paid work had ceased or whether it has continued.  In the facts here it has not ceased but continued.  All that has happened is that the quantity has declined but that does not mean that the work itself has ceased. 

41.     He then said (at [32]):

During the course of the argument, I was attracted to the possibility that a veteran who had worked full-time but whose ability to work full time was impaired because of war-caused injury so that he or she was only able to work part time, might be said to have been prevented by reason of incapacity from continuing to undertake his initial.

42.     Hill J was “inclined to think [that construction] might be correct” but did not have to determine the question because, by the time Mr Haskard made his application, he had already reduced his work from full-time to intermittent valuations.

43.     At paragraph 38, Hill J returned to the question of full-time work reduced to part-time and said:

… I should mention that Branson J in [Carter v Repatriation Commission [2001] FCA 992] expressed doubt on the question whether full time work as a partner is an accounting practice would be characterised as work of the same kind as limited an irregular audit work undertaken on a contract basis. With respect, I agree with the comments made by her Honour at page 348. … I emphasise the point because of the doubt which I have as to whether work on a full time basis and work on a part time basis should be characterised as work of the same type.

44.     Hill J’s comments are obiter only but, in any event, they do not assist Mr Everett.  By the time of his application, he had already reduced his work to between 20 and 30 hours per week compared to 40 to 50 hours a week when he started his business in late 2006.  He was no longer working full time by the time of his application.  What happened during the assessment period is that his hours reduced even further. 

45.     For this reason, even if the construction contended for by Mr Everett is correct, his first contention cannot succeed.        

46.     Mr Everett’s second contention is, in effect, that the limitations imposed by his accepted conditions have changed the nature of the work he was doing substantively so that it is no longer the remunerative work he was doing previously. 

47.     The Tribunal should interpret “remunerative work” broadly: Birtles v Repatriation Commission (1991) 33 FCR 290. The phrase “remunerative work that the veteran was undertaking” does not refer to a particular job with a particular employer but to the type of work the veteran was undertaking or his field of remunerative activity: Banovich v Repatriation Commission  (1986) 69 ALR 305; Starcevich v Repatriation Commission (1987) 18 FCR 221; Repatriation Commission v Hendy (2002) 76 ALD 47.

48.     In Repatriation Commission v Butcher [2006] FCA 811, Besanko J said at [43] that the characterisation of the type of remunerative work that a veteran was undertaking “must be made with an eye to reality, and as a matter in respect of which common sense is the proper guide”:

An unduly narrow definition may result in veterans receiving the pension at the special rate in circumstances not contemplated by the legislature. An unduly wide definition may result in veterans being refused the pension at the special rate in circumstances in which, in reality, they are not working (and thereby not receiving wages) solely because of war-caused injuries or diseases.

49.     Work can often be described in various ways.  Mr Everett describes his work as “property maintenance”.  The Board described the same work as “handyman”. 

50.     In Doig v Repatriation Commission, unreported, Federal Court of Australia, 18 December 1996, the applicant had worked as an admissions and accounts officer in a hospital.  Lindgren J said at p 9, that the “type of work” or “field of remunerative activity” might be accurately described on more ways than one:

It seems to me that the appropriateness of any particular description of work that has been undertaken is governed by the purpose of the description.  In cases under para 24(1)(c), that purpose is related to capacity to work.

51.     A difficulty in this case is that the remunerative work that Mr Everett was undertaking and still undertakes might be described generally as “property maintenance” or “handyman” work.  Viewed simply by that description, he is continuing to undertake that work.  However, the evidence shows that, within the assessment period, the work that Mr Everett he has been undertaking has changed substantively and those very broad descriptions do not adequately convey the change in his work capacity.

52.     Whereas previously Mr Everett ran his own business, which he had established himself, and was able to undertake all forms of property maintenance, his accepted conditions alone mean that he can no longer run the business effectively.  His wife does most of the paperwork because he can no longer concentrate properly.  He has had to engage his son-in-law to do most of what he previously did himself.  What he can do himself is relatively minor and he has effectively become an assistant to his son-in-law. 

53.     Whereas previously the remunerative work that Mr Everett was undertaking could fairly have been described along the lines of “owner/operator of property maintenance business and principal handyman”, that work has effectively ceased and he is now, for practical purposes, an “assistant handyman”. 

54.     We are satisfied that the substantive change from the work that Mr Everett was undertaking to what he is able now to undertake is such that the remunerative work that he was undertaking has ceased.  We are satisfied that he meets s 23(1)(c) of the Act.

55.     When Mr Everett lodged his application for an increase in his pension in July 2008, he was able to work from 20 to 30 hours each week.  The Commission submits, and Mr Everett concedes, that the earliest date of effect of a favourable decision is 11 September 2009.  That was the date when he told the Board that he could no longer work more than 20 hours per week and is the earliest evidence of changes that mean that he satisfies  23(1)(c).  We agree.

Conclusion

56.     We set aside the decision under review and decide instead that Mr Everett is entitled to the pension at the intermediate rate with effect from 11 September 2009.

I certify that the 56 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Jill Toohey and Dr Saw Hooi Toh, Member.

Signed: .......................[sgd].........................................
  Associate: Diana Weston

Date of Hearing  27 October 2010 

Date of Decision  25 November 2010
Solicitor for the Applicant          Mr T Latimore, Legal Aid Commission
Solicitor for the Respondent     Mr N Bunn, Repatriation Commission