Hall v Repatriation Commission

[1994] FCA 458

NOEL TERRANCE HALL v. REPATRIATION COMMISSION
No. QG127 of 1992
FED No. 458/94
Number of pages - 11
Defence and war
(1994) 33 ALD 454

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
SPENDER J

CATCHWORDS

Defence and War - ex-servicemen (veterans) - pensions, allowances and other benefits - qualification for benefits - date at which veteran qualified for benefit at 100% of the General Rate - date at which veteran's entitlement to such pension is to be assessed - whether retirement from Army in 1985 in order to secure economic benefits which could have been lost due to war-caused injury or disease was an operative cause of his unemployment at later times - work - nature of requirement that veteran genuinely seek to engage in remunerative work.

Veterans' Entitlements Act 1986 ss. 19, 24.

Jebb v. The Repatriation Commission (1988) 80 ALR 329

Starcevich v. Repatriation Commission (1987) 18 FCR 221

Banovich v Repatriation Commission 69 ALR 395

HEARING

BRISBANE, 6 June 1994
#DATE 22:6:1994

Counsel for the applicant: Mr K. J. McGhee
Instructed by: Sampson and Assoc.

Counsel for the respondent: Mr S. L. Doyle
Instructed by: Australian Government Solicitor

ORDER

The Court orders that:

(i) the appeal be allowed;

(ii) the matter be remitted to the Tribunal to be heard and determined according to law, with such further or other evidence as the parties might wish to place before it;

(iii) the respondent pay the applicant's costs of the application, to be taxed if not agreed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

SPENDER J This is an appeal by Noel Terrance Hall from a decision of the Administrative Appeals Tribunal (constituted by Mr K. L. Beddoe, Senior Member, Brigadier I. R. W. Brumfield, Member, and Dr J. B. Morley, Member) given on 6 August 1992 wherein the Tribunal directed that the decision under review (being a decision of the Repatriation Commission made on 31 January 1990 that he should receive pension at 100% of the General Rate) be varied by deciding that the applicant is entitled to pension at 100% of the General Rate with effect from 24 July 1985.

1. The appeal is in the original jurisdiction of the Federal Court and, pursuant to s. 44 of the Administrative Appeals Tribunal Act 1975, lies only on a question of law. The Tribunal determined that Mr Hall was not prevented from engaging in remunerative work because of service related disabilities alone.

2. On 24 August 1989, the veteran, Mr Hall, applied for an increase in his disability pension. In that application, he indicated his current rate of disability pension was 80-90%. It is accepted by the parties that this application comprehended an application to an entitlement to either the Special rate of pension or the Intermediate rate of pension provided for by ss. 23 and 24 respectively of the Veterans' Entitlements Act 1986 ('the Act').

3. Mr Hall was born on 13 December 1935 and as a consequence he is not entitled to the Extreme Disablement Adjustment pursuant to s. 22 of the Act.

4. Mr Hall served in the Army for a period of some thirty-three years, rising to the rank of major. He was discharged on 26 March 1986 on non-medical grounds. As the Veterans' Review Board noted, Mr Hall was a career soldier who took a voluntary decision to finish his army career in March 1986. The Review Board said:
   

"Mr Hall was not discharged from the army medically unfit. He openly admits that he resigned his Commission in the army at the time that he did to maximise payment of superannuation benefits in the manner that he desired. He expresses an opinion that if he had continued in the army in which he may have served for another four years, he may have been discharged on medical grounds, and such a discharge would not have allowed him to maximise his superannuation benefits and order his affairs in the manner which he personally desired."

1. There is now no argument advanced on Mr Hall's behalf that he ceased to be a member of the army in which he had served for some thirty-three years because of incapacity arising solely from service related disabilities/diseases. It seems accepted that Mr Hall's desire to maximise superannuation benefits was a leading factor motivating his decision to resign his commission at the time that he did. Mr Hall in fact commuted his pension on 25 March 1986 to receive a lump sum and a reduced pension.

2. Mr Hall rendered operational services overseas from 31 May 1965 to 5 June 1965, from 1 June 1967 to 2 June 1967 and from 13 January 1971 to 7 October 1971. He also had eligible service in respect of non-operational Defence Service over the period 7 December 1972 to 26 March 1986. Mr Hall's army service is notable for his rise through the ranks from private to Warrant Officer Class 2, and then being commissioned as a Lieutenant, with subsequent promotions to Captain and Major. He served in Borneo in 1966, and in South Vietnam in 1971. Mr Hall was awarded an MBE in 1982 for his exceptional service in the field of personnel management.

3. This appeal turns on the proper interpretation of s. 24 of the Act, which relevantly provides:
   

"(1) This section applies to a veteran, other than a veteran to whom section 25 applies, 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;

(b) 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.

(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."

1. Section 9 of the Act defines "war-caused injuries or diseases". Section 13 provides, inter alia, that where a veteran has become incapacitated from war-caused injury or war-caused disease, the Commonwealth is liable to pay, in the case of incapacity of a veteran, pension to the veteran in accordance with the Act.

2. Section 19 relevantly provides:
   

"(1) Where a claim or application is submitted to the Commission in accordance with subsection 17(2), the Commonwealth shall:

(a) consider all matters that, in the Commission's opinion, are relevant to the claim or application; and

(b) subject to this section, determine the claim as provided by subsection (3) or the application as provided by subsection (4).

...

(3) The Commission shall determine a claim for a pension as follows:

(a) first, the Commission shall determine whether the claimant is entitled to be granted a pension in respect of:

(i) the incapacity of a veteran from war-caused injury or war-caused disease, or both; or

(ii) the death of a veteran that was war-caused;

(b) then, if the Commission determines that the claimant is so entitled, the Commission shall proceed as set out in subsection (5).

(4) The Commission shall determine an application for a pension at an increased rate in accordance with subsection

(5).

(5) Where paragraph (3)(b) applies in respect of a claim or subsection (4) applies in respect of an application, the Commission shall assess, in accordance with whichever of sections 22, 23, 24, 25, 27 and 30 are applicable;

(a) the rate or rates at which the pension would have been payable from time to time during the assessment period; and

(b) subject to subsection (6), the rate at which the pension is payable from the date of the determination; and shall make a determination approving the payment of pension in accordance with that assessment."

1. Section 22 provides that the general rate of pension is payable to a veteran other than a veteran to whom ss. 23, 24 or 25 applies. The rate at which that pension is payable is the rate per fortnight that constitutes the same percentage of the general rate as the percentage determined by the Commission to be the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, as the case may be: section 22(2). Section 23 provides for an Intermediate Rate of pension if the incapacity from war-caused injury or war-caused disease, or both, is of itself alone of such a nature as to render the veteran incapable of undertaking remunerative work otherwise than on a part-time basis or intermittently. The Special Rate of pension, for which s. 24 of the Act provides, applies if, inter alia, the degree of incapacity is at least 70% (as is the case with Mr Hall) and the veteran is totally and permanently incapacitated; that is to say, Mr Hall is incapable of undertaking remunerative work for periods aggregating more than eight hours per week, and Mr Hall 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 he was undertaking.

2. The Tribunal in its reasons said that "on the evidence, ...the applicant applied for discharge because he wished to ensure he retained the right to commute his pension entitlement. " The Tribunal acknowledged that in 1989 Mr Hall was hospitalised for lower back problems. The Tribunal said:
   

"The reality, on the evidence before us, is that his retirement activities have been severely restricted by the deterioration of his medical condition."

The Tribunal noted:

"The applicant has made attempts to obtain employment but those attempts appear to have been desultory and self serving. That is not to reflect adversely on the applicant. It does, however, reflect his medical condition."

1. This finding identifies a crucial question on this appeal. The Veterans' Review Board referred to his efforts to obtain employment as going "through the motions of attempting to seek some form of remunerative activity". It said, referring to an example of Mr Hall's job seeking, that:
   

"...one could not reasonably conclude in any circumstance that this was a whole hearted effort to genuinely re-enter the work force."

and said of this:

"...the Board would point out that it is aware that there is a view in some quarters that a person who is so afflicted by service related incapacity that he cannot actively seek to engage in remunerative activity does satisfy that criteria detailed in Section 24(2)(b) of the Act for this very reason. This view is not universally held, nor should it be inferred that all members or any members of the existing Board subscribe to this legislative interpretation."

1. There is conflicting medical evidence as to Mr Hall's condition prior to 7 March 1990. A Dr Carlyle on 20 August 1987 expressed the view that the applicant was "unemployable and due to the nature of the condition, requiring the discharge from the Army, should not be seeking employment". On the other hand, a Dr Champion, in July 1988 diagnosed a consequential severe chronic pain syndrome but found that Mr Hall was not in distress although he did have dizzy turns during the consultation. It seems clear that the Tribunal accepted that the applicant's condition deteriorated during 1989.

2. The Tribunal accepted the evidence of Dr Sharwood, an orthopaedic surgeon, who had examined Mr Hall on 7 March 1990 when the applicant was 54 years of age. Dr Sharwood's view was that the applicant was severely disabled with regard to his back problems which stemmed from injuries twenty years earlier, there was very significant lumbar spine disease and a neck fusion. Mr Hall's problems were diagnosed by Dr Sharwood as related to his lumbar spine with disc degeneration causing nerve root irritation and sciatica, and Dr Sharwood expressed the opinion that the applicant -
   

"is totally unemployable and will never be able to do any significant work."

1. The Tribunal was satisfied, in the light of Dr Sharwood's report, that the applicant -
   

"is now totally and permanently incapacitated so as to render the applicant incapable of undertaking remunerative work."

1. The Tribunal expressed its view that Mr Hall was so incapacitated from 7 March 1990, the time of Dr Sharwood's report, but the Tribunal expressed the view:
   

"We do not consider there is any basis for being so satisfied that was the case at the date of either application."

1. The reference to "either application" is a reference to an application made on 24 October 1985 and the application on 24 August 1989 to which reference has already been made. The Tribunal, nonetheless, said:
   

"Clearly the applicant's condition deteriorated after his discharge but Dr Sharwood's report is in our view the determinative factor in the material before us."

1. It is necessary to set out the gravamen of the Tribunal's conclusion which are contained in paragraphs 27, 28 and 29 of their findings.
   

"27. We turn to paragraph 24(1)(c). Mr Goldrick, who appeared for the respondent, submitted that we are required to consider the position as at the time the applicant was discharged from the Army. Given that the first application was lodged prior to the date of discharge we think this must be correct (c.f. Repatriation Commission v. Braund 23 ALD 591). The second application was lodged on 30 August 1989 i.e. approximately six months prior to Dr Sharwood's report.

28. Insofar as the applicant's early and voluntary discharge from the army is concerned we accept the evidence that it was his accepted disabilities which caused his concern that he may be discharged early on medical grounds with consequential loss of right to commute part of his pension to a lump sum. Those disabilities were therefore not the only causative factor in the voluntary retirement. The fact remains that the applicant took voluntary retirement for essentially economic reasons. He had not been asked to retire nor had he been threatened with retirement. His decision to retire was motivated by the financial considerations. In those circumstances we take the view that paragraph 24(2)(a) of the Act applies to the applicant so that he is not eligible under paragraph 24(1)(c). The same reasoning applies in relation to paragraph 23(1)(c).

29. In relation to the second application we have come to the conclusion that the applicant's loss of remunerative work as at August 1989 and thereafter is attributable to two factors - the applicant's service related disabilities and his desire to ensure that he was eligible for a lump sum payment by commutation of portion of his pension. It cannot be said therefore that it was the disabilities alone which prevented the applicant continuing to engage in his remunerative employment with a consequential loss of earnings."

1. In my opinion, it seems clear from paragraph 27 that the Tribunal focussed on Mr Hall's condition at the time prior to his discharge from the army. This was an error. It is, in my opinion, necessary for this Court to consider the entitlement of Mr Hall at any time up until the date of the Tribunal's decision. In Jebb v. The Repatriation Commission (1988) 80 ALR 329, Davies J said at 333:
   

"The Tribunal looked at Mr Jebb's entitlement to a pension only as at 8 November 1982 (this being the date on which Mr Jebb lodged the claim which became the subject of the decision by the Repatriation Commission). It did so in purported reliance on the decision of Federal Court of Australia in Banovich v. Repatriation Commission (1986) 69 ALR 395. For this reason, it did not turn its attention to Mr Jebb's entitlement to a pension between that date and the date of the decision by the tribunal. During that period, Mr Jebb's condition deteriorated markedly... Some decisions of the tribunal have taken a like view of the decision in Banovich: see Re Ireland and Repatriation Commission (1987) 12 ALD 519; Re Morris and Repatriation Commission (AAT, 22 April 1987, Q86/267, unreported) and Re Dooley and Repatriation Commission (1987) 13 ALD 430. However, the general approach of the tribunal has been to regard the administrative decision making process as a continuum and to look upon the tribunal's function as a part of that continuum so that, within the limits of a reconsideration of the decision under review, the tribunal considers the applicant's entitlement from the date of application, or other proper commencing date, to the date of the tribunal's decision. That function was enunciated in Re Tiknaz and Director-General of Social Services (1981) 4 ALN No. 44. The approach there taken has since been generally adopted. In the repatriation jurisdiction, it was applied after Banovich in Re Easton and Repatriation Commission

(1987) 12 ALD 777, where (at 778) the tribunal discussed the decisions in Banovich; Delkou v. Repatriation Commission

(1986) 69 ALR 406 and Lucas v. Repatriation Commission

(1986) 69 ALR 415 and said:

'The ambit of a review by the tribunal is necessarily influenced by the ambit of the steps and proceedings that have taken place prior to its review, for the function of the tribunal is to review a decision. But provided that the matter is within the ambit of its jurisdiction as a review authority, the general practice of the tribunal is to take account of events that have occurred up to the date of the decision. Indeed, s. 43(1) of the Administrative Appeals Tribunal Act 1975

(Cth) expressly states, 'For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision...'"

1. His Honour's reasoning and conclusion that the applicant's entitlement is to be considered from the date of the application or other proper commencing date to the date of the Tribunal's decision was expressly followed by a Full Court of the Federal Court of Australia (Sweeney, Davies and Ryan JJ) in Repatriation Commission v. Reid (1990) 95 ALR 728.

2. It is clear the Tribunal found the appellant to be totally disabled from March 1990; so much appears from paragraph 26 of its reasons. From that date, as a matter of fact, Mr Hall satisfied the first limb of 24(1)(c) of being prevented from continuing to undertake remunerative work of the kind he had once engaged in. In Starcevich v. Repatriation Commission (1987) 18 FCR 221 at 225, Fox J said:
   

"Banovich v. Repatriation Commission (1986) 6 AAR 113; 69 ALR 395 (Banovich) was a case decided by the Full Court of this Court under Sch. 2 of the Repatriation Act, which set out the entitlement to a TPI pension and was in terms very similar to s. 24. It was there held that the 'work' need not be the last employment, or work generally, but related to a 'type' of work previously undertaken. It was also said that 'the loss referred to in subs (1)(b)(iii) may be caused either by a loss of existing employment or by an inability to obtain new employment'."

1. In Banovich v Repatriation Commission 69 ALR 395, the Full Court (Fisher, Beaumont and Wilcox JJ) said, at 402:
   

"We accept that the loss referred to in para (1)(b)(iii) may be caused either by a loss of existing employment or by an inability to obtain new employment. There is no difficulty in regarding either circumstance as preventing the member 'continuing to undertake' remunerative work. But it is, in our opinion, erroneous to read the phrase 'remunerative work that the member was undertaking' as referring to a particular job with a particular employer. The term 'remunerative work' is used in the Schedule in a context which indicates an intention to refer to work generally: see, for example, para (1)(b)(ii), para (2)(b), para (3), Consistently with that use, the phrase 'remunerative work which the respondent was undertaking' should be read as a reference to the type of work which the member previously undertook and not to any particular job. It follows that a member's loss of particular employment for a reason unrelated to a war disability would never destroy a member's subsequent entitlement to claim a special rate pension; the question would remain, at the relevant date for determination of a claim, whether the member was prevented by his or her war-related incapacity - and by that incapacity alone - from continuing in that field of remunerative activity."

1. It was submitted on behalf of the Commission that Mr Hall failed to satisfy s. 24(2)(a)(ii) which disqualifies a veteran from receiving the Special rate of pension if he or she ceased to engage in remunerative work for reasons other than his or her war service disabilities. In this context, it was submitted that the Tribunal, when it said at paragraph 29 of its reasons that -
   

"The applicant's loss of remunerative work as at August 1989 and thereafter is attributable to two factors; the applicant's service related disabilities and his desire to ensure that he was eligible for a lump sum payment by commutation of his pension"

was adopting the view that Mr Hall did not satisfy s. 24(2)(a)(ii).

1. For myself, I do not read paragraph 29 of the Tribunal's reasons in this way. Mr Hall's desire to ensure his eligibility for a lump sum payment by commutation of a portion of his pension was a circumstance that applied in 1986. Mr Hall's inability to obtain remunerative work subsequent to August 1989 or, more importantly, from 7 March 1990 (the date of Dr Sharwood's assessment) cannot in any sensible way be attributed to any motivation concerning commutation of portion of the pension. In my view, the position that obtained prior to Mr Hall's resignation from the army tainted the Tribunal's consideration of the position after Mr Hall's health had significantly deteriorated in 1989, and the position at the time of Dr Sharwood's assessment in March 1990.

2. It was submitted on behalf of the Commission that his unemployability after 7 March 1990 was attributable to factors other than his service related disabilities: in particular, his time out of the workforce. This submission, in part, is based on a report from an officer of the North Brisbane Area Office of the Commonwealth Employment Service dated 12 February 1990, which commences:
   

"Mr Hall has been registered with Caboolture CES since 9.11.89. During this period of time he has been actively seeking employment which his Physical condition allows him to undertake."

The report then listed his physical conditions and continued:

"Also, Mr Hall's term of unemployment- 4 years, together with the fact that he has no work history in civilian employment and has virtually no physical capacity to undertake employment, I consider Mr Hall to be uncompetitive in the labour market and that his likelihood of obtaining/retaining employment to be nil."

1. It was submitted that it was open to the Tribunal to accept that a factor in his unemployability post 7 March 1990 was the fact that he had had no work history in civilian employment and had been unemployed for four years. It should be pointed out that the question of capacity for remunerative work is not the same question as the obtaining of employment in fact, and it would be wrong to identify reasons for the latter as necessarily relevant or applicable to the former question.

2. In the view I take of the matter, paragraph 29 of the Tribunal's reasons indicates error. On no view of the evidence could his unemployability subsequent to August 1988 be attributable in part to Mr Hall's desire in 1985 to ensure that he was eligible for a lump sum payment by commutation of portion of his pension.

3. The tenor of Dr Sharwood's report of 7 March 1990, which is subsequent to the report from the CES, is that Mr Hall was then totally unemployable as a consequence of his war related disabilities and that he would thereafter never be able to do any significant work, and Dr Sharwood also expressed the view that -
   

"In fact he is unable really I believe to do anything around the home."

1. Dr Sharwood could see nothing that could be done to improve the situation of Mr Hall as at 7 March 1990 "beyond that which it is now". In those circumstances, it seems difficult to avoid the conclusion that, in the words of s. 24(1)(c) Mr Hall was "by reason of incapacity from... war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking...". That, however, is a conclusion which properly is a matter for the Tribunal rather than this Court.

2. While my view is that Dr Sharwood's report is very strong evidence touching on the questions to which s. 24(2)(a) and (b) are directed, nonetheless the entitlement of Mr Hall to a pension at the Special Rate is a matter for the Tribunal to determine as a matter of fact rather than one which the Court should determine.

3. It seems to me that the question of whether a veteran has been "genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing to so seek" has to be addressed in a realistic way, having regard to the nature and extent of the incapacity. Many veterans are permanently incapacitated by war-caused injury or disease for any form of remunerative work, and the requirement that such persons should be genuinely seeking work seems to involve something of a charade. While it may be that Mr Hall was advised to pursue his attempts at seeking employment through the CES by advice which focussed on the desirability of efforts to seek remunerative work rather than on any realistic prospect that such work might be obtained, the report by the CES does not seem to cast doubt on the willingness of Mr Hall to accept work if any might be found for him.

4. For these reasons the appeal should be allowed. The matter is remitted to the Tribunal to be heard and determined according to law, with such further or other evidence as the parties might wish to place before it. The composition of the Tribunal is a matter for the Tribunal. The respondent should pay the applicant's costs of the appeal.