Hannebery and Repatriation Commission
[2011] AATA 120
•23 February 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 120
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/4742
VETERANS' APPEALS DIVISION ) Re BERNARD HANNEBERY Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Mr John Handley, Senior Member Date23 February 2011
PlaceMelbourne
Decision The Tribunal affirms the decision under review. John Handley
Senior Member
VETERANS’ AFFAIRS ‑ claim for increase in rate of pension to the special rate – applicant under 65 years when claim made –accepted and non-accepted injuries and diseases – earthmoving contractor ‑ whether war-caused injuries or diseases alone prevent applicant from undertaking remunerative work of more than 8 hours per week
Veterans’ Entitlements Act 1986 s 24(1)
Flentjar v Repatriation Commission (1997) 48 ALD 1
Repatriation Commission v Hendy (2002) 76 ALD 47
Repatriation Commission v Smith (1987) 15 FCR 327
Cavell v Repatriation Commission (1989) 9 AAR 534
REASONS FOR DECISION
23 February 2011 Mr John Handley, Senior Member 1. On 22 September 2003 Mr Hannebery, the applicant in these proceedings, made a claim upon the respondent for acceptance of the conditions of alcohol abuse, generalised anxiety disorder and hypertension. The claim was rejected on 8 January 2004. The decision to reject the applicant’s claim was affirmed by the Veterans' Review Board (VRB) on 10 July 2007. The applicant challenged the VRB’s decision in this Tribunal (Nº 2007/3681) and a decision was made pursuant to s 42C(1) of the Administrative Appeals Tribunal Act 1975 on 13 June 2008. The parties agreed that the conditions claimed by the applicant were war-caused with effect from 22 June 2003. It was also agreed that the application be remitted to the respondent for calculation of the rate of disability pension that would consequently be paid to the applicant.
2. On 11 September 2008 the respondent assessed pension at 80 per cent of the general rate with effect from 22 June 2003. The applicant sought review by the VRB. On 11 September 2009 the VRB decided that the applicant was entitled to pension at 80 per cent of the general rate from 22 June 2003 and at 90 per cent of the general rate from 28 November 2007. On that date, Dr Epstein, a consultant psychiatrist assessed the applicant under Table 4 of the Guide to the Assessment of Repatriation Pensions and delivered a report dated 3 December 2007. The VRB adopted his assessment and increased the rate of pension to 90 per cent.
3. By these proceedings the applicant applies to review the decision made by the VRB made on 11 September 2009. He seeks pension at the special rate pursuant to s 24 of the Veterans’ Entitlements Act 1986 (the Act).
BACKGROUND
4. The applicant was born on 15 June 1945. On 22 September 2003 he was aged 58. He was then self-employed and working. In addition to the accepted disabilities of generalised anxiety disorder, alcohol abuse and hypertension, the applicant has a number of other accepted disabilities which were not referred to in any detail in this review, namely, peptic ulcer, bilateral sensorineural hearing loss and tinnitus, non-melanotic malignant neoplasm of the left ear and solar keratosis of the face and scalp. He also suffers from gout, myopia, dry eye syndrome, bilateral presbyopia and osteoarthrosis of the right shoulder which have been rejected by the respondent as being war-caused. The evidence during these proceedings revealed that the applicant has conditions affecting his back and hips and a recurring perianal abscess.
5. The applicant adopted a statement dated 30 September 2009 which was received into evidence as Exhibit A1. It records that he left school at the age of 16 at the equivalent of Year 11. He was initially employed delivering spare parts for a motor vehicle company and later obtained employment as a plant operator with a sand and gravel business. He enlisted with the Australian Army on 29 September 1965 and served in Vietnam between April 1966 and April 1967. He estimates that when he returned to Australia, he consumed at least 15, 10 ounce pots of beer per day.
6. After his service, he obtained employment with the State Rivers and Water Supply Commission in Victoria as a plant operator. He remained there until the mid‑1970s at which time he entered into partnership with another person as a plant operator, involved mainly in the construction of sewer and water mains. The partnership eventually dissolved and he ran the business alone. He took on partners on two other occasions and those relationships also ended after three or four years.
7. At the end of 2006 the applicant sold his business to his son, Anthony Hannebery, who also gave evidence in these proceedings. The applicant then ceased to work and has not worked since December 2006.
8. At or about the time the applicant ceased employment, he lost his articulated driver's licence having failed a medical examination because of his hypertension. He was consuming considerable quantities of alcohol and for reasons which will follow he had effectively lost interest in the business. He was not sourcing work, he lost clients and spent many hours each day consuming alcohol.
9. The applicant acknowledged that he has pain and stiffness associated with his back and hips. He said he is unable to climb onto machinery. He also agreed that he had a shoulder injury but it has been eased by injections.
10. It was apparent during the hearing that the applicant had little or no understanding of the corporate structure which was established and under which his earthmoving business was conducted. He also had little or no understanding of matters relating to the income, taxation, superannuation and profit distribution arrangements concerning the corporate structure.
11. Documents prepared by the applicant's accountants indicate that the applicant's business traded under the name Hannebery Earthmoving Pty Ltd (Hannebery Earthmoving). The applicant and his wife were the directors and shareholders of the company. It was the trustee of the B & H Hannebery Trust (the Trust) which was the owner of the earthmoving business. The beneficiaries of the Trust were the applicant, his wife, their daughter, Nicole and Richvalley Pty Ltd (Richvalley), an investment company of which the applicant and his wife were directors and shareholders. Richvalley was voluntarily deregistered as a corporation on 11 August 2010. Hannebery Earthmoving was sold to the applicant's son, Anthony and his partner Mark Prentice on 16 October 2007 (they had been operating the business, in anticipation of completing contracts of sale from December 2006). Anthony and his partner now operate the earthmoving business under the trading name of Force Earthworks. It is not known whether Hannebery Earthmoving has been deregistered.
HISTORY OF HANNEBERY EARTHMOVING
12. The applicant started the earthmoving business in the 1970s. In the early 1990s he said he employed his son, Anthony, and two other persons. The work mainly involved plumbing and sewerage type operations involving the digging of trenches, laying of concrete pipes, construction of culverts, fitting manholes and road works. A number of contracts were also held for maintenance type work, particularly contracts negotiated with the Department of Defence.
13. The applicant said that his management involved the completion of tenders for work which required completion of forms by ticking boxes and recording prices, quantities and hourly rates. The applicant said he was never required to provide any detailed description of the work or supply drawings. He said information of that type was supplied to him with the tender forms.
14. The applicant said he would visit work sites daily, set out jobs, supervise employees and operate earthmoving machinery. He said work was completed satisfactorily and he was well respected by his clients who included local shires, state government departments, private corporations and the Department of Defence. He said the business operated at a profit. However, he was unable to give any estimate of the gross income and he deferred to his tax returns and other financial statements prepared by his accountants.
15. As an example of some major contracts undertaken by the applicant's business, he referred to a sewerage and pipe laying contract at Jindera in southern New South Wales in about 1998. He said a number of persons were employed by him and the successful tender to the New South Wales State Government returned approximately $240,000.
16. In about 2005, the applicant successfully tendered as a sub-contractor to Strathair, an instant turf corporation to construct a football oval at the Latchford Barracks for the Department of Defence. The job involved major earth works and installation of drainage. He said the job lasted for approximately three months where all employees were engaged. The applicant estimated that the contract price exceeded $100,000 (he gave that estimate without any degree of confidence). Again he deferred to the records held by his accountant.
17. In the years 2005 and 2006 the applicant said his business was principally engaged in a number of smaller jobs. By 2006 he was attending the work site every second day and then only for two or three hours. He said that in the 1990s he would spend approximately three quarters of each day on site. On occasions, if an employee was absent from work, he would attempt to find a person to be engaged as a casual or he would undertake actual hands on work.
18. From the 1990s the applicant progressively reduced the amount of time that he spent on site which was in direct proportion to the amount of time that he was increasingly occupied consuming alcohol, either alone or in company with others at a hotel.
19. Anthony agreed that he commenced employment with his father in about 1990 when work was constant. He said Hannebery Earthmoving commenced to decline in about 2003 or 2004 as his father spent less time working and attending work sites. At or about that time his father was spending greater periods of time either at a hotel or drinking alcohol elsewhere. He said the work reduced in quantity to the extent that there were occasions when there was little or no work to be undertaken by him or other employees who eventually left. Anthony on occasions sought work elsewhere in order to earn income because there was insufficient work with his father.
20. In 2004 Anthony said his father would attend work sites at about 7.30 am and would leave by 9.30 am. It was at or about that time that a number of contracts were lost and only small maintenance type jobs were being offered by the Department of Defence.
21. In 2005 and 2006 Anthony said his father would rarely attend work sites or ring to see if there was any work to do. He said his father was not managing the business and there were many occasions where his father could not be located because he had turned off his telephone.
22. Anthony said that his father had lost a number of clients who were unhappy that he was not available to them and was not attending job sites for meetings. He said some major and regular clients, including the Wodonga Council, Rainworld, Semex and Holcim Quarries ceased to engage Hannebery Earthmoving.
23. Anthony said that towards the end of 2006, his father had lost interest in the business. His father was not spending time on work sites nor was he supervising employees or sourcing new work. He was failing financially and had run up an overdraft of $135,000. He could not afford to pay wages or make lease payments over machinery. He was not interested in book work. He was also drinking enormous quantities of alcohol on a regular basis.
24. Anthony said that his father was slow and had difficulty getting up and down from machinery because of stiffness in his hips, back and shoulder. He said his father was slowing down in 2006 but he was mobile. He also said that his father has a very poor memory which caused him to lose clients because he would forget about attending meetings that he had arranged with them.
ALCOHOL CONSUMPTION
25. The applicant said that from the 1990s, despite operating heavy earthmoving machinery and equipment, he was drinking alcohol at work during morning and afternoon smokos and at lunchtime. He resumed drinking after work had concluded.
26. By 2006 he was drinking from about 10.00 am until 6.00 pm over seven days per week. An ordinary day would involve the consumption of 10 or 12 stubbies and on occasions he has been known to drink a slab over a 12 hour period.
27. In about 2003 or 2004 the applicant and his wife moved into a residence annexed to the Blazing Stump Hotel in Wodonga. It was at or about that time he also increased his consumption of alcohol. He subsequently moved residence but the opening of the First Choice discount liquor stores in both Wodonga and Albury also contributed to his increased alcohol consumption because it permitted him to purchase greater quantities at discounted prices.
28. Anthony said that for as long as he could remember, his father had always consumed large quantities of alcohol.
29. In about 1990 Anthony recalled that his father would attend work sites until 2.00 or 3.00 pm each day but would then leave and commence drinking at a local hotel. He also recalled that his father drank alcohol on site during working hours. Progressively, as his father reduced his working hours, he increased the amount of time that he was occupied drinking alcohol.
30. He is aware that his father drinks alcohol to excess from about 10.00 am each day and drinks up to 12 stubbies per day. He said his father has a conviction for exceeding .05% of blood alcohol.
SALE OF BUSINESS
31. The applicant said he had intended to work beyond the age of 65 but towards the end of 2006, he realised that he could not manage it. He was unable to organise work sites or employees. He also realised that he was incapable of obtaining new contracts.
32. The applicant said the business was sold for $300,000 which comprised plant and equipment at $20,000 and goodwill of $280,000. He said the plant and equipment sold was a backhoe, a loader and a truck. The contract of sale records a purchase price of $300,000 which comprised of $50,000 for plant and equipment and $250,000 for goodwill. Schedule B of the contract lists 31 items of plant and equipment included in the sale. The applicant said that Anthony and his partner, who eventually purchased the business, did not give the purchase monies directly to him.
33. The applicant said that his son Anthony took over the earthmoving business in 2006 and it was formally sold by an exchange of contracts in October 2007.
34. Anthony said that the business was sold to him and his partner in 2006 but they did not know at that stage whether they could obtain finance to meet the purchase price. He said that he and his partner did not conduct any valuation or audit over the business and they had no idea of the trading figures which were held by the accountant. He said the intention of purchasing the business was to make funds available to meet his father's debts and to ensure that his father did not lose everything. He said between $80,000 and $90,000 was paid to the Australian Taxation Office (ATO) to meet outstanding income tax debts and the remaining monies were given to his father's accountants to have them pay all other debts. Anthony said that he and the accountants assumed responsibility for using the purchase price to satisfy the applicant’s debts. He said that he would not trust his father with monies of that type. He feared that if his father had access to the purchase monies it would largely be spent on alcohol. Anthony and his partner also assumed responsibility for discharging the bank overdraft of $135,000.
35. Anthony said that he had been an employee of his father's business until he took it over in 2006. He said that his father did not discuss contracts of the business with him and he had no idea of its profitability or its income. He said he was surprised to learn that Hannebery Earthmoving earned $636,600 in gross receipts in 2005 and said that the earnings of $553,774 in 2006 seemed high.
36. Anthony rejected a suggestion put to him that there was a shortage of work in 2005 and 2006 which was the reason he left Hannebery Earthmoving. He said he obtained employment with Rainworld which conducted a similar business and was successfully obtaining a number of contracts by tender.
37. Anthony said that he and his partner had secured work from clients who had deserted his father. Force Earthworks was diligently managed. He and his partner gave attention to detail and accuracy of tenders, and unlike Hannebery Earthmoving, Force Earthworks was promoted and advertised. It had gross receipts in the last financial year of $2.5M with only two employees which was the same number of employees previously engaged by his father. He acknowledged that some work had been obtained by recent Federal Government initiatives involving construction of school infrastructure but said only 10 or 15 per cent of his income had come from work of that type. He said he and his partner were only working 50 hours per week and had also obtained work interstate in South Australia and Tasmania.
INCOME
38. The applicant said that he had received some income from the Trust and presently he only receives service pension from the Department of Veterans' Affairs. He said he also receives money from a superannuation fund but had no idea of the amount invested. He said that he thought he had between $12,000 and $15,000 available to him in superannuation but said that his wife runs everything and gives him some money. In cross-examination, Mr Purcell referred the applicant to superannuation Member statements which recorded a balance of $417,131.19 for the applicant in the income year ending 2008 (Exhibit R3) and a balance of $152,254.56 for his wife in the same year (Exhibit R4). The applicant said that he was not aware of those monies and said why would I be here… if I had that money. He said he could not explain the source of those funds or where they are held and suggested that enquiries should be made of his accountants.
39. When the hearing resumed on 31 January 2011, the applicant was asked whether he had made any enquiries of his accountants about his superannuation account after the hearing in Wodonga. . He said he had not. He again said he knew nothing about it and said If you find it [the money] I’ll go half with you. He said that his wife organises all finances since [he] ceased work. He also said that he has never used an automatic teller machine because he does not know how.
40. Anthony said that he believed his father is not receiving any income. He also said that he did not know anything about his father's income whilst he was operating the business.
PRESENTLY
41. The applicant said that at the present time he spends his time either at home or at a small farm that he owns which is a short distance from Wodonga. At both locations the applicant drinks heavily.
42. The applicant described his farm as being 100 acres of which 25 has been sold. When he attends the farm he mows grass which he estimated to be about the size of the courtroom during which the hearing was conducted in Wodonga. He said that he also sprays some weeds but does not perform any farming or maintenance over the property. He has six cows and calves and most of his time at the farm is spent either inside a hut where he drinks alcohol or fishing which also involves drinking alcohol. He said he attends the farm because it is peaceful and it does not have a television, radio or telephone. He said it is somewhere to drink without getting annoyed. The applicant has arranged to sell the remaining 75 acres later this year.
MEDICAL EVIDENCE
Dr Nigel Strauss
43. Dr Nigel Strauss is a consultant psychiatrist who provided reports at the request of the respondent on 13 February 2008 (Exhibit R6) and 9 March 2010 (Exhibit R7).
44. In his first report, Dr Strauss concluded that the applicant's employability has not been significantly affected by his psychiatric problems . . . In his second report he concluded the applicant:
… was not suffering from a significant incapacity from a psychiatric perspective. He has now not worked for several years and his son has taken over the business and he has no motivation to work. He will never work again.
45. Mr Purcell called Dr Strauss to give evidence on behalf of the respondent but did not ask him any questions. He was content for his reports to be received into evidence.
46. In cross examination Dr Strauss said he was aware that the applicant had been drinking heavily but he was not aware of evidence that the applicant increased his consumption of alcohol in recent years. Dr Strauss was referred to the transcript of the first day of hearing where Anthony gave evidence that in 2005 and 2006, the applicant rarely attended work and did not answer his telephone during the day. This was compared to evidence that the applicant attended workplaces for three quarters of each day in the 1990s. Dr Strauss was also referred to the applicant’s evidence that his alcohol consumption had increased in 2006. Dr Strauss was not aware of a change in the applicant's alcohol consumption or that his business was losing contracts because of the alcohol consumption.
47. Dr Strauss was advised of Anthony’s evidence that some of the monies raised to purchase his father's business were paid to the ATO to meet outstanding tax debts. He agreed that an indicator of a person having an addiction is their inability to control their finances. Additionally, he said a lack of motivation, poor memory and poor concentration could be a symptom of alcoholism. However, in his clinical assessment, he thought the applicant had reasonable memory and concentration.
48. Dr Strauss said that the applicant decided to cease work because of the combined effect of his age, his deteriorating physical health, the loss of his heavy vehicle licence and his alcohol consumption. Dr Strauss was also of the opinion that the applicant has had enough.
49. When Dr Strauss was asked to assume that the applicant had increased his consumption of alcohol in recent years and had started to drink alcohol earlier each day, he said there was a possible increase in his inability to work. He also added that the presence of physical restrictions also contributed to incapacity.
Dr Robyn Horsley
50. Dr Horsley is an occupational physician who provided a report at the request of the respondent on 17 March 2010 (Exhibit R8). Ms Ryan indicated that Dr Horsley was not required for cross examination and Mr Purcell was content to rely on her report.
51. Dr Horsley concluded that the applicant had clinical evidence of lumbar spondylosis and bilateral hip degeneration which she thought would be aggravated by exposure to the vibration of heavy plant and equipment. She thought he did not have the physical capacity to work on plant and equipment for more than eight hours or more than 20 hours per week.
52. Having been provided with a copy of Anthony’s statement, Dr Horsley was also of the opinion that the applicant’s alcohol abuse was probably the main reason for ceasing work which probably also coincided with the loss of business and his articulated driver’s licence. She said that his alcohol abuse would also impact upon his capacity for work. She reported that she would rely upon [her] psychiatrist colleagues for an opinion in this area.
53. In conclusion, she recorded:
On history, it appears that his business declined secondary to his alcohol abuse. Over the last couple of years, he has been experiencing increasing symptoms secondary to lumbar spondylosis and bilateral hip degeneration. However, it has not been at a level where he has sought assistance from his local doctor. He has had no investigations.
Dr John Moran
54. Dr Moran is a general practitioner in Wodonga who has the additional qualifications of a Graduate Diploma in Hospital Management and a Graduate Diploma of Forensic Medicine. He is a Certified Sports Medicine Practitioner, a fellow of the Australian Council of Rural Medicine, and a Member of the Australian College of Legal Medicine.
55. In evidence Dr Moran said he had been treating the applicant for between 10 and 15 years. He provided a report dated 24 May 2010 (Exhibit A8) in response to a letter from the applicant's solicitors. In his report he expressed the opinion that the applicant is not capable of remunerative work for more than eight hours. In fact I would think not capable of remunerative work at all.
56. In evidence Dr Moran was taken to a medical impairment assessment he completed on 9 July 2008 (T9). He described the subjective distress [of the applicant] as anxiety – most of time (caused him to give job away) (T9, p 41). He recorded that the subjective distress affects the applicant on a recurring basis causing mild distress. He also recorded that the applicant admitted to him that he suffers anxiety most of time. Dr Moran recorded he observed the applicant to have mild anxiety at time of presentation (T9, p 42). He recorded that he perceived the distress of the applicant as sometimes apparent and noted that the applicant is not a person who goes (sic) or attends doctors.
57. Dr Moran recorded that the emotional and behavioural condition suffered by the applicant caused moderate interference with function in many every day situations (T9, p 43). He based that opinion on the history given to him by the applicant. He also recorded that the condition affected the applicant's capacity to work to the extent that the veteran cannot work as a result of his psychiatric disability. In evidence he added that alcohol abuse also contributed to incapacity (transcript of 16 September 2010, p 13).
58. In cross examination Dr Moran agreed that the opinions he expressed in the medical impairment assessment concerning subjective distress and his opinion that the applicant suffers mild anxiety were based on his observations of the applicant. He said the applicant is a person who does not tell me much.
59. Dr Moran was also asked to comment on the lifestyle questionnaire completed by the applicant (T7). The applicant recorded that he has problems when walking because of his hips some of the time. He gave a similar response concerning the condition of gout (T7, p 32).
60. Dr Moran said that the applicant suffers generalised muscle aches and pains and has had great trouble moving around in last year or two. He was also aware that the applicant had suffered from an anal fistula and a rectal abscess which caused him great difficulty when walking because of pain. It was his recollection that those conditions had started two or three years earlier and within that time the applicant had three or four operations at the Wodonga Hospital. Dr Moran said he did not have notes of all of the applicant’s attendances at the hospital. He added that the rectal abscess has also restricted the applicant’s mobility because from time to time he has had a drainage tube applied to the abscess.
61. Dr Moran said that X-rays taken of the applicant's hips did not show osteoarthrosis. He assumed that the poor mobility of the applicant was musculoskeletal in nature and arose also out of lack of exercise.
62. Dr Moran said the applicant suffers gout which periodically breaks out. He said he treats the symptoms when the applicant presents to him. He said the symptoms affect the applicant's legs and feet, and were exacerbated by consumption of alcohol. He was aware that the applicant also purchased over the counter painkilling medication from chemists. His notes recorded that he attends the applicant for treatment of his gout on approximately one occasion per year. He regarded the applicant as being stoic.
63. Dr Moran said that it would not be unreasonable, having regard to the applicant's age, that he would suffer some restrictions. He also noted the applicant suffered pain in his arms and shoulders. His clinical notes indicate that in April 2007 he prescribed Prexige to treat the applicant's right shoulder and in November 2007 he administered cortisone with a local anaesthetic into his left shoulder.
64. Dr Moran was taken to the applicant's lifestyle questionnaire (p 33) and he agreed that the applicant could not perform full time work involving climbing up and down machinery and earthmoving equipment. He was not aware that the applicant had given up attending football games and races but said that if it was the applicant's case that he did not participate in those hobbies because of physical restrictions, he would accept that explanation.
65. Dr Moran was referred to a report of Dr Epstein (T14, p 73) who recorded that the applicant was taking four or five Neurofen Plus tablets daily because of pain and discomfort in his hips and shoulders. Dr Moran said taking those tablets in that quantity would not be good for his health.
66. Dr Moran agreed that his clinical notes did not include any reference to the applicant consuming alcohol or the quantity of it. He said he was aware the applicant did consume large quantities of alcohol and it had been the subject of discussions between them. He said he was aware that the applicant consumes between half to one slab of beer at his farm and was also aware that he drank alcohol at a local hotel.
67. Dr Moran had assumed that the applicant was drinking one slab of beer over a couple of days and on the basis that half a slab is the equivalent of 12 stubbies, he agreed that alcohol in that quantity, daily, would be ten times the recommended level. He said he had expressed his concern to the applicant on a number of occasions about his alcohol consumption. He located pathology results recording the GGT levels (recording liver function by affect of alcohol) at 180 and 151 in 2000 and 2001, respectively. Dr Moran said that a GGT level of 50 or below was within normal limits. He said that there may be other blood tests held at the Wodonga Hospital which would record GGT readings. He was not alarmed at a GGT level of 180 in 2000 because he occasionally sees patients with similar GGT. He attempts to encourage persons to reduce their alcohol consumption but he didn't think Bernie would change. He agreed that an increase in the level of alcohol consumed would cause a rise in the GGT levels and a reduction in alcohol consumed would cause a reduction in the GGT levels.
68. Dr Moran said on the occasions that the applicant attended his rooms he had been sober. He did not smell alcohol on the applicant on those occasions. He did not know whether the applicant had driven his motor car to those appointments.
Dr Michael Epstein
69. Dr Epstein is a consultant psychiatrist who provided reports dated 3 December 2007 (T14, p 68) and 9 April 2010 (Exhibit A10). He assessed the applicant on two occasions at the request of the applicant's solicitors.
70. In his second report he expressed the opinion that the applicant suffered war-caused injuries which were, of themselves, alone, preventing him from undertaking remunerative work for periods aggregating more than eight hours per week.
71. In evidence he expanded that opinion and said that the applicant spends most of his day drinking alcohol, he is isolated, agitated, irritable and unmotivated. Dr Epstein said that the applicant feels useless and was virtually drinking himself to death. He could not see the applicant working in any capacity.
72. Dr Epstein said the applicant suffered a poor memory which is consistent with brain damage by alcohol abuse and his anxiety. He agreed with an opinion expressed by Dr Strauss that the applicant had ceased work because of a lack of motivation which he attributed to his psychiatric condition (his alcohol abuse, his generalised anxiety disorder and depression).
73. In cross examination Dr Epstein said the applicant had been a heavy drinker of alcohol since Vietnam. When he first saw him in 2007, he obtained a history of consuming 12 stubbies per day and occasionally up to 20 per day (T14, p 73).
74. Dr Epstein said that the applicant had lost interest in his business and sold it to his son in 2006. He said the applicant also suffered from hypertension, peptic ulcer, gout, pain in his knees and shoulders (for which he was taking between four and five Neurofen Plus tablets per day) and from a rectal abscess. He did not know the applicant had been admitted to Wodonga Hospital on three or four occasions for surgery concerning that condition. He had not had conversations with the applicant's general practitioner nor had he seen the practitioner's notes. He said the applicant did not tell him that that condition caused him pain. He agreed that he would defer to the opinions of the general practitioner with respect to the applicant's physical disabilities.
75. Dr Epstein agreed with an opinion expressed by Dr Strauss that the applicant had always been a heavy drinker of alcohol throughout his working life. He said the applicant's age (64), his lack of interest and the ability to sell the business to his son could be part of the reason the applicant ceased employment.
76. In re-examination Dr Epstein remained of the opinion that the war‑caused injuries alone were responsible for his incapacity. He was particularly firm in his opinion, especially when he was referred to the evidence that the applicant’s alcohol consumption increased in recent years and that he started to drink earlier each day.
REASONS FOR DECISION
77. Section 24(1) of the Act sets out the requirements for entitlement to the special rate of pension. The applicant was under the age of 65 at the date he made his claim for an increase in pension and he is receiving pension at 90 per cent of the general rate. Section 25 of the Act does not apply to the applicant. Therefore, ss 24(1)(aa), (aab), (a) and (d) of the Act are satisfied. The applicant must also satisfy ss 24(1)(b) and (c) which are reproduced as follows:
…
(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 …
78. As may be seen from the above, I must determine whether:
Øthe applicant is prevented from working for more than 8 hours per week because of his war-caused injury or disease alone; and
Øthe incapacity from the war-caused injury or disease, alone, prevented him from continuing to undertake the remunerative work that he was undertaking; and
Øhe is consequently suffering a loss of salary or wages that he would not be suffering if he were free of that incapacity.
79. In Flentjar v Repatriation Commission (1997) 48 ALD 1, Branson J delivered the judgement of the Full Court of the Federal Court. Her Honour summarised the issues that were before the Tribunal by asking four questions, three of which needed to be answered positively in order for a veteran to qualify for special rate pension. Those four questions are as follows:
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?
80. In Repatriation Commission v Hendy (2002) 76 ALD 47 the Full Federal Court considered Flentjar and also considered whether the war-caused injury or disease alone, rendered the veteran incapable of undertaking remunerative work. The Court said:
[36] The tribunal's task was to assess what the veteran probably would have done, if he had none of his service disabilities during the assessment period. The requirement to consider "remunerative work that the veteran was undertaking" does not mean a particular job with a particular employer but the substantive remunerative work that the veteran had undertaken in the past. … The tribunal was not bound to limit its consideration to the last employment that the veteran actually undertook.
[37] The consideration of what a veteran would probably have done, absent the service disabilities, is a hypothetical exercise. The language of s24(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…
81. Any assessment of what a veteran would have done but for service disabilities is described by the Court in Hendy as a hypothetical exercise [at 37]. In Repatriation Commission v Smith (1987) 15 FCR 327 the Full Court reached a similar conclusion when s 24(1)(c) was considered (at 337).
82. There is no doubt in my view that the accepted disabilities of alcohol abuse and general anxiety disorder, and to a lesser extent, hypertension contributes substantially to the incapacity of the applicant. Indeed, I am satisfied that he is totally and permanently incapacitated. However, I am not satisfied that his incapacity by those accepted conditions, alone, prevent him from continuing to undertake remunerative work.
83. In his lifestyle questionnaire completed on 4 July 2008, the applicant recorded that his mobility is affected by the problems associated with his shoulder and arms most of the time (T7, p 32). He also recorded that his mobility is affected some of the time by problems associated with his hips. Those problems are more comprehensively described by him at page 33 where he recorded cannot perform full time tasking, climbing up and down machinery (etc) eg earthmoving equip[ment].
84. In evidence on the first day of hearing (transcript, p 13) the applicant said that he can’t get up and down too well from a grader because my hips are stuffed. He agreed that he had been told that he suffers a degenerative condition in his hips. The applicant had problems with his lower back and treatment for a recurring perianal abscess. On balance, he agreed that his hips and back affected his ability to get up and down from heavy equipment. Dr Horsley was of the opinion that the applicant had clinical evidence of lumbar spondylosis and bilateral hip degeneration (Exhibit R8).
85. Dr Moran was aware that the applicant had hip pain which he associated with impairment of musculoskeletal function within his hips because x‑rays did not indicate evidence of arthritic changes. The musculoskeletal impairment described by Dr Moran was thought by him to have its origin in ligaments, soft tissues and muscles in or around the hips, probably associated with lack of exercise (transcript of 16 September 2010, p 15).
86. In his evidence in Melbourne on 31 January 2011, the applicant again agreed that his hips and back were not real good and affected his ability to climb on and off heavy machinery.
87. The main reason the hearing resumed in Melbourne on 31 January 2011 was to examine records that were received from the Wodonga Regional Health Service which contained many references to the treatment that the applicant had in 2001, 2007 and 2010 for a recurring perianal abscess. The applicant said the abscess caused him great pain which affected his ability to walk. On each occasion he was admitted for two or three days for treatment and drainage. When he was discharged, he had nurses visit him daily to apply dressings to the wound.
88. Dr Moran had never treated the applicant for the perianal abscess but was aware that it would cause restriction to his mobility (transcript of 16 September 2010, p 14-15). His description of the condition (as recorded in the transcript) need not be recorded here, except to say that the treatment, the drainage and the dressings would impair the applicant’s mobility.
89. The applicant also suffers from gout which is treated by Dr Moran and medication is prescribed for it. He said from his records he would attend the applicant about once a year for treatment of gout. When the hearing resumed in Melbourne, the applicant said that the condition is very painful and he suffers from it every three or four months. He said it affects his knees and immobilises him for a week or longer on each occasion.
90. Dr Moran has also treated the applicant’s left shoulder with a cortisone injection and his right shoulder with a non-steroidal drug, Prexige. He is aware that the applicant suffers ongoing pain and is also aware that the applicant purchases Nurofen medication to relieve the pain in his shoulders and knees (transcript of 16 September 2010, p 17).
91. The applicant’s alcohol consumption and anxiety and no less his hypertension (which resulted in the applicant losing his articulated driver’s license) have contributed to his incapacity. However, on balance, I cannot find as a fact that those conditions alone prevent him from continuing to engage in remunerative work.
92. I am satisfied on the evidence of the applicant and on the medical evidence that the applicant’s incapacity is due to the combined effects of the pain and discomfort associated with injuries or disease to his hips, shoulders and back, the gout which predominately affects his knees and the recurring perianal abscess which causes pain, discomfort and impaired mobility.
93. It would appear also from the medical evidence that the applicant had suffered a progressive lack of motivation and eventually sold the business to his son. Those factors, together with his age of 61 years, in 2006, also contributed to him ceasing work.
94. Whilst, alone does not mean sole, unique and absolute cause (Cavell v Repatriation Commission (1989) 9 AAR 534, consideration of the causes of incapacity requires the making of a:
…practical decision whether the veteran’s loss of remunerative work is attributable to his service‑related incapacities and not to something else as well. It is a decision that should not be made upon nice, philosophical distinctions but with an eye to reality and as a matter in respect of which commonsense is the proper guide. (at 539).
95. Whether an examination of what the applicant would have done absent his service disabilities be considered as a hypothetical exercise (Hendy) or as a practical decision … with an eye to reality (Cavell), the many illnesses and injuries suffered by the applicant, other than his war-caused disabilities, together with his circumstances as expressed in paragraph 93, satisfies me that he has not been prevented from continuing to undertake remunerative work by his war-caused injuries or diseases, alone. That finding has been made with an eye to (the) reality of the applicant’s circumstances.
96. The applicant worked until the end of 2006 when his son assumed control of the business and later acquired it by purchase in 2007. The applicant has been totally incapacitated since 2006 but not by war-caused injuries alone.
97. In answer to the questions asked in Flentjar I would, for the above reasons, give the following answers:
(i) earth moving contractor
(ii) yes
(iii) no
(iv) not applicable
98. Although the issue of remunerative loss for the purpose of the fourth question posed in Hendy is not applicable, I note that the evidence by and on behalf of the applicant concerning remunerative loss was unsatisfactory. The applicant had no idea of his financial status, especially the existence of a superannuation balance of $417,131 at 30 June 2008 and whether it generated income. Taxation returns completed by his accountant before the 2006 income year were not tendered as evidence in this review. The accountants were not called to explain, interpret, assist or give evidence of the income of previous years.
99. Even if I was satisfied that the applicant was prevented from undertaking remunerative work for more than 8 hours per week because of his war-caused incapacity alone, I cannot be satisfied that he has suffered a loss of salary, wages or earnings.
DECISION
100. The applicant presently receives pension at 90 per cent of the general rate. There was no application, in the absence of a finding of special rate qualification, that general rate pension be reassessed, nor were any assessments presented in evidence.
101. For all of the above reasons, I am satisfied that the decision under review should be affirmed.
I certify that the one hundred and one [101] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr John Handley, Senior Member
Signed: Olympia Sarrinikolaou
Legal Assistant
Date/s of Hearing 23 August and 3 September 2010; 31 January 2011
Date of Decision 23 February 2011
Counsel for the Applicant Mr G. Purcell
Solicitor for the Applicant Department of Veterans’ Affairs
Counsel for the Respondent Ms F. Ryan
Solicitor for the Respondent Williams Winter Solicitors
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