Hatherall and Defence Force Retirement and Death Benefits Authority
[2004] AATA 854
•17 August 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 854
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2003/400 & 1910
VETERANS’ APPEALS DIVISION )
Re KATHLEEN JEAN HATHERALL Applicant
And DEFENCE FORCE RETIREMENT AND DEATH BENEFITS AUTHORITY Respondent
DECISION
Tribunal Ms N Isenberg, Member Date17 August 2004
PlaceSydney
Decision The Tribunal sets aside the decisions under review and in substitution therefor, the Tribunal decides that Ms Hatherall’s invalidity classification is 30% or more but less than 60%, Class B as at 26 July 2002 and 18 December 2002.
[SGD] Ms N. Isenberg
Member
CATCHWORDS
Defence Force Retirement and Death Benefits – member is retired on the ground of invalidity for physical incapacity – invalidity benefit – Incapacity in relation to civil employment – the percentage of incapacity – ‘causal connection’ – decisions set aside.
LEGISLATION
Defence Force Retirement and Death Benefits Act 1973. s 26, s 30(1) ,s 34(1), s 34(1A) and s 34(1B).
CASE LAW
Re Thomson and Defence Forces Retirement and Death Benefits Authority (1987) 6 AAR 424
Cocks v. Commissioner for Superannuation (1990) 21 ALD 297
Re Greer v. Defence Forces Retirement and Death Benefits Authority (2001) 63 ALD 282
Freeman v Defence Forces Retirement and Death Benefits Authority (1985) 5 AAR 156
Defence Force Retirement and Death Benefits Authority v. House (1989) 22 FCR 138
Re McGovern and Defence Forces Retirement and Death Benefits Authority (1988) 16 ALD
791.
Perrett v Commissioner for Superannuation (1991) 29 FCR 581
Re Levin and Defence Force Retirement and Death Benefits Authority (1997) 48 ALD 664
Re Bos and Defence Forces Retirement and Death Benefits Authority (1977) 1 ALD 31
Re Burr and Commissioner for Superannuation (AAT 411, 30 September 1980)REASONS FOR DECISION
17 August 2004 Ms N Isenberg, Member BACKGROUND
1. The Applicant, Kathleen Jean Hatherall (“Ms Hatherall”) was born on 16 March 1962 and entered the Royal Australian Air Force (‘RAAF’) on 6 July 1982. On 14 November 1982, in the course of her employment, she slipped and fell on wet concrete, (T21, p.52). On the basis of an impairment described as ‘Left Patello Femoral Arthritis’ she was discharged from the RAAF on 23 August 1988, (T24, p.58).
2. From 17 August 1988, Ms Hatherall was classified under section 30 of the Defence Force Retirement and Death Benefits Act 1973 (“the Act”) as 40% ‘Class B’ in respect of incapacity arising from her Left Patello-Femoral Arthritis. (T29, P. 71) She was reviewed periodically over the years and remained classified 40% Class B.
3. However, on 18 June 2002, Ms Hatherall was reclassified ‘20% Class C’ with effect from 26 July 2002. Relevant civil employment was determined as storeperson, clerk and shop assistant, (T70, p. 253-257).
DECISION UNDER REVIEW
4. The decisions under review before the Administrative Appeals Tribunal, (“the Tribunal”) were the following decisions of the Respondent, Defence Force Retirement and Death Benefits Authority (“the Authority”) dated 16 July 2002 and 11 June 2003 respectively:
a) Ms Hatherall’s percentage of incapacity in relation to civil employment was 20% and accordingly the Applicant be classified Class C on and from 26 July 2002. On 14 February 2003, that decision was affirmed upon reconsideration; and
b) Ms Hatherall’s percentage of incapacity in relation to civil employment was 30% and accordingly she be classified Class B on and from 18 December 2002. On 21 November 2003 that decision was affirmed upon reconsideration.
ISSUES
5. There was no dispute between the parties that Ms Hatherall is entitled to a benefit under the provisions of the Act. The only issue is that of her classification during the periods under review.
6. The issue to be determined is whether, based on the evidence before the Authority and therefore the Tribunal, Ms Hatherall’s invalidity classification was 20% Class C as at 26 July 2002 and at 18 December 2002, or some other classification.
LEGISLATION
7. Section 26 of the Act states as follows:
“26. Subject to sections 27, 28 and 29, where a contributing member is retired on the ground of invalidity or of physical or mental incapacity to perform his duties, he is entitled, on his retirement, to invalidity benefit in accordance with this Part.”
8. Subsection 30(1) of the Act provides:
“30. (1) Where a member of the scheme, not being a member of the scheme to whom section 36 applies, is, or is about to become, entitled to invalidity benefit, the Authority shall determine his percentage of incapacity in relation to civil employment and shall classify him according to the percentage of incapacity as follows:
Percentage of Incapacity Class
60% or more ………………………………………………………....A
30% or more but less than 60% .................................................B
Less than 30% ……………………………………………………...C
9. The Authority may reclassify an invalidity recipient if it is satisfied that the percentage of incapacity in relation to civil employment should be altered. Subsection 34(1) of the Act provides:
“34. (1) The Authority may, from time to time, if it is satisfied that the percentage of incapacity in relation to civil employment of a recipient member in receipt of invalidity pay is such that the classification of the member should be altered, reclassify him in the appropriate classification set out in section 30 according to the percentage of his incapacity in relation to civil employment.”
10. Section 34(1A) of the Act states that in determining the percentage incapacity in relation to civil employment the Authority shall have regard to the following factors only:
(a)the vocational, trade and professional skills, qualifications and experience of the recipient member;
(b)the kinds of civil employment which a person with skills, qualifications and experience referred to in paragraph (a) might reasonably undertake;
(c)the degree to which any physical or mental impairment of the recipient member, being a prescribed physical or mental impairment, has or had diminished the capacity of the recipient member to undertake the kinds of civil employment referred to in paragraph (b);
(d)such other matters (if any) as are prescribed for the purposes of this subsection.
11. Section 34(1B) of the Act defines “prescribed physical or mental impairment” as a physical or mental impairment of the member that was the cause, or one of the causes, of the invalidity or physical or mental incapacity resulting in the member’s retirement or any other physical or mental impairment causally connected with a physical or mental impairment of the member that resulted in retirement.
THE HEARING
12. A hearing was held before the Tribunal on 3 June 2004 at Newcastle. The matter resumed and concluded on 7 June 2004 in Sydney. Ms Hatherall was represented by Mr P Jones, solicitor, of Legal Aid N.S.W. and the Authority was represented by Mr A Dillon, solicitor, of the Australian Government Solicitor. Ms Hatherall gave sworn evidence and was cross-examined on behalf of the Authority. I also asked her questions.
13. I had before me documents lodged pursuant to section 37 of the Administrative Appeals Tribunals Act 1975 ("the T-documents"), which I took into evidence. Other documents were tendered and these have been attached to the Tribunal’s file.
DISCUSSION OF EVIDENCE and FINDINGS
14. In coming to the correct and preferable decision, I took into account all the evidence, submissions, case law and relevant legislation.
15. In the Full Federal Court cases of Defence Force Retirement & Death Benefits Authority v House (1989) 22 FCR 138 and Re Freeman v Defence Force Retirement & Death Benefits Authority (1985) 5 AAR 156, the Court in each case said that only the considerations expressed in the subsection may be taken into account. The Tribunal in Re McGovern and Defence Forces Retirement and Death Benefits Authority (1988) 16 ALD 791 at 792 summarised the matters which cannot be taken into account:
“The only matters which it may take into account in determining the percentage of incapacity are those referred to in the provisions. Accordingly, the Tribunal cannot take into account, the ageing process, a depressed labour market, a state of unemployment, the shortage of employment for those who might engage in a particular occupation, circumstances foreseeable only in the long term unless made appropriate and prevention of continuance in non-civil employment.”
16. In accordance with section 34(1A) of the Act, the matters that I must consider in determining the level of a member’s incapacity may be reduced to questions as follows:
1.What are Ms Hatherall’s vocational, trade and professional skills, qualifications and experience?
17. On 2 August 1988, Ms Hatherall completed an Information Statement Relating to Education, Training Pre-Service and In-Service Employment Experience, (T27, pp.67-68) It recorded her pre-service education and training as completing the School Certificate in 1977 and the Higher School Certificate in 1979 at Raymond Terrace High. Ms Hatherall told me that her HSC result was poor.
18. While at school, Ms Hatherall said she worked 8 hours per week in a supermarket. After school finished, she worked there full time, from December 1979 to June 1982, when she applied to join the RAAF.
19. After her initial RAAF training she undertook the 174 supplier course in 1982. She was posted to Wagga as a storeman and packer. This entailed the selection and delivery of goods around the base. The work was very physical, as it involved loading and unloading trucks, unpacking the stores, and checking items against the inventory and ‘signing off’ for them.
20. In 1984 she undertook a forklift course, and forklift driving then became part of her duties as well.
21. After leaving the RAAF, from August to December 1988, (T75, p.271) she worked as a casual employee in the showroom of Ideal Shower Screens. She would answer the phone and make appointments for sales representatives. She would show customers the products in the showroom. She would clean the items on display and vacuum the showroom. These cleaning tasks accounted for about 30% of her time, as she frequently had to clean the glass shower screens of the showroom because the nearby steelworks left fine soot on them.
22. Although she liked the work, she found it difficult having to squat to clean the bath and in bending generally, especially when vacuuming. By the end of the day she ‘could hardly walk’.
23. She then thought that working in a library might be a good career choice, and so did a library technician’s course at TAFE. As part of that course she obtained a work placement, and it was then she discovered that the work entailed a lot of pushing trolleys and bending to put books away and stepping up on ladders to reach high shelves. In all, she found it much more physical than she had expected. She found she was unable to cope with 5 hours a day during the one week placement. She was unsure if in fact she lasted the whole week.
24. In 1989, she did a nail technician’s course. While she understood it to entail a lot of sitting, she found she had to lean forward continually and was unable to curl her legs under her in a position that was comfortable.
25. She became involved in a cosmetics party plan – selling cosmetics in private homes. She said she did not foresee that it would entail a lot of driving and that she would often arrive at the homes to discover there was a steep driveway or a lot of stairs. She also had difficulty standing for long periods to demonstrate the products.
26. She said she went to the Commonwealth Rehabilitation Service (“CRS Australia”). She was advised that she might be suited to welfare work. In 1993 she commenced a diploma in welfare work at TAFE which was 2 years fulltime. However she had difficulty with the stairs on campus and so extended the course to part time, over 3 years. The course included a camp for disabled children but it required her to stand for too long and, she said, she ended up in hospital and then on crutches and that she required physiotherapy. Another placement involved driving between schools for counselling. She found the schools’ stairs to be difficult as well as long periods of driving.
27. In 1996, she did a 6 month course in computers, but does not consider herself to be proficient. During the same year, she undertook a preliminary mediators’ course through the Community Justice Centre. She said she was ‘not chosen to be one’.
28. She said that in 2002, she was assessed by CRS Australia at the request of Department of Veterans’ Affairs. The assessor, she said, was optimistic that work could be found, but that has not been the case.
29. I find that in view of Ms Hatherall’s evidence, her vocational, trade and professional skills, qualifications and experience may be summarised as follows:
·Education to Year 12; albeit with mediocre academic results.
·Pre service experience as a shop assistant.
·In service experience as a supplier / storeman / clerk.
·Post service training in welfare work, computing skills for the office, manicuring, and elementary mediation.
2. What are the kinds of civil employment which a person with Ms Hatherall’s skills, qualifications and experience might reasonably undertake?
30. In considering, the kinds of civil employment which a person with Ms Hatherall’s skills might reasonably undertake, the Full Federal Court in the matter of Defence Force Retirement & Death Benefits Authority v House (supra) at 141-142, stated that it is not appropriate to:
"... restrict a member to the employments in which he is now engaged in his impaired state. That would be to mock the statutory purpose, which is to find an objective criterion for the assessment of the extent of the impairment. The criterion is a broad one which relates to categories of employment and not to particular occupations. It is concerned with the range of occupations open to the person described, so that the effect of the disability may be measured against the opportunities that might have been open."
31. It was contended on Ms Hatherall’s behalf and I accept, that the kinds of civil employment that a person with her skills, qualifications and experience might reasonable undertake are:
·store person
·sales assistant
32. I do not consider her brief library work, manicuring or cosmetics sales to be anything more than vocational experiments.
33. The solicitor for the Authority contended that in addition, the kinds of civil employment that a person with Ms Hatherall’s skills, qualifications and experience might reasonably undertake also included:
·general clerk
·welfare worker
34. I accept that, in addition to the roles of storeperson and sales assistant, the combination of her experiences provide her skills, qualifications and experience for general clerical work and some form of welfare work.
3. What was the physical or mental incapacity by reason of which Ms Hatherall was retired?
35. Ms Hatherall told me how she had been ‘fine’ at the time of her entry medical and had no trouble undertaking the 5 weeks basic training at Edinburgh which included a lot of running (2.4 kms in 19 minutes), drill, marching and weapons work.
36. Following the accident she had difficulty performing her duties.
37. On 11 December 1987, in a Department of Defence Employment Standard Review form, Flight Lieutenant Searl A/SMO, identified Ms Hatherall’s principal condition as ‘Left Patello Femoral Arthritis’ and stated that ‘her condition is likely to persist in the future, possibly worsening if continued to be aggravated’. Flight Lieutenant Searl reported that, from a work perspective, Ms Hatherall was ‘unfit for parades’, ‘prolonged squatting’ and was ‘unfit to run’, (T16, pp.35 -36).
38. A report dated ‘December 1987’, recorded the effect which her injury had on her work performance, (T16, p.37). The report stated that she was able to perform the majority of her duties adequately ‘albeit rather more slowly than her work group, particularly when bending, squatting or lifting in physically restricting areas’. It was further recorded that she appeared:
“… to minimize the seriousness of her ailment to some degree although admits should she be job rotated to other tasks, she would have difficulty in performing to a satisfactory standard.”
39. In a statement attached to that report, (T17, p.38), Ms Hatherall noted her limitations in performing aspects of her role. She wrote of having had difficulty pushing a trolley, such that she required medical attention and rest. Her position at the time of the report allowed for sitting doing paperwork and walking around doing stocktakes and checking vouchers with accounts. She otherwise felt that she had limitations doing the supplier role, and was concerned that her performance would not be regarded as equal to that of her peers.
40. In a further Department of Defence Employment Standard Review form dated 18 December 1987, in addition to her previously noted limitations, it was recorded that she could not lift weights in excess of 10 kilograms, (T23, p. 55).
41. There is no definition of ‘incapacity’ in the Act. ‘Incapacity’ was, however considered in Re Burr and Commissioner for Superannuation (AAT 411, 30 September 1980). The Tribunal said at paragraph 22:
“The phrase `incapacity which was the ground for...retirement' is not we consider necessarily to be seen as itself connoting a physical or mental condition. It would seem to relate more properly to the outward result that leads to a person being unable to perform, that is to say to lack the capacity to perform, his or her duties. The distinction between `incapacity' and a ‘condition’ is clearly made in the legislative text, where the question is raised as to whether the incapacity was caused or substantially contributed to by a condition or conditions.”
42. In Cocks v Commissioner for Superannuation (1990) 21 ALD 297 at pp. 305-306, Davies J., proceeded on the basis that it was proper for the Commissioner to form his own opinion of what the retirement incapacity was. Incapacity is the inability to do something. A person may have a certain capacity for an activity, and as long as they do only so much of that activity as they have capacity for, there is no incapacity for that activity, for example light duties. If, as in this case, a medical condition reduces capacity, so that there is no capacity to do an activity the person could previously do, it is that inability, not its cause which is the incapacity. In this case, Ms Hatherall did not have the capacity to fulfill the duties of a storeperson because she lacked the mobility required. Her limitations were particularly in relation to her ability to bend, squat or lift.
4.What was the physical or mental impairment which was the cause, of the invalidity or physical or mental incapacity by reason of which Ms Hatherall was retired?
43. On 9 August 1988, A Department of Defence Discharge Health Statement, (T28, p. 69), recorded Ms Hatherall’s response to questions relating to illnesses’ or injuries she suffered ‘at the present time’, and to disabilities suffered during her military service. She stated that she suffered from arthritis in the left knee due to an injury on 14 November 1982 and, that during her military service she was unable to run, march, cycle, kneel for a prolonged period of time, squat or lift heavy weights, (T28, p. 69).
44. I also note the comments of the Medical Officer, which are located on the bottom half of the same Discharge Health Statement (T28, p. 69). Flight Lieutenant Searl comments by writing:
“Discharge medically unfit for further service G8P -- 05 May 88 -- due to Left Patello Femoral Arthritis with a bone restriction”.
45. On 23 February 1983, Dr Huntsdale, orthopaedic surgeon, reported to Dr Dowd that:
“As you know, she slipped on wet concrete and injured the inner side of her knee. She said there was bruising and swelling on the inside. She now complains of clicking and catching underneath the kneecap but no real swelling and has no restriction on range of movement, (T8, p.21).
46. I therefore find that it was Ms Haterall’s ‘Left Patello-Femoral Arthritis with a bone restriction’ which was the reason she was discharged from the RAAF.
5.Has Ms Hatherall suffered from any other physical or mental impairment causally connected with the prescribed physical or mental impairment?
47. Section 34(1B)(b) of the Act provides that a prescribed physical or mental impairment includes any other physical or mental impairment of the member which is causally connected with the member’s retirement impairment(s).
48. Ms Hatherall’s solicitor referred me to the Tribunal’s decision of 11 February 2002 in relation to Ms Hatherall’s claim under the Veterans’ Entitlements Act 1986 (‘the VE Act’). The Tribunal determined that Ms Hatherall suffered from osteoarthritis of the right knee, adjustment disorder with depressed mood and lumbar spondylosis and that these conditions were defence-caused. While that may be the case, the test under the VE Act is different to that to be considered here.
49. In Perrett v Commissioner for Superannuation (1991) 29 FCR 581 at 592, the Full Federal Court considered the meaning of ‘connected with’ in the context of subsection 66(2) of the Superannuation Act 1976. The Court stated:
“As Jenkinson J. pointed out, had the draftsman intended to confine the operation of s.66(2)(c) to cases where there was a causal relationship between the two conditions, there would have been no difficulty in saying so in unambiguous terms. Yet there was chosen a phrase of wide connotation which merely requires a relation between one thing and another: see Our Town FM Pty Ltd v Australian Broadcasting Tribunal (1987) 16 FCR 465 at pp 479-480 and the cases there cited. It seems to us that the conclusion expressed by the Full Court in Benham, and by Jenkinson J. in this case, was correct. The Tribunal was correct in holding that psoriatic arthritis might be connected with psoriasis notwithstanding the lack of any causal relationship between the two conditions.”
50. In Re Levin and Defence Force Retirement and Death Benefits Authority (1997) 48 ALD 664, the Tribunal, considered the connotations of the term ‘causally connected with’ in an identical provision contained in subsection 53(1B)(b) of the Defence Forces Retirement Benefits Act 1948 and determined that (at 682):
“Whether one impairment has a causal connection with another impairment within the meaning of s.53(1B)(b), the question must be whether one impairment can be said to be associated or linked with another so that one can be said to be an effect or consequence of the other” (emphasis added).
51. The Authority contended that Ms Hatherall does not suffer from any physical or mental impairments which are causally connected to the impairments for which she was retired. Ms Hatherall contended that her low back, right knee have been affected by her left knee condition and that she has a psychiatric condition as a consequence of her physical limitations.
52. I turned then to consider each of these conditions in turn.
Back
53. Ms Hatherall’s contention was that her low back condition was as a result of the altered gait caused by her knee problems. Her obesity, which has also contributed to her back condition, has resulted from her inability to exercise due to her knee(s).
54. Her contention is only partially supported by her doctors.
55. On 27 January 1999, Dr Ghabrial, Professor of Orthopaedic and Spinal Surgery, reported that:
“Regarding the back, I believe that her altered posture as a result of her knees is causing strain on her lower back but I could not find any clinical evidence of any disc protrusion at that stage”. (T41, p.109)
56. At the hearing Dr Ghabrial gave evidence that it was not unusual for a person to put on 20 kilograms due to lack of activity and water retention following an injury. In cross-examination Dr Ghabrial said that other factors which would result in weight gain included the use of anti-inflammatories and depression.
57. He said he considered Ms Hatherall’s back problems to be temporary, due to her use of crutches.
58. On 5 July 2000, Dr Sambrook, Professor of Rheumatology, reported that:
“In regard to the lumbar spine, this is usually a degenerative condition related to aging (which is not operative here) and obesity (which is operative here) with the possibility of a lesser contribution from Ms Hatherall’s gait. Again one cannot exclude some contribution from altered gait to that diagnosis, but I would think that this is generally an unlikely scenario in comparison to the right knee where I think there is a more likely direct causal chain or link.” (T51, pp.153-154)
59. Dr Jones, Consultant Orthopaedic Surgeon also reported on 18 November 2002, on whether Ms Hatherall had a causally connected impairment of the back:
“The causal connection of the…lumbar spondylosis…is more doubtful.” (T78, p.302)
60. At the hearing Dr Jones said that the narrowing he observed in Ms Hatherall’s x-rays at L5/S1 was not unusual in a woman of her age. He said he considered it unlikely that a change of gait contributed to the narrowing, although it may have aggravated symptoms. In cross-examination, he agreed that Ms Hatherall’s obesity aggravated the symptoms of her back.
61. In relation to Ms Hatherall’s obesity, it was further submitted that her ability to exercise was further affected when she broke her ankle when she tripped getting out of a spa by way of treatment for her knee.
62. I note however that her GP, Dr Wark, in the records which were referred to extensively in the course of the hearing (Exhibit R2), that in December 1988, Ms Hatherall was described as 'obese’ and that she eats when depressed or anxious. It was observed that, at that time at least, Ms Hatherall had significant personal distress, quite unrelated to her knee condition, which would be likely to have made her ‘depressed or anxious’. In cross-examination Ms Hatherall said that she had ‘always’ had problems with her weight. In October 1992, Dr Wark also recorded that at that time Ms Hatherall weighed 106 kilograms.
63. In February 1995, Dr Wark recorded that Ms Hatherall’s left knee became tight and hard to bend with ‘walking/cycling/dancing recently…’. Ms Hatherall said that she did none of those things between 1988 and 1995, but thought she would try them at that time to try to lose weight. She did say she used an exercise bike before 1995, and would walk around the area and that her dancing was not ‘big time dancing’, just trying to move. She said the reference to ‘bushwalking’ in 1996 was incorrect, as she was only searching the verge of the road for a lost item.
64. After reviewing all the medical evidence and Ms Hatherall’s own evidence in relation to her back I came to the view that it could not properly be said that her back condition is causally connected with her left knee condition. I do not accept that her obesity was causally connected with her left knee condition, in that caloric intake is a matter within one’s own hands. Furthermore, given the connection stated by her GP it is likely to have been significantly connected with her emotional state, rather than inactivity. On the basis of the GP’s notes there is also some doubt that she was quite as immobile, at least in the 10 or 12 years after the accident, as was suggested.
65. The evidence does not support the contention of altered gait affecting the back.
Right knee
66. Ms Hatherall injured her right knee while ice skating when a teenager.
67. On 25 September 1981, in her Department of Defence Entry Medical Form, Ms Hatherall reported that she had had an ‘open operation rt knee following fracture tibia 1978 - No further trouble - 11 days hospital’, (T4, p.12)
68. On 14 May 1982, Dr Rickard observed:
‘changes of past right femoral condylar Osgood-Schlatter’s disease. Minimal bilateral degenerative change in the knee joints’. (T10, p.24)
69. On 23 February 1983, Dr Huntsdale reported that:
‘Kathy Hatherall…at the age of sixteen had a surgical procedure performed at Royal Newcastle Hospital on her right knee, the nature of which is a little uncertain. From the size of the incision it looks to me as though it must have been for recurrent dislocation of the patella. I am suspicious that something similar is going on in the left knee.’ (T8, p.21).
70. On 27 January 1999, Dr Ghabrial reported that:
“Going back through the deterioration of her right knee, which I believe could be of 2 factors. The first is the fact that she had an injury to the right knee, although she managed quite well following that injury, but then as she had an injury to the left knee and had to put more weight on her right knee, that probably has made the right knee more symptomatic after the 2nd injury of 1982”. (T41, p.109)
71. More recently, in his report dated 19 August 2003, Dr Ghabrial stated:
“She has been developing symptoms in her right knee and that is most likely related to excessive use of the right knee avoiding use of the left knee during the past 20 years or so. She started to develop symptoms in the right knee around 1983.
.I believe that Mrs Hatherall will never be able to return to any useful employment because of her marked disabilities.” (T26, p56).
72. At the hearing Dr Ghabrial was of the view that 70% of Ms Hatherall’s right knee problem was due to her left knee, although Dr Jones thought it more in the order of 30%.
73. On 5 July 2000, Dr Sambrook, reported that:
‘The most likely primary cause of the degenerative changes in the right knee is the osteochondral fracture she sustained in 1978 with the subsequent resection of that lesion. This would predispose her to developing osteoarthritis. However, one cannot exclude some contribution from the problems in her left knee (where she has an accepted disability) as causing her to alter her gait and contribute to accelerated osteoarthritis in the right knee.’ (T51, p.153)
74. On 18 November 2002, Dr Jones reported:
‘The causal connection of the osteoarthritis of the right knee…is more doubtful’,(T78, p.302)
75. Dr Wark’s records noted that Ms Hatherall had problems with her right knee as early as 1993, at the TAFE camp, to which she had referred in her evidence. In January 1998, she fractured her right ankle. A week later she attended complaining of spasms of the knee and aggravation since her right ankle had been in plaster. Dr Kirkham, a few days later, considered the knee problem to be an overload of the knee by the plaster weight.
76. Ms Hatherall wrote in a statement dated 3 January 1998:
“Broke my right ankle. Had operation, had the ankle in a cast for 6 weeks, then intensive physiotherapy. The ankle recovered well. The right knee had been just coping before the accident to the right ankle and so became worse. The right knee slides and is very unstable and painful. I had/have to walk with the aid of a forearm crutch all the time now and cannot drive very far now. I cannot walk far either because of the pain in my knees and back. “(T63, p230).
77. As to her right knee had been ‘just coping’ before the injury to the right ankle, the contention is twofold. Firstly it was said that the weight of the plaster and the need for a crutch affected the right knee and made it symptomatic. I note however that as early June 1996, that is, before the injury to her right ankle, Dr Wark considered the right knee appropriate for repeat arthroscopy.
78. The second contention, in which I find more merit, is that Ms Hatherall’s gait was altered as a result of the left knee condition. Ms Hatherall had an earlier problem with her right knee which, according to the medical evidence, would predispose her to developing osteoarthritis. I accept though that she had made a good recovery from that condition, but when her left knee problem caused an alteration in her gait, her right knee became symptomatic and further deteriorated.
79. I therefore find that her right knee condition is causally connected with her left knee condition.
Psychiatric condition
80. Ms Hatherall said she first saw a psychiatrist in 1997 when she was referred by Dr Wark. Dr Lumley reported she was experiencing ‘discomfort’ arising from personal events in 1989 and 1990 which were unrelated to her physical condition. She also saw Dr Lumley in anticipation of him providing a report for her victims compensation claim, (T33, p.76).
81. On 28 January 1999, Dr Murray, consultant psychiatrist, provided a report in association with Ms Hatherall’s claim under the VE Act. He wrote:
“The story that Ms Hatherall seemed intent to present was that of emotional troubles as a result of orthopaedic injury. This seems plausible, and I would hazard a guess that she suffers chronic, at least mild depression and anxiety, predominantly attributable to that cause. The information at hand does not allow me to be specific in terms of diagnosis.
However, it seems to me that Ms Hatherall’s more serious emotional disturbance is a Personality Disorder. The origins of this condition almost certainly predated her military service. This Personality Disorder, and the behavioural expression of the Personality Disorder (which might include maladaptive sexual behaviour), would be likely to make contributions to symptoms of depression and anxiety.”(T42, p.114)
82. At the hearing Ms Hatherall said that she had been unable to establish a rapport with Dr Murray and that the consultation had been ‘managed’ by her advocate.
83. On 27 July 2000, Dr Dinnen, consultant psychiatrist, was also asked by the Department of Veterans’ Affairs to provide a report. Ms Hatherall did not raise the other personal matters with him, she said, because, at the time, they were not relevant. Dr Dinnen reported that:
“This patient suffers from an adjustment disorder with depressed mood consequent to orthopaedic disability.
The condition on its own account causes mild to moderate disability, and would not prevent her from working, but would somewhat impair her efficiency. As the depressed feelings are linked to physical disability, the future prognosis very much depends on the progress of her orthopaedic conditions, and long term supportive management from her understanding general practitioner will provide optimum management.
It is my view that the adjustment disorder with depressed mood is a consequence of the osteoarthritis of the left knee. Itself a service related disability. The standard of proof, the balance of probability, is easily satisfied in my opinion.” (T53, p.166)
84. At the hearing Dr Dinnen acknowledged that Ms Hatherall had a number of ‘life event’s, but he did not go into them in his consultations. He conceded in cross-examination that she may have ‘rationalised’ her condition and blamed everything on ‘her legs’.
85. Dr Jones, also reported, on 18 November 2002 on whether Ms Hatherall had a causally connected impairment:
“I consider the principal impairment is the psychiatric one. A psychiatrist is best able to describe and quantify this and hence, he would provide answers to your questions¼”. (T78, p. 302)
86. Ms Hatherall said that it was not until the latter part of 2002 that she first took antidepressants, in the form of Zoloft. Dr Dinnen reported at the hearing that her dosage was at the lower end of the range.
87. Ms Hatherall told Dr Brown, Consultant Psychiatrist, whom she saw at the request of the Authority in November 2002 that her frustrations make her irritable and angry. He noted the eight occasions that Ms Hatherall had attended Dr Wark for mood disturbance and that there were up to 33 months between attendances. At the hearing Dr Dinnen was critical of Dr Brown’s conclusion on the basis of pattern of attendance.
88. Dr Dinnen regarded Dr Brown’s conclusion that Ms Hatherall was a ‘malinger’ to be ‘dangerous’. He said fluctuations in Ms Hatherall’s psychiatric response, which were consistent with an ongoing psychiatric disorder, was in response to her environment. He said that if Ms Hatherall’s condition were a minor adjustment disorder, only then it would not interfere with her capacity for work on its own, other than to make her more irritable and unreliable. Combined with orthopaedic problems, it would cause her to react to that disability.
89. Dr Brown explained at the hearing that he would have expected more regular and frequent requests for psychiatric assistance. He said that adjustment disorder was a reactive condition and that it was only when there was a sustained stressor that it became a psychiatric condition. He acknowledge that Ms Hatherall may have been frustrated by her chronic pain and when she had undergone training, frustrated again at her failure to achieve or sustain employment. He said her reaction to her condition was normal for people with chronic pain.
90. In response, Ms Hatherall said she does not like to talk about her inability to cope. As a single parent she was reluctant to take medication, and currently does not do so.
91. Ms Hatherall has seen several psychiatrists over a number of years, for a number of different purposes. She expressed at the hearing a lot of anger over the management of her condition in its early days and resented the implication that she was a malingerer. It does seem that her knee was not managed in an optimal fashion. However some years have passed since the accident in which she injured her knee and, she left the RAAF over 15 years ago. There was clear evidence that she has experienced a number of very distressing personal events in her life, any one of which might have evoked a very negative response.
92. I cannot accept that if she does suffer a psychiatric condition that that condition was caused by the accident to her left knee.
5.To what degree has Ms Hatherall’s prescribed physical or mental impairment diminished her capacity to undertake the kinds of civil employment identified above?
93. On 9 December 1998, Dr Rosenthal, Occupational Health Consultant, reported:
“Ms Hatherall is not suited to any work that involves prolonged walking, driving or outdoor work, where she is likely to walk over uneven ground.
She is best suited to office based clerical work or work that involves sitting in an office perhaps such as counselling, or other office based work where she can sit and stand as required and where there are no significant steps or other hazards that may cause her difficulties.
Within the confines of these restrictions she should look for employment which is office based…”.(T40, pp.106-107)
94. The Full Federal Court in Defence Force Retirement and Death Benefits Authority v. House (supra) at 141 stated that it is not the actual attainment of employment that is the relevant question of subsection 34(1A)(b) but rather:
“… the primary question posed by par (b) is not what an employer might do, nor even what the particular member might do, but what a hypothetical person with the relevant skills, qualifications and experience "might reasonably undertake". Substituted expressions may tend to lose the peculiar force of the statutory language, which does not at all suggest that the absence of a particular licence, or the need of a particular refresher course, would constitute a barrier.”
95. The Act does not state how the percentage is to be arrived at, except to note in section 30(2) and section 34(1A) that there be consideration of the degree to which the physical or mental impairment has diminished the capacity to undertake the specified kinds of employment. Assessing the percentage of incapacity in regard to civil employment is the most difficult requirement of section 30 and section 34, and has been the subject of lengthy deliberations by the Tribunal and the Federal Court. Davies J. in Re Thomson and Defence Forces Retirement and Death Benefits Authority (1987) 6 AAR 424 at 433 stated his interpretation of the provision:
“The width of the range of employment is only one of the matters to be taken into account. The quality and nature of the range is another. Moreover, a particular impairment may indeed not greatly reduce the range of employment opportunities, but may preclude the person from working more than part time or intermittently. Thus the determination of a percentage is not to be undertaken as if it were a mathematical calculation. Rather, it is a value judgment of the extent to which, expressed in percentage terms, and taking into account only the matters set out in s.34(1A) a person has suffered incapacity to engage in civil employment brought about by a prescribed physical or mental impairment.
96. The relevance of a former member of the Defence Force obtaining and remaining in civil employment in determining the percentage of incapacity to undertake that particular kind of civil employment was considered by the Full Federal Court in Freemanv Defence Forces Retirement and Death Benefits Authority (1985) 5 AAR 156 where Sheppard J. stated (at 160):
“It is to be observed that the matters specified in section 34(1A) as the matters to which the Authority is to have regard are the only matters with which the Authority is to be concerned. The subsection is exhaustive in this regard.”
97. Sheppard J. further stated at 163-164:
“The Act … looks only at the degree to which a member’s incapacity to undertake civil employment has been diminished: see ss 30(2) and 34(1A). The Act itself takes no account of his actual earning capacity at a given time, although the fact that he is engaged in particular employment will be a relevant factor for the Authority to consider when determining his percentage of incapacity. But there may be cases where, although a member is employed, he is doing work with such difficulty or under such stress or circumstances that it is plain that he has not any real capacity for it. The fact that he is in employment may be due to the kindness of an employer or of fellow employees or both, or because of his ability, at least for the time being, to mask his disabling condition.”
98. Beaumont J. also stated (at 171) that the Authority cannot have regard to ‘merely collateral considerations notwithstanding their capacity to influence the member’s prospects of obtaining employment in a particular case’.
99. Ms Hatherall‘s solicitor submitted that for much, if not all of the time since 26 July 2002, Ms Hatherall has been unable to work because of her left knee. Her right knee condition and her back he said, probably made little difference to her ability to gain employment, but her psychiatric condition made ‘a large impairment, worse’.
100. The Authority contended that Ms Hatherall’s level of capacity for the kinds of civil employment identified above was 20%, and therefore her invalidity classification on 26 July 2002 was Class C for the purposes of section 34(1A) of the Act.
101. The Tribunal in Ms Hatherall’s claim under the VE Act determined that she was unfit to work more than 8 hours a week with effect from 19 July 1998 as a result of her bilateral knee injuries, lumbar spondylosis and adjustment disorder. In making this finding the Tribunal had regard to Ms Hatherall’s skills, qualifications and experience, in accordance with section 28 of the VE Act. Again the test under that Act is different to that to be considered here.
102. The task of assessing Ms Hatherall’s diminished capacity to undertake civil employment in the period under review was discussed by the Tribunal in Re Bos and Defence Forces Retirement and Death Benefits Authority (1977) 1 ALD 31 at 34 when it said:
“Diminution in earnings is not the only criterion for determining the percentage of that incapacity - indeed there may be cases where there is a substantial incapacity affecting the employability of a person entitled to benefit which does not produce any, or any significant, effect upon his earnings. On the other hand, a relatively minor diminution in employability may entail a large loss of income, and occasion a substantial percentage incapacity. `Incapacity in relation to civil employment' is a wider concept than the `ability to earn income'. An `incapacity' may be said to be `in relation to' civil employment if the opportunities to engage in civil employment and to derive benefits from that employment are restricted by reason of the incapacity."
103. My task is to make a non-arithmetical determination of the extent to which, expressed in percentage terms, and taking into account only the matters set out in s 34(1A), Ms Hatherall has suffered incapacity to engage in civil employment.
104. I turn to consider the relevant medical evidence.
105. Ms Hatherall gave clear evidence that in the period under consideration she had a number of weeks either in hospital or undergoing rehabilitation in respect of surgical intervention for her left knee.
106. On 28 August 2000, Dr Burns reported that, at that time, Ms Hatherall had a ‘very restricted choice of work’. He considered that her musculoskeletal problems would restrict her to sedentary work where she would also need to be able to move around to relieve symptoms. Clerical work of a general nature would be the most appropriate with a mixture of telephone answering, filing and some keyboard work. This was consistent with Ms Hatherall’s own evidence of her discomfort. (T54, p.168)
107. On 27 February 2001, Dr Ghabrial reported that Ms Hatherall’s left knee injury precluded her from activities involving any running, climbing ladders, walking on uneven surfaces, walking for long distances as well as going up and down stairs excessively. (T58, p.174)
108. On 5 September 2001, Dr Pacey, Consultant in Rehabilitation and Pain Medicine, considered that Ms Hatherall could not return to work that required any physical activity such as lifting, bending, reaching, climbing stairs or siting for prolonged periods. He considered her unable to tolerate full time work and could undertake part time work only. The work would need to allow her to change her posture and not to be involved in any bending or lifting and not to require prolonged sitting. In this instance, clerical work that requires sitting at a keyboard for long periods of time is not suitable. (T60, p.181)
109. On 4 April 2002, Dr Billett, Consultant Orthopaedic Surgeon, suggested that Ms Hatherall limit prolonged standing, walking, negotiating stairs, kneeling, squatting and limit stairs on a long-term basis.
“Ms Hatherall’s capacity to work as a store person, general clerk or shop assistant is diminished by 10% to less than 30% (small).” (T65, p. 246)
110. On 3 September 2002, Ms Andree Lack, rehabilitation consultant, reported that:
“Any work [Ms Hatherall] did would have to be sedentary in nature, allow frequent changes in posture, not involve driving, preferably be in the mornings (Kathleen is in less pain in the morning and more able to concentrate) and be within a short driving distance from her home”. (T74, p.265)
111. On 16 September 2002, the CRS Australia case officer wrote:
“Kathleen is still very keen to look at her work options, however, this is not appropriate to be pursuing at least not in the short-term. It will not be known for at least twelve months if it is possible for Kathleen to return to some form of work.” (T15, p.34 – N2003/1910)
112. On 18 November 2002, Dr Jones, diagnosed Ms Hatherall as suffering impairments of the left and right knees, impairment of the lower back, psychiatric difficulties and gross obesity, related to life-style following the accident. He reported that:
“Currently, Ms Hatherall is unable to walk. She appears to have to be assisted from the sitting to standing position and reverse and hence I consider that she is totally disabled from undertaking any gainful employment whatsoever at present.
…
It is my assessment that Ms Hatherall’s capacity to undertake employment as a storeperson has been diminished to a large extent, that is 60% to less than 100% as a result of her current impairments.
It is my assessment that Ms Hatherall’s capacity to undertake employment as a general clerk has been diminished by her impairments to a large degree, that is 60% to less than 100% as a result of her current impairments.
It is my assessment that Ms Hatherall’s capacity to undertake employment as a sales assistant has been diminished to a large extent, that is 60% to less than 100%.
It is also my assessment that Ms Hatherall’s capacity to undertake any work has been diminished to a large extent. My overall assessment being that this is equivalent to 60% to less than 100%”. (T78, p. 301)
113. On 4 December 2002 when Ms Hatherall was hospitalised, Dr Laycock, consultant in rehabilitation medicine, reported that:
“Ms Hatherall was admitted for rehabilitation assessment and management of her significant patello-femoral knee pain problems on left and right sides and her difficulty in safely moving about and carrying out her everyday life as a consequence of these problems.
…
The level of disability that Ms Hatherall currently has is very high and the seemingly modest goal of returning to home is the single focus for our current endeavours. It is important not to focus on the more complex functional activities, such as work and complex leisure activities, until the more basic self-care skills have been mastered.
…
As a consequence, it is not a short or even medium-term goal to re-enter the competitive workforce. I belive that that is an important longer-term goal, but the time frame for this is yet to be ascertained. There is the potential that Ms Hatherall will have a long-term work disability (in relation to her ability to gain and maintain a position in the field of competitive employment). It is only once she has regained proficiency with her basic self-care that vocational goals can be reasonably set.”
114. On 16 April 2003 and 2 June 2003, Dr Jones regarded Ms Hatherall’s ‘Left Patello-Femoral Arthritis’ as a continuing significant problem with respect to walking. He observed that she was able to get around in a walker for short distances. She is not able to independently negotiate steps or lift or carry weights of any significant extent. He assessed the extent to which Ms Hatherall’s capacity to undertake each of the identified employment types has been diminished by the listed impairment alone:
Store person: Large (60% to less than 100%)
General Clerk: Small (10% to less than 30%)
Sales Assistant: Moderate (30% to less than 60%)
Welfare Worker: Moderate: 30% to less than 60%
The overall assessment assuming equal weighting for each kind of employment is moderate, that is, between 30% and 60%.
115. He considered that the larger part of Ms Hatherall’s impairment to be due to mental or emotional problems, but acknowledged that was outside his field of expertise. To that extent, and given my finding that Ms Hatherall does not suffer a causally related psychiatric condition, I have disregarded his further comments in this regard.
116. I do not consider that the impairment alters because of the right knee condition. If, for example her employment prospects are limited because of the identified serious mobility issues, those limitations apply whether 1 knee is under consideration or both.
117. In a report dated 19 August 2003, Dr Ghabrial stated:
“I believe that she is unfit for activities involving any running, climbing ladders, going up and down stairs excessively, walking on uneven grounds, standing for lengthy periods or walking for long distances”. (T26, p.56)
118. In respect of the role of storeperson, I find Ms Hatherall’s capacity has been diminished to a large extent; that is 60% to less than 100% as a result of her impairment. The position entails a level of mobility clearly beyond the capability of Ms Hatherall. There is no dispute on the medical evidence that there are significant limitations upon that work. The role has a component involving the very limitations which the doctors agree are outside her competence.
119. In respect of the role of sales assistant, I find Ms Hatherall’s capacity has been diminished to a moderate extent; that is 30% to less than 60% as a result of her impairment. Once again, the mobility required to conduct such a position would undoubtedly be beyond the capability of Ms Hatherall
120. In respect of the roles of general clerk and welfare worker I find Ms Haterhall’s capacity has been diminished to a moderate extent; that is to less than 30% as a result of her impairment. In respect of welfare work I consider there is some greater flexibility in that vocation. I observe though, that her ability to perform that role is also affected by her problems driving to locations, and whether those locations have stairs.
121. My overall assessment is that Ms Hatherall’s capacity for work is diminished to 30% or more but less than 60%,Class B as at 26 July 2002 and at 18 December 2002
DECISION
122. The Tribunal sets aside the decisions under review and in substitution therefor, the Tribunal decides that Ms Hatherall’s invalidity classification is 30% or more but less than 60%, Class B as at 26 July 2002 and 18 December 2002.
I certify that the preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member
Signed: .....................................................................................
Associate
Date of Decision 17 August 2004
Solicitor for the Applicant Mr P JonesSolicitor for the Respondent Mr A Dillon
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