Hoffman and Repatriation Commission - [2002] AATA 851

DECISION AND REASONS FOR DECISION [2002] AATA 851

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/212

VETERANS' APPEALS DIVISION          )
           Re      JOHN HOFFMAN
  Applicant
           And    REPATRIATION COMMISSION
  Respondent

DECISION

Tribunal Dr E K Christie, Member

Date27 September 2002
PlaceBrisbane

Decision      The Tribunal sets aside the decision under review and in substitution therefor decides that the applicant is entitled to pension at 100% of the General Rate.
  ...................(Sgd)......................
  Dr E K Christie
  Member
CATCHWORDS
VETERANS' AFFAIRS – disability pension – veteran assessed at 80% of the General Rate – whether entitled to Special Rate – reasons for ceasing work.

Veterans' Entitlement Act 1986 s 23, 24

Re Doyle and Repatriation Commission (1986) 47 ALD 187
Flentjar v Repatriation Commission (1997) 48 ALD 1
Forbes v Repatriation Commission (2000) 101 FCR 50
Re Forrester and Repatriation Commission (AAT 12510, 22 December 1997)
Hendy v Repatriation Commission [2002] FCA 602
Jackman v Repatriation Commission [1997] FCA 564
Sheehy v Repatriation Commission [1986] 41 ALD 205
Re Starcevich and Repatriation Commission (1986) 10 ALN 202

REASONS FOR DECISION

27 September 2002 Dr E K Christie, Member

This is an application by John Hoffman to review the decision of the Veterans' Review Board (the "VRB") made on 5 March 2001 which determined that the conditions of post traumatic stress disorder ("PTSD") and alcohol abuse were service-related and increased disability pension to 80% of the General Rate.
The VRB concluded that Mr Hoffman satisfied the requirements of s 24(1)(b) of the Veterans' Entitlement Act 1986 ("the Act"). However, this was not the case for s 24(1)(c) as Mr Hoffman's service disabilities, alone, did not prevent him from continuing to undertake remunerative work. The VRB concluded:
"20. In this case, the Board noted evidence that the veteran has not worked since leaving the Army 20 years ago and at the time was categorised by the Army as "FE", indicating he had no major medical impediments then. Consequently, the Board formed the opinion that Mr Hoffman was not prevented by medical disabilities from working when he left the Army. The Board's analysis of the veteran's work capacity commences at the beginning of the assessment period. By then, his accepted disabilities had a role to play in his being out of work but the main reason was that he had not worked for more than 20 years. The prospect of employment in that situation was not a realistic one. In that situation, accepted disabilities were not the sole, or even the substantial, reason for his no longer being engaged in remunerative work. As a result, he does not meet the requirements of subsection 24(1)(c) and, therefore, the Board is reasonably satisfied that he is ineligible for an earnings-related rate of pension. (T4, Folio 67)."

At the hearing, Mr A Harding of Counsel represented Mr Hoffman. Mr J Kelly, a Departmental Advocate represented the Respondent.
The Tribunal had in evidence before it documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (the "T" documents) (Exhibit 1) and the various documents tendered by the parties.
Mr Hoffman, his wife, Ada Hoffman, and Mr Ronald Madigan gave oral evidence on behalf of the Applicant. Dr John Gibson also gave evidence on behalf of the Applicant. The Respondent called no witnesses.
Accepted and Rejected Disabilities
The following Table summarises the accepted service-related and nonservice-related disabilities for Mr Hoffman.
Service-Related Disabilities Nonservice-Related Disabilities
Meniscal Lesion of Right Knee Sprain or Strain of Right Foot and Ankle Post Traumatic Stress Disorder (17 November 2000) Alcohol Abuse (17 November 2000) Sprain or Strain of Left Foot and Ankle Sensorineural Hearing Loss of Left Ear Lumbar Spondylosis Hypertension Cervical Spondylosis Obesity

Issue to be Decided

The only issue for the Tribunal to decide was whether Mr Hoffman was entitled to pension payable to him at the Special Rate. Based on the conclusions of the VRB and contentions of the parties only the application of s 24(1)(c) of the Act was in dispute, together with the ameliorating provisions of s 24(2)(b). Prior to final addresses, Mr Kelly for the Respondent made the following concession:
"If TPI doesn't get up Mr Christie, the Commission is prepared to concede that Mr Hoffman's pension should be increased to 100% after seeing him here."

Facts

The general facts were not in dispute and may be stated briefly. Mr Hoffman is now aged 62 and served with the Australian Army from August 1960 until October 1980. He left school at Grade 7 and was a professional shooter for six years before joining the Army.
Mr Hoffman was discharged at his own request after completing 20 years of service.
Mr Hoffman had not engaged in remunerative work after discharge.
Mr Hoffman lodged his application on 24 July 2000 (T4, Folio 5).
Oral Evidence of John Hoffman
Mr Hoffman did not have any trade or formal qualifications prior to joining the Army when he was aged 20. On leaving the Army, aged 40, he had not worked. He had brought a small boat and went recreational fishing "a lot of the time". He had contemplated taking up security work following discharge but asserts that his PTSD and alcohol abuse, although not diagnosed at that time, would have prevented him from doing so. He said that "he could not see the sense in getting a job since he was getting good money from the Army." Following discharge, Mr Hoffman had never looked for a job, never considered looking for a job and had never considered training of some sort to improve prospects of getting a job.
During Mr Hoffman's evidence, the Tribunal observed that his failure to respond to some questions may have reflected memory problems. Mr Hoffman's response to some questions was that "I do not have a good memory of this period".
Oral Evidence of Ada Hoffman
Mrs Hoffman described her husband's heavy drinking habits and long history of drinking, as well as the accompanying mood swings. She said that her husband had not consulted her about his desire to obtain a discharge from the Army and that she found it difficult at the time, as some of their children had not completed their education.
Mrs Hoffman said that following his discharge, her husband was interviewed for a job as a courier driver but this opportunity was lost because of financial problems of the courier company. She said that Mr Hoffman had undertaken seasonal work for six weeks in January 1981 and 1982 as a fruit picker in Victoria.
Prior to going to Vietnam, Mrs Hoffman described her husband as a "happy go lucky" character. However, these features were completely changed when he returned from Vietnam as he became a totally different person from the person she met prior to his service in Vietnam
Mrs Hoffman provided the following description of her husband's behavioural and emotional characteristics on discharge as well as his capacity to undertake employment (Exhibit A2):
"When he came home after discharge he really just withdrew into himself. He did not want to be near anyone. He bought a boat and went out fishing on his own. When he was at home he spent pretty much all his time drinking. All his difficulties were still there in that he could not relate to people and frequently lost his temper. He would not leave the house other than to go out on his boat or to go and buy his grog.
I do not believe that my husband would have been able to get a job with anyone. He really had no interest in anything or motivation to do anything including finding work. When it was suggested to him by friends that he needed to get a job, he said all he knew how to do was killing people and that he could not get a job in that. I do not believe my husband could have worked for anyone due to the fact that he could not handle any form of pressure or stress. He had lots of difficulty dealing with people and the frequent arguments would have meant that he was not able to cope in the workforce. My husband definitely would not have managed a job interview as if someone asked him a question he would most likely just have abused them."

Mrs Hoffman told the Tribunal that for the last few years her husband had memory problems and remembered very little. She had been told at Greenslopes Hospital in March 2002 that her husband had alcohol dementia. She said that her husband did not believe that he had PTSD or alcohol abuse problems.
Oral Evidence of Ron Madigan
Mr Madigan said that he and Mr Hoffman had Army postings in PNG in 1976. He said that he was aware that Mr Hoffman had a serious drinking problem. Notwithstanding this problem, Mr Hoffman continued to do his Army work because he knew exactly what he had to do.
Oral Evidence of Dr John Gibson (Psychiatrist)
Dr Gibson provided the following chronological pattern of symptoms of PTSD in the population, based on some 600 Vietnam veterans that had consulted him in his private practice over the past 10 years:
(i)the most common pattern was that people experienced a lot of symptoms of PTSD for the first few years after coming home and then seemed to engage in a period of denial of their difficulties;
(ii)around their mid-life years, in their "40s", the symptoms often came back and menaced them again with further withdrawal. Inactivity, by not being employed, seemed to aggravate and to amplify the disorder. It was almost as though work could be a protection factor by helping an individual to distract themselves from the symptoms and to cope with a degree of denial; and
(iii)the final stage occurred when the last pillar of support disappeared and then the individual went into a secondary worsening by having more time to themselves and so deteriorated even further.
Dr Gibson stated that he had not seen Mr Hoffman until August 2000, and with respect to applying the above chronology for PTSD to Mr Hoffman's particular circumstances said:
"…while I cannot comment specifically on what happened to Mr Hoffman, because it was 20 years later that I saw him. But its not inconsistent with a large number of descriptions from other veterans."

During cross-examination by Mr Kelly, Dr Gibson conceded that it would be speculation for him to comment on "how he [Mr Hoffman] was in 1980."
In response to questions raised by the Tribunal in relation to Mr Hoffman's PTSD and alcohol abuse, Dr Gibson expressed the following opinion:
(a)That his PTSD and alcohol abuse conditions were chronic disorders and would have been present over the period 1980 to 2000;
(b)That the history given to him by Mr Hoffman of "angry outbursts, short fuse, mood swings, feeling continually on edge" would have affected his capacity to work over the period 1980 to 2000 because "these symptoms are often the most troublesome in the workplace in terms of impaired concentration and interpersonal difficulties".Whereas the Regular Army was often a very supportive environment in these circumstances, Mr Hoffman's symptoms would have caused more problems in the civilian world; and
(c)that the chronology of the pattern of PTSD symptoms he described occurred in around 95% of the 600 patients he had seen.
When asked by the Tribunal, at the time Mr Hoffman applied for a pension, questions about the effects of PTSD and alcohol abuse or his ability to work, Dr Gibson gave the following responses [in italics] to each question:
(a)Would the effects of alcohol abuse, alone, prevent Mr Hoffman from working?
"I felt, yes, it was quite severe".
(b)Would the effects of PTSD, alone, prevent Mr Hoffman from working?
"I would think so from the history I obtained. When the two disorders co-exist, its very often the effects of the alcohol abuse that overshadows."
(c)Would the effects of PTSD and alcohol abuse, combined together solely prevent Mr Hoffman from working?"
"Yes they would have."

Contentions and Submissions of the Parties

Mr Harding commenced by identifying the relevant remunerative work Mr Hoffman might undertake as military or security-type work.
Mr Harding contended that the evidence of Mrs Hoffman, together with Dr Gibson's evidence, supported the conclusion that Mr Hoffman was prevented from undertaking military security-type work because of his alcohol abuse and PTSD.
With respect to time out of the work-force (20 years) and age (60 years) as factors preventing Mr Hoffman continuing in military security-type work, Mr Harding submitted that the correct approach for the Tribunal to adopt was that adopted by Madgwick J in Hendy v Repatriation Commission [2002] FCA 602:
"40. It seems clear however that it is not within the intendment of the legislation that decision-makers might resort, under the rubric of labour market factors, to the mere consequences of a veteran's service-related disability for the purpose of defeating the veteran's claim. Among other things, if a service-related condition incapacitates a veteran for particular work, it will be more or less true in every case that, as time goes by, the veteran's ability to re-enter the workforce will tend to be impaired on account of lack of recent experience of that work, absence from the workplace generally and, for older veterans, their increasing age. There would have been little point in providing for a work incapacity pension if the direct consequences of the incapacity could defeat the right to the pension."
Mr Harding contended that Mr Hoffman's 20 years in the Army would have equipped him with the skills to work as a security guard. Although Mr Hoffman was now aged 62, he contended that age would not prevent him from doing security-type work. However, he was prevented from undertaking this form of remunerative work because of his accepted service-related disabilities.
With respect to whether the alcohol abuse/PTSD incapacities result in Mr Hoffman suffering a loss of salary, wages or earnings, it was Mr Harding's contention that there was a real loss as Mr Hoffman was unable to undertake security-type work because of his war-service incapacities.
Mr Harding concluded with the submission that if the Tribunal accepted that war-service disabilities, alone, prevented Mr Hoffman from undertaking remunerative work, then the s 24(2)(b) requirements would be satisfied without a need for Mr Hoffman to establish that he had made genuine attempts at seeking work in the first place.
Mr Kelly submitted that Mr Hoffman was not eligible for Special Rate pension in that he did not satisfy the requirements prescribed in s 24(1)(c). It was his contention that Mr Hoffman did not satisfy s 24(1)(c) in that he did not cease remunerative work, or was prevented from continuing remunerative work, due solely to the effect of his service-related conditions.
Mr Kelly contended that for reasons such as Mr Hoffman not working for 20 years, his age (60 years), his limited education (Grade 7), lack of qualifications and transferable skills, as well as a failure to retrain himself, the s 24(1)(c) "alone" test was not satisfied. Factors such as these, as well as the accepted service disabilities, contributed to Mr Hoffman failing to engage in or to continue remunerative work.
Mr Kelly contended that Mr Hoffman did not like the work he was doing in his last Townsville posting with Army housing. He submitted that Mr Hoffman was having difficulty doing the job in Army housing and, when he became aware that he was eligible for DFRB, he requested his own discharge.
Following his discharge, Mr Hoffman had not worked for 20 years, he had no other work experience apart from what had been accumulated in 20 years of Army service. Regardless of the nature of the work he might undertake, such as security-type work, Mr Hoffman had never put his skills out in the workplace and had never tested himself in the workplace.
Mr Kelly referred to Army medical records in which examination of Mr Hoffman had been undertaken over time (Exhibit R2 – 29 September 1980). Mr Kelly stated that Mr Hoffman was classified as "Fit Everywhere" ("FE"). Moreover, the medical records did not indicate that at any stage, Mr Hoffman's "emotional stability" or "mental capacity" had been identified as a problem. However, the Board had noted that Mr Hoffman was a heavy drinker, having a moderate to heavy intake of alcohol (Exhibit R2, Folio 1, 3; 29 September 1980).
Mr Kelly submitted that Mr Hoffman was not suffering from a loss of salary or wages on his own account that he would not be suffering if he were free of the effect of his service-related disabilities. It was his submission that Mr Hoffman failed the loss test. Put simply, there was no loss.
Finally, Mr Kelly contended that the ameliorating provision in s 24(2)(b) was not satisfied in Mr Hoffman's case as at no time in the 20 year period between discharge and lodging of the claim had Mr Hoffman genuinely sought remunerative employment.
Legal Framework
The special rate of pension is provided for in s 24 of the Act.The relevant provision of this section in this application for review is subsection 24(1)(c).
The following approach was used in Forbes v Repatriation Commission (2000) 101 FCR 50 at 52, 53 by RD Nicholson J to interpret and to apply the provisions of subsection 24(1)(c):
"That approach [ss 24(1)(c)] is best understood by dividing it into its two limbs and relating those limbs to the relevant portions of what follows in s 24(2).
The first limb of s 24(1)(c) reads:
'(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…'
That limb must be read subject to the application of s 24(2)(b) which reads:
'(b)where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.'
The second limb of s 24(1)(c) reads:
'(c)….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'
This is to be read in conjunction with s 24(2)(a) which provides:
'(a)a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, be reasons of that incapacity if:
(i)the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or
(ii)the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; and…'."
With respect to the requirements of subsection 24(1)(c), Nicholson J referred to the decision of the Full Court of the Federal Court in Flentjar v Repatriation Commission (1997) 48 ALD 1 at pages 4-5 where the Court said that the issues before the Tribunal were:
"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?"

The above matters must be satisfied to the reasonable satisfaction of the Tribunal in accordance with the standard in subsection 120(4): Re Starcevich and Repatriation Commission (1986) 10 ALN 202; Re Doyle and Repatriation Commission (1986) 47 ALD 187. That meant, as Tamberlin J noted in Jackman v Repatriation Commission [1997] FCA 564:
"The AAT had to determine, to its reasonable satisfaction, whether the applicant's war-caused disabilities were the only reason for him not being in remunerative employment. Burchett J in Cavell stated that this determination is not to be made upon 'nice philosophical distinctions', equally it is not to be made upon complex calculations of the probability that an intervening event may have occurred. The approach is to be guided by commonsense with an 'eye to reality'."
Central to this application for review is the meaning given to "remunerative work".
In Re Forrester and Repatriation Commission (AAT 12510, 22 December 1997), the then President of the Tribunal, Mathews J noted (at paragraph 20):
"The authorities make it clear that 'remunerative work' under s 24(1)(c) is not necessarily the last work performed by a veteran [Starcevich v Repatriation Commission (1987) 18 FCR 221]. In other words, a veteran's entitlement to a pension under s 24 may be based on his or her being prevented from undertaking substantial remunerative work which has been performed in the past, even though it was followed by work of a different type."
Sheehy v Repatriation Commission (1986) 41 ALD 205 considered the question as to what constitutes "remunerative work" under subsection 24(1)(c). The Full Court (Wilcox, Whitlam and Lindgren JJ) made the following observations (at pp 209-210):
"…In our opinion, the words 'undertake' and 'undertaking' in para 24(1)(c) import the notion of 'performance' or of a 'successful' or 'effective' undertaking of work….

The Full Court in its analysis of authorities then concluded:

"Although it is perhaps understandable that there have been references in the cases to a 'short' or 'very short' period of work, we would prefer to say that the 'remunerative work that the veteran was undertaking' must have been 'performed or successfully undertaken' or 'effectively undertaken'"

The Full Court held that entitlement to special rate only arose when the veteran was prevented from continuing to undertake work they had been successfully performing. In reaching its decision the Full Court stated (at para 31):
"Once it is accepted that the requirement of para 24(1)(c) that the Veteran must have been undertaking remunerative work requires that he should have 'performed' or 'successfully undertaken' or 'effectively undertaken' the work, the result in the present case becomes clear."

In Sheehy, the Full Court also made reference to the reasoning of Fox J in Starcevich's case and noted:
"Fox J stated that the loss sustained by the veteran had to be 'real' and this indicates that His Honour had in mind remunerative work that had been successfully undertaken."

Consideration of the Issues

Mr Hoffman served with the Army for 20 years. After his discharge in 1980, apart from two short monthly periods of fruit picking, he has never worked. It has been contended by the Applicant that the skills of Mr Hoffman acquired in the Army would enable him to find employment in the security industry – but for his service-related disabilities.
However, with respect to the requirement for undertaking remunerative work, and applying the reasoning in Sheehy's case (paras 44, 45, 46), the Tribunal can make no conclusion other than to find that Mr Hoffman cannot be said to have "performed" or "successfully undertaken" or "effectively undertaken" the work of a security guard. In turn, the Tribunal cannot find that the loss sustained by Mr Hoffman to be "real" (see Fox J in Starcevich).
Next, the Tribunal considers whether his accepted related disabilities prevented Mr Hoffman from undertaking that work.
Analysis of completed questions in the medical records of Mr Hoffman during his Army Service (Exhibit R2) provides the following information on his mental capacity:
(a)                 29 September – (Discharge)        Q51:    Mental Capacity – Normal Q40:    Nervous trouble/mental illness/attempted suicide – No PES:    FE
(b)      5 February 1980                  Q51:    Mental Capacity – Normal PES:    CZE
(c)       25 March 1977        Q51:    Mental Capacity – Normal Q41:    Nervous trouble/mental illness – No Q63:     Attempted Suicide – No PES:       FE
(d)      7 November 1975 Q50:    Emotional Stability – Normal Q51:          Mental Capacity - Normal PES: FE
(e)      1 August 1973         Mental Capacity – Normal PES:    FE
(f)       14 May 1997 Q48:    Emotional stability – Normal Q49: Mental Capacity _ Normal PES:    FE
(g)      1 November 1967    Q48:    Emotional stability – Normal Q49: Mental capacity – Normal PES:           FE
Evaluation of these records indicates that Mr Hoffman's emotional stability and mental capacity remained unchanged as "normal" during his Army service, over the period 1967 to 1980. Apart from one assessment (5 February 1980), his fitness classification remained as FE ("Fit Everywhere").
The evidence of Mrs Hoffman described her husband's behavioural problems and difficulties dealing with people (paras 16, 17). Dr Gibson's expert evidence was that Mr Hoffman's PTSD would have followed the same course or chronology over time as some 95% of his patients treated for PTSD (para 20). In addition, he confirmed that Mr Hoffman's PTSD was a chronic condition and that his symptoms would have affected his capacity to work over the period 1980 to 2000.
However, on consideration of the direct evidence contained in Army records, the opinion evidence of Dr Gibson for a period where Mr Hoffman was not his patient, together with the observations of Mrs Hoffman, the Tribunal is not reasonably satisfied that the extent of Mr Hoffman's social and occupational impairment arising from his service-related disabilities was such that he could not undertake remunerative work as a security guard from the time he was discharged from the Army. In addition, the Tribunal is reasonably satisfied that the failure of Mr Hoffman to "perform", "successfully undertake" or "effectively undertake" work as a security guard or to make genuine attempts to seek remunerative employment over the period 1980 to 2000 resulted in non-service factors [that is, a 20 year absence from the workforce] contributing to prevent him from undertaking remunerative work, at the time of his application.
Following the approach in Flentjar (see para 40), with respect to satisfying the requirements of s 24(1)(c): The Tribunal concludes at the time of application:
(a)That the relevant work in Mr Hoffman's case, following his discharge from the Army in 1980 was potential work as a security guard. However, Mr Hoffman cannot be said to have "performed" or "successfully undertaken" or "effectively undertaken" this work on leaving the Army;
(b)That Mr Hoffman was prevented by his accepted service-related disabilities from undertaking that work;
(c)That, at the time of application, the accepted service-related disabilities were not the only factors preventing him from undertaking that work. Failure to undertake such work at some time over the period 1980 to 2000 were non service-related factors that combined with his service-related disabilities to prevent him from undertaking remunerative work; and
(d)Mr Hoffman has not suffered a real loss of salary, wages or earnings in the factual circumstances of having not "performed" or "successfully undertaken" or "effectively undertaken" remunerative work.
In addition, the Tribunal concludes that the ameliorating provisions of subs 24(1)(c) are not satisfied because:
(i)with respect to s 24(2)(a), factors other than by service-related disabilities have contributed to his ceasing to engage in remunerative work; and
(ii)with respect to s 24(2)(b), Mr Hoffman had not made genuine attempts to engage in remunerative work over the period 1980 to 2000.
For all the above reasons, and having regard to the concession made by the respondent referred to in para 7 of this decision, the Tribunal sets aside the decision under review and in substitution therefor decides that the applicant is entitled to pension at 100% of the General Rate.
I certify that the 56 preceding paragraphs are a true copy of the reasons for the decision herein of Dr E K Christie, Member
Signed:  Sarah Oliver
Associate
Date of Hearing  8 August 2002
Date of Decision  27 September 2002
For the Applicant  Mr A Harding of Counsel
  Gilshenan & Luton, Solicitors
For the Respondent                 Mr J Kelly, Departmental Advocate