House, D.R. v Defence Force Retirement & Deaths Benefits Authority

[1989] FCA 417

JUDGMENT No. .&.!.?..%..EL

IN THE FEDERAL COURT OF AUSTRALIA	)
)
QUEENSLAND DISTRICT REGISTRY	1 QLD. G296 of 1988
)

GENERAL DIVISION 1

BETWEEN:

DAVID RICHARD HOUSE

Applicant

AND :

DEFENCE FORCE RETIREMENT AND

DEATH BENEFITS AUTHORITY

Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:	SPENDER J .
DATE OF ORDER:	28 JULY 1989
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

(1) The appeal be allowed

(2) The matter be referred to the Tribunal for further consideration in accordance with the reasons for judgment.

of the Federal court Rules.

( 3 ) The respondent pay the applicant's costs,

to be taxed if not agreed.

NOTE :  Settlement and entry of orders dealt with by Order 36

IN THE FEDERAL COURT OF AUSTRALIA	)
1
QUEENSLAND DISTRICT REGISTRY	1 QLD. G296 of 1988
1
GENERAL DIVISION	1

BETWEEN:

DAVID RICHARD HOUSE

Applicant

AND :

DEFENCE FORCE RETIREMENT AND

DEATH BENEFITS AUTHORITY

Respondent

SPENDER J.
BRISBANE

28 JULY 1989.

REASONS FOR JUDGMENT

This is an appeal from the Veteransf Appeals Division of

the Administrative Appeals Tribunal which, on 24 June 1988,

affirmed the decision of the Defence Force Retirement and Death

Benefits Authority ("the Authority") of 25 September 1987.

On 11 April 1986, the Authority had resolved:-

"(a) To determine, pursuant to the requirements of Section 30 of the D.F.R.D.B. Act, as amended, that the kinds of civil employment which a person with Mr. House's vocational, trade and professional skills, qualifications and experience might reasonably undertake (disregarding all physical and mental impairments) were Driver, Bicycle Mechanic and Labourer; and

(b) To VARY the delegate's decision by determining that the percentage of Mr. House's incapacity in relation to civil employment was 30% and that his initial classification in accordance with Section 30 of the D.F.R.D.B. Act 1973 was Class B, on and from 30 May, 1975."

Then, on 5 December 1986, that classification was reviewed by a delegate of the Authority, who determined that the applicant's incapacity in relation to civil employment was 20% and his classification was Class C with effect from 16 January 1987. On 30 December 1986, the applicant sought reconsideration of that determination, and on 25 September 1987 the Authority

"(a) To determine that:
alcoholism and
alcoholic liver disease;
constituted the 'prescribed physical or mental'
impairments for the purposes of sub-section 34(B)

of the D.P.R.D.B. Act 1973;

(b) To determine, pursuant to the requirements of

paragraph 34(1A)(b) of the D.F.R.D.B. Act 1973, that the kind of civil employment which a person with Mr. House's vocational, trade and professional skills, qualifications and experience might reasonably undertake (disregarding all physical and mental impairments) was Freezer tIand/Forklift Driver; and

Section 34 of the D.F.R.D.B. Act 1973, that the	(C) to CONFIRM the delegate's decision made under
percentage of Mr. House's incapacity in relation to civil employment was 20% and that he be reclassified as Class C, on/and from 16 January,
1987. 'l

The decision of the Administrative Appeals Tribunal ("the Tribunal") affirming this determination is the subject of this appeal. It lies, pursuant to s.44 of the Administrative Appeals Tribunal Act 1975.

At the hearing before the Tribunal which resulted in the confirmation of the decision of the Authority, Mr. House appeared in person. His major contention before the Tribunal was that, whilst he accepted the medical diagnosis of his condition, the Authority had ignored his potential to be able to obtain employment either as a driver or backhoe operator and that, but for his prescribed impairments of alcoholism and alcoholic liver disease, he would be so employed. The Tribunal expressed the view that the inability of the applicant to qualify as a driver in the army for trade purposes "would not have prevented the applicant from gaining a Queensland C Class driver's licence immediately upon his discharge from the Regular Army."

The Tribunal concluded:-

"Thus it can be said that at the time of his discharge the Applicant did possess the ability to undertake employment as the driver of 'any motor truck other than an articulated vehicle'. This would open up several types of driving employments to him."

Since the determination of the appeal depends on

findings made by the Tribunal concerning Mr. House's capacity to

operate a backhoe and his history in relation to that aspect of	employment qualification, the findings of the Tribunal relevant
to that matter are set out:-

"It is also beyond dispute that the Applicant has on three occasions had his driver's licence suspended due to convictions for driving whilst under the influence of alcohol, and thus it can be stated that his prescribed impairments would have diminished his capacity for undertaking driving tasks.

This is however theoretical. The Applicant never

applied for a Oueensland "C" class driver's
licence so it is little to the point to speculate
on what employment he may have been able to gain

as a driver. As was said by Shepherd J in Freeman

v. D.F.R.D.B. Authority (unreported number-

of 1984) 'a further matter to be observed in relation to Section 34 is that the matter specified in paras (a) and (b) of sub-section (1A) are to be considered as at the date when the authority comes t o the quest ion o f reclassification'. Thus it is the Applicant's incapacity for civilian employment as at the date of the Authority's decision which is the question for the Tribunal, and as at 25 September, 1987 the Applicant had never held a "C" class licence. The question of employment as a driver does not therefore arise.

Similar considerations affect the Applicant's
claim respecting his ability to obtain work as a
back-hoe operator.

Following his discharge from the Army the Applicant was trained and gained a certificate of competency as a back-hoe operator. Shortly after this his driver's licence was suspended as a result of an alcohol related driving offence. It transpires that he was incorrectly informed by a police constable that this suspension of his driver's licence automatically cancelled his plant operator's certificate with respect t o the back-hoe, whereas the correct legal position was and is that the conviction only suspended his right to drive the back-hoe on a public street. In other words the conviction did not affect his plant operator's certificate granted pursuant to the Inspection of Machinery Act 1951-1987 (Queensland) and he still holds that certificate.

Notwithstanding the legal position the incorrect information given to the Applicant had the result

operator and thus his training was in effect	that he never applied for a job as a back-hoe
wasted . He now estimates that it would require a refresher course before he could successfully operate a back-hoe.
In my opinion many factors could influence whether or not the Applicant obtained work as a back-hoe operator. Certainly if, as has occurred on three occasions, the Applicant's driver's licence was suspended through alcohol related offences, he would be unattractive to an employer as he would be prohibited from operating the back-hoe on a public street and thus could not move i t from job to job. At present he is inexperienced in the operation of a back-hoe although he has a certificate of competency. Whether an employer
would employ him or not as a back-hoe operator probably depends on the shortage of experienced back-hoe operators in the employment market and as to this there was before me no evidence whatsoever. The only conclusion possible is to say that the Applicant has a potential to be employed as a back-hoe operator but as to whether that potential would, as at the time under review, have been realised is speculative.''

Section 30(1) of the Defence Force Retirement and Death Benefits Act 1973 provides:-

"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
Sixty per centum or more . . . . . . . . .	A
Thirty per centum or more but less than

sixty per centum . . . . . . . . . B

Less than thirty per centum . . . . . . . C l'

Section 34 provides:-

"(l) 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,

of his incapacity in relation to civil employment.	reclassify him in the appropriate classification set out in section 30 according to the percentage	( 1 A ) In determining, for the purposes of
sub-section (l), the percentage of incapacity in relation to civil employment of a recipient member, the Authority shall have regard to the following matters 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 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 sub-section.
. . .	11

It was submitted by the applicant that the time at which the Tribunal must assess the position of the applicant was the time when the Authority was to consider the question of reclassification: in this case, 25 September 1987. Counsel for the Authority supported this view. Reliance was placed on the observations by Sheppard J. in Freeman v. Defence Force

Retirement Death Benefits Authority (1985) 5 A.A.R.	156 at p. 160
where he said:-

"...It is to be observed that the matters specified

in s.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 sub-section is exhaustive in this regard. It is also to be observed that because of the definition of 'prescribed physical or mental impairmentt in s.34(1B) a member may be reclassified at any time and may be reclassified so that he is found to have either a greater or a lesser degree of incapacity than was previously the case. That is because the definition in s.34(1B) takes one back

cause of the original invalidity or physical or	to the physical or mental impairment that was the
mental incapacity by reason of which the member was retired. It follows that the Authority is always obliged to look at the current capacity of a member and reach a conclusion on the degree to which the original physical or mental impairment which caused his incapacity has diminished his capacity for civil employment. This view of the legislation is supported by what was said by the Tribunal in relation to the similar provisions of 9.53 of the Defence Forces Retirement Benefits Act 1948 (Cth) in Re Bos and Defence Forces Retirement and Death Benefits Authority ( 1 9 7 7 ) j ~ L ~ 3 1 IBrennan J . (President), K.S. Edmunds (senior member) and Dr. M. Glick (member)], namely (at
33) :

'The power which is thus conferred upon the Authority to reclassify the person entitled to benefit is a power which may be exercised as often as the Authority in its discretion determines. The Authority may, therefore, properly perform its function under s.53(1) in a particular case by taking account only of the circumstances present and foreseeable in the immediate future, omi t t ing the circumstances foreseeable only in the long term. That is not to say that the Authority may not, in an appropriate case, have regard to the long-term prospects but it is not bound to do so if it chooses to leave future developments to be reflected by future exercises of the power to reclassify.'

A further matter to be observed in relation to s.34 is that the matters specified in pars (a) and (b) of subs (1A) are to be considered as at the date when the Authority comes to the question of reclassification. That must follow, in my opinion, because the task is to determine the percentage of incapacity 'in relation to civil employment of a recipient memberf. Thus his employment history is looked at at the time of the reclassification, not at the time of the injury which incapacitated him, as is the case under s.30 of the Act.',

I am content to proceed on the basis as contended for the parties, namely, that the relevant date to consider the applicability of s.34(1A) is at the time when the Authority is called upon to consider those matters. Notwithstanding the

observations referred to above, for myself I think there is much	to be said for the view that the question has tg be resolved at
the time the matter is before the Tribunal.
In Re Thomson and Defence Force Retirement and Death Benefits Authority (1987) 6 A.A.R. 424, Davies J. said, at p.430:-

"In determining such incapacity, the Authority is

to have regard to only the matters which are set out in pars (a), (b), (c) and (d) of s.34(1A) of the Act. As McGregor J. said in Defence Force

Retirement and Death Benefits Authority v. - O'Fee

(unreported, Federal Court of Australia, 6 June
1985) :

'The only matters which the respondent (and thus the AAT) may take into account in determinign percentage of incapacity - and 'onlyf those - are set out in s.f3(1A) [s.34(1A)] referred to earlier. They do not include the ageing process or a depressed labour market or a state of unemployment or the shortage of employment for those who might engage in employment.'

However, in having regard to the matters set out in pars (a), (b), (c) and (d) of s.34(1A), it should not be overlooked that the task is to determine 'incapacity in relation t o civil employment'. The effect of s.34(la) is not entirely to change the concept of incapacity in relation to employment but to exclude from consideration a number of matters which might otherwise have relevantly been considered in making the determination."

He later at p. 431 said:-

"If there be no incapacity of the relevant kind, a person's talents - his education, training, skills, physical strength, personality or other attributes - open to him a range of employment opportunities. The range may cover opportunities for engaging in various kinds of employment, for earning various levels of remuneration and for deriving tangible and other benefits. These are

individual - his own range of employment

the opportunities which are appropriate to the

opportunities estimated by reference t o the talents which, but for the incapacity, he would have had. When he suffers an incapacity, some of these opportunities are denied to him. He suffers an incapacity in relation to civil employment. A comparison between the lost opportunities and the whole range of the individual's employment opportunities provides the measure o f his percentage incapacity."

His Honour also adopted the observations of the Tribunal in Re

f

(1977) 1 A.L.D. 31. At p.432, Davies J. said:-

"As the Tribunal said in Re Bos at 35:

'In general, the percentage of incapacity at the time of the determination will be arrived at by ascertaining what the employment talents of the individual would have been at that time but for the incapacity, by considering what employment opportunities would be opened by those talents, by ascertaining what employment opportunities have been lost, and by evaluating the importance of the lost opportunities against the range of opportunities that would otherwise have been opened.'"

In this case the Tribunal held:-

"In considering the employment open to the Applicant relevant considerations are that he has minimal educational qualifications, leaving school at grade 8 and was pre-enlistment variously a bicycle mechanic and a poultry farm worker. He has not worked as a bicycle mechanic since prior to enlistment. Apart from his driver training his Army employment was that of an infantryman.

As stated above it is too speculative to say that at the time the Authority made the decision under review that the Applicant had the vocational skills, qualifications and experience to obtain employment either as a driver or back-hoe operator."

The evidence before the Tribunal was that as at 14 November 1986 Mr. House had been employed as a forklift driver in the freezer section of a warehouse for approximately five years and, at the time of the hearing before the Tribunal in May 1988, he was still employed by that company in the same capacity. The Tribunal concluded:-

"(a) that the prescribed impairments for the
purposes of sub-section 34(1B) of the D.F.R.D.B.
Act 1973 are alcoholism and alcoholic liver
disease.

(b) the kinds of employment which the Applicant

might reasonably undertake are those of a freezer

hand/forklift driver.

(C) that the Applicant's prescribed physical

impairments have diminished his capacity to undertake the relevant kinds of civil employment to the extent of 20X."

The decision under review was thus affirmed.

The omission by the Tribunal of employment as a backhoe operator as one of the kinds of employment the applicant might reasonably undertake was the central issue of the appeal. It was said that the proper application of s.34(lA)(b) required the Tribunal to determine the kinds of employment that a person with the applicant's skills, qualifications and experience might reasonably undertake and that, in the discharge of that obligation, the Tribunal misapplied the statutory test. In particular, the Tribunal was wrong in law when it concluded:-

"It is too speculative to say that at the time the Authority made the decision...that the Applicant had the vocational skills, qualifications and experience to obtain employment either as a driver or backhoe operator."

the Tribunal to advert only to the ability of a person with the	In elaboration of this ground, it was said that s.34(1A) required
applicant's skills, qualifications and experience to undertake a particular kind of employment, and it was therefore erroneous for the Tribunal, as it did in this case, to consider the applicant's prospects of actually obtaining such employment. It was further submitted that s.34(1A) had to be construed in such a way that any diminution of skills, qualifications or experience caused by the physical or mental impairment in question was to be disregarded, and the Tribunal was wrong in considering the applicant's lack of experience in operating a backhoe, which inexperience had resulted from his alcoholism.
For the respondent it was said that in reality the appeal was nothing more than a challenge to a finding of fact, namely:-

'that the calling of back-hoe operator was not one which someone with the applicant's vocational, trade and professional skills, qualifications and experience might reasonably undertake."

It was submitted:-

"What the Tribunal has done is to find that while 'driver1 and 'back-hoe operator1 are kinds of employment that the applicant might. ..undertake, they are not the kinds of employment which he might reasonably undertake."

I accept that the reasons of the Tribunal are not to be addressed in a narrow and critical way.	The reasons are to be
looked at as a whole and the manner of expression of the reasons	is only of importance when on a fair reading of the whole of
those reasons one can regard them as indicating an error of law. Approaching the matter in that light, I am of the view that the Tribunal, in the circumstances of this case, misapplied s.34(1A), and impermissibly considered the prospects of Mr. House in actually obtaining employment as a backhoe operator as being a relevant question in the statutory requirement of s.34(1A). I have earlier set out paragraph 16 of the reasons of the Tribunal. The important sentence for present purposes is the last, which

"The only conclusion possible is to say that the Applicant has a potential to be employed as a back-hoe operator but as to whether that potential would, as at the time under review, have been realised is speculative."

This is to be contrasted with what is said in paragraph

"As stated above it is too speculative to say that at the time the Authority made the decision under review that the Applicant had the vocational skills, qualifications and experience to obtain employment either as a driver or back-hoe

operator. ''

What is identified as speculation by the Tribunal in paragraph 16 is the prospect of whether the potential of Mr. House to be employed as a backhoe operator would in fact have been realised. There is an important distinction in whether a person has the potential or - which may not be precisely the same thing - the capacity to work as a backhoe operator and whether

operator.	that person would in fact obtain employment as a backhoe
For the purposes of satisfying s.34(A), it is sufficient that the civil employment as a backhoe operator is one of the kinds of civil employment which Mr. House, with his vocational trade, professional skills, qualifications and experience, might reasonably undertake. In my view, the Tribunal did not conclude that employment as a backhoe operator was a kind of employment that Mr. House might undertake but that it was not a kind of employment which he might reasonably undertake.
Both parties were of the view that, should I reach the conclusion that the Tribunal, properly applying S. 34(1A) of the Defence Force Retirement and Death Benefits Act 1973 should have concluded that the kinds of employment that Mr. House might reasonably undertake extended to include the employment as a backhoe operator, the proper course was to remit the consideration of the entitlement of Mr. House pursuant to the Act to the Tribunal for further consideration in accordance with that conclusion.
I allow the appeal and refer the matter to the Tribunal for further consideration in accordance with these reasons. The respondent should pay the applicant's costs.

I c r t a : I f h ~ 12 t r u ,J

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ju-~dg~nar~t liorrin cf !-l:$ I Isncur

F2r. Justice Spend-r

Azsocinto

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W e d

Counsel for applicant:  Mr. M. R. Bland

instructed by:  Cannan & Peterson

Counsel for respondent:  Mr. J. A. Logan

instructed by:  Australian Government Solicitor

Date of Hearing:	18 November 1988
Date of Judgment:	28 July 1989