John Sheldon and Repatriation Commission

[2015] AATA 415

[2015] AATA 415

Division	VETERANS’ APPEALS DIVISION
File Number	2012/5145
Re	John Sheldon
APPLICANT
And	Repatriation Commission
RESPONDENT

DECISION

Tribunal	Deputy President PE Hack SC
Date	12 June 2015
Place	Brisbane

The decision under review is set aside and a decision substituted that the applicant is qualified to receive disability pension at the special rate on and from 18 November 2011.

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Deputy President PE Hack SC

CATCHWORDS

VETERANS’ AFFAIRS – veterans’ entitlements – pension – special rate – what type of work may be undertaken with applicant’s skills, qualifications or experience – whether, realistically and practically, a backhoe operator is expected to undertake some manual labour – whether there are other reasons preventing continuing remunerative work.

LEGISLATION

Veterans’ Entitlements Act 1986 (Cth) ss 23, 24(1)(b), 24(1)(c)

CASES

Re Sheldon & Repatriation Commission [2014] AATA 228

Sheldon v Repatriation Commission [2014] FCA 1388

REASONS FOR DECISION

Deputy President PE Hack SC

12 June 2015

1. On 17 April 2014, for the reasons then published,[1] I affirmed a decision of the Repatriation Commission, made on 20 December 2010, that the disability pension payable to Mr John Sheldon be continued at 90% of the General Rate. In so doing, I rejected Mr Sheldon’s claims that he satisfied the criteria to be paid pension at the “special rate”, that is, the rate referred to in s 24 of the Veterans’ Entitlements Act 1986 (Cth), or at the “intermediate rate”, that is, the rate referred to in s 23 of that Act.

   [1]See Re Sheldon & Repatriation Commission [2014] AATA 228.

2. Subsequently, on Mr Sheldon’s appeal, the Federal Court decided that my conclusions had been affected by two legal errors: first, that I had failed to consider Mr Sheldon’s claim that he satisfied the requirements of s 23 of the Act and, second, that I had taken an unduly restrictive approach to, and thereby misconstrued, the expression “remunerative work” as it was used in s 24 of the Act.[2]

   [2]Sheldon v Repatriation Commission [2014] FCA 1388 at [36] and [43].

3. The statutory setting need only be briefly noticed. A veteran qualifies for payment of disability pension at the special rate if each of the criteria in s 24 of the Act is satisfied. The Commission concedes that Mr Sheldon satisfies all but two, those in paragraphs (b) and (c). They provide:

   (1)This section applies to a veteran if:

   …

   (b)the veteran is totally and permanently incapacitated, that is to say, the veteran’s incapacity from war-caused injury or war-caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and

   (c)the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and

   …

   The other question that arises is whether Mr Sheldon satisfies the requirements in s 23 of the Act for pension at the intermediate rate. That section is in terms relevantly identical to s 24 save and except that s 23(1)(b) speaks of a veteran incapable of undertaking remunerative work “otherwise than on a part-time basis or intermittently” rather than “for periods aggregating more than 8 hours per week”.

4. Section 28 of the Act sets out the matters to which regard must be had when considering paragraph (b) of either s 23(1) or 24(1) of the Act. It provides:

   In determining, for the purposes of paragraph 23(1)(b) or 24(1)(b), whether a veteran who is incapacitated from war-caused injury or war-caused disease, or both, is incapable of undertaking remunerative work, and in determining for the purposes of section 24A whether a veteran who is so incapacitated is capable of undertaking remunerative work, the Commission shall have regard to the following matters only:

   (a)the vocational, trade and professional skills, qualifications and experience of the veteran;

   (b) the kinds of remunerative work which a person with the skills, qualifications and experience referred to in paragraph (a) might reasonably undertake; and

   (c)the degree to which the physical or mental impairment of the veteran as a result of the injury or disease, or both, has reduced his or her capacity to undertake the kinds of remunerative work referred to in paragraph (b).

5. Given conclusions I reached in my earlier decision it is not necessary to consider the ameliorating provisions in s 24(2)(b) of the Act.

6. The parties are agreed that the original evidence may be relied upon, supplemented by some additional evidence from each of the parties. It is sufficient for present purposes to repeat the following particular findings of fact from my earlier decision.[3]

   [6]Mr Sheldon was born in 1947. He enlisted in the Australian Regular Army in 1964 and rendered operational service between August 1966 and March 1967. After his discharge from the Army he pursued semi-skilled occupations. In 1974 Mr Sheldon purchased a backhoe and commenced business on his own account. He continued in that business until 1978 when he bought a front-end loader and operated his business using that piece of equipment. Then from 1986 until about July 2009 Mr Sheldon resumed operating his business using a backhoe. At least in the later years, the business was operated by a company, controlled by Mr Sheldon, which acted as the trustee of a discretionary trust. In July 2009 the backhoe and a truck used to transport it were sold it to a company that I shall call Broadwater, controlled by a Mr Moar. Mr Moar was a plumber. Mr Sheldon had undertaken considerable work as a subcontractor for Mr Moar over the previous 23 years and had considerable experience in operating a backhoe in aid of plumbing and drainage works. Part of the overall agreement with Mr Moar was that Mr Sheldon would continue to operate the backhoe for at least 12 months, in effect if not in name, as an employee of the purchaser. He was paid $35 per hour but was not guaranteed any particular number of hours. Mr Sheldon continued in that role until November 2011. He has not worked since because, he says, his back and knees cause him such pain and discomfort that he is unable to do so.

   [7]The Commission produced time sheets compiled by Mr Sheldon in the period from the end of March 2011 to the day when he ceased work in November 2011. They demonstrate that Mr Sheldon was working considerable hours over that period and that, in some weeks, he worked in excess of 35 hours. The average hours worked on the days when work was available was generally in excess of 6 hours and, in one week, as high as 9.5 hours. On more than half of the weeks Mr Sheldon worked in excess of 20 hours and, when he did not work, it appears to have been a consequence of “no work”, “wet” or “work stop”. There is no suggestion in any of the documents that Mr Sheldon was prevented from working by reason of his accepted conditions. Given what the documents demonstrate there can be no suggestion that Mr Sheldon was incapable of undertaking remunerative work on any basis prior to 17 November 2011, that being the last day on which he worked. Thus, whilst the assessment period commences in September 2010, Mr Black, counsel for Mr Sheldon, accepted that the application could not succeed prior to November 2011.

   [3][2014] AATA 228 at [6] – [7]. Footnotes have been omitted.

7. The logical starting point is the issue of remunerative work. I earlier concluded that Mr Sheldon’s skills and qualifications were as a backhoe operator and that his experience was entirely in that area.[4] There was, and is, no challenge to that conclusion; the issue is what tasks a backhoe operator was expected to perform. In dealing with this aspect of my earlier decision, Collier J said this:[5]

   [4][2014] AATA 228 at [16].

   [5]Sheldon v Repatriation Commission [2014] FCA 1388 at [43] – [46].

   [43]Where in my view the Tribunal erred was that, as the applicant has correctly submitted, in its process of reasoning the Tribunal then took an unduly restrictive approach to “remunerative work” for the purposes of considering whether Mr Sheldon’s circumstances satisfied s 23 or s 24. In this respect the Tribunal fell into the type of error described by the Full Court in Butcher at [13], where:

   ... the tribunal paid regard not to the substantive remunerative work that the veteran had undertaken in the past, but to particular tasks performed by the veteran during the course of his employment. The tribunal did not consider, in the general sense required by the subsection, the type of employment undertaken by the veteran but rather the particular duties in which he had been engaged

   (Emphasis added.)

   [44]I also note the comments of the Full Court in Repatriation Commission v Hendy [2002] FCAFC 424 where the Court said at [36]:

   The tribunal’s task was to assess what the veteran probably would have done, if he had none of his service disabilities during the assessment period. The requirement to consider “remunerative work that the veteran was undertaking” does not mean a particular job with a particular employer but the substantive remunerative work that the veteran had undertaken in the past.

   [45]In particular the Tribunal appeared to equate (and confuse) the particular tasks which Mr Sheldon had performed while giving himself restricted duties in his own business, with the more onerous tasks Mr Sheldon was required to perform while employed as a backhoe operator by a third party. The Tribunal did not have regard to the undisputed evidence of Mr Sheldon that, because of changes over the years in the manner in which backhoe operating was performed, the role of backhoe operator usually involved more than merely driving a backhoe (which is the task he was able to perform), and that in the present day the duties of a person employed in backhoe operating also usually included an element of manual labour which with Mr Sheldon had difficulties.

   [46]In this respect while the Tribunal identified Mr Sheldon as a “backhoe operator”, the Tribunal failed to identify the nature of the substantive work which, realistically and practically, was required of persons with the skills, qualifications or experience of someone like Mr Sheldon. I note comments of Rares J in Smith v Repatriation Commission where his Honour observed:

   [17] It is important that a beneficial provision like s 24(1)(c) be construed in a practical way. This is particularly so in today’s world, where forms of work and occupations are subject to constant change as technology eliminates or reduces some occupations and creates new ones. The expression “continuing to undertake remunerative work that the veteran was undertaking” in s 24(1)(c) must be construed in a realistic and practical way so as to avoid underlying technical constraints on its application to a veteran whose income earning capacity has been completely or significantly impaired.

   (Emphasis added.)

8. The task then is to identify the nature of the substantive work which, realistically and practically, was required of persons with the skills, qualifications or experience of someone like Mr Sheldon. Mr Black, counsel for Mr Sheldon, submitted that I should conclude that, at least by 2009, the substantive work of a backhoe operator “realistically and practically” required an element of manual labour and that there had been evolution over time whereby manual labour had become a more significant aspect of the work of a backhoe operator.[6] For the Commission, Ms Brennan of counsel submitted that the evidence did not support a conclusion that the substantive work of a backhoe operator “realistically and practically” involved the performance of general manual labour.[7]

   [6]Applicant’s submissions 26 May 2015, paragraph [9].

   [7]Respondent’s submissions 8 May 2015, paragraph [17].

9. In my view Mr Sheldon’s argument is to be preferred.

10. Mr Sheldon gave this evidence in the Veterans’ Review Board:

    When – when I – basically, it was a machine hire company that I worked for. There was very little requirement to hop off the machine and do the work. But when I sold the machine and went to work with the plumber, he has a requirement. But all the civil – civil people basically force you to do manual labour as well. It’s – it’s – it’s – the whole scene out there is changing all the time. Whereas before you could just operate a machine; they don’t want that any more. You’ve got to be – they call it multi-task, and you have to hop off on the ground. They put a lot of concrete in the front buckets and that. A lot of this is to do with that the excavator has – technology has changed – the excavators come and the backhoes have become the support machines. So once you went into the supporting role instead of the front-line role the physical labour has come in.

    He gave similar evidence in the proceedings before me. Once he became, in effect, the employee of Broadwater he “was expected to help out”.[8] Mr Paul Kuhnemann, a director of a company which engaged Mr Sheldon as a sub-contractor for many years, gave similar evidence,[9] albeit limited to the position with his company and there are letters to similar effect from two other contractors in the material.[10] Mr Sheldon attributed the change to trade unions losing control of work sites and the resulting relaxation of earlier strict practices of demarcation. Once “demarcation went out the back door … you were required to do all sorts of work”.[11]

    [8]Transcript page 9, lines 8 – 9. See also at transcript page 10, lines 27 – 34.

    [9]See Exhibit 11.

    [10]Exhibit 1, pages 324 & 325.

    [11]Transcript page 39, lines 26 – 27.

11. I have no reason to doubt Mr Sheldon’s evidence.

12. The Commission relied on material from the website of Mr Kuhnemann’s company that was said to support the proposition that company facilitated the provision of operator services only, not the provision of backhoe operator providing manual labour as well. The manner in which that company advertised its services does not dissuade me from concluding that, at least by 2009 when Mr Sheldon sold his backhoe and became an employee, there was an expectation that a backhoe operator would, where necessary, leave the machine and provide limited manual labour. The same is true of the description of the role of backhoe operator in the Australian and New Zealand Standard Classification of Occupations, relied on by the Commission.

13. I am then satisfied that, at least by 2009, the substantive work of a backhoe operator “realistically and practically” required an element of manual labour. Mr Sheldon was, perhaps fortunate that for a period of time he was frequently able to limit the role he actually performed to that of operating the machine but I am satisfied that by November 2011 he was expected, as a backhoe operator, to undertake manual labour on occasions. That being so, I understand the Commission to concede that Mr Sheldon’s war-caused injuries alone prevented him from continuing in such employment subsequent to November 2011. The concession is undoubtedly justified. It appears from the material that the date of effect ought be 18 November 2011, that being the first working day during the assessment period when it could be said that Mr Sheldon satisfied each of the criteria in s 24 of the Act.

14. The result is that the decision under review will be set aside and a decision substituted that Mr Sheldon was qualified to receive disability pension at the special rate on and from 18 November 2011.

I certify that the preceding 14 (fourteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President PE Hack SC

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Associate

Dated 12 June 2015

Date of hearing	1 June 2015
Counsel for the Applicant	Mr M Black
Solicitors for the Applicant	KCI Lawyers
Counsel for the Respondent	Ms M Brennan
Solicitors for the Respondent	Australian Government Solicitor