JOHNSON and REPATRIATION COMMISSION
[2010] AATA 706
•16 September 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 706
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/1319
VETERANS' APPEALS DIVISION ) Re IAN JOHNSON Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Mr R G Kenny, Senior Member Date16 September 2010
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
..............[Sgd]................................
Senior Member
CATCHWORDS
VETERANS’ AFFAIRS – Veterans’ entitlements – Veteran in receipt of 100% general rate pension – Veteran not able to undertake remunerative work for more than 8 hours per week because of service-related conditions – Veteran not prevented from undertaking remunerative work that he was undertaking because of war-caused conditions alone – Special rate of pension not payable - Intermediate rate of pension not payable - Decision affirmed
Safety, Compensation and Rehabilitation Act 1988 (Cth)
Veterans’ Entitlements Act 1986 (Cth) ss 5Q, 14, 19, 22, 23, 24, 70, 119, 120
Flentjar v Repatriation Commission (1997) 26 AAR 93, (1997) 48 ALD 1
Forbes v Repatriation Commission (2000) 101 FCR 50
Jebb v Repatriation Commission (1988) 80 ALR 329
Leane v Repatriation Commission (2004) 81 ALD 625
Magill v Repatriation Commission [2002] FCA 744
Peacock v Repatriation Commission [2004] FCA 1449
Repatriation Commission v Boyle (1997) 47 ALD 637
Repatriation Commission v Hendy (2002) 76 ALD 47
Repatriation Commission v Van Heteren (2003) 75 ALD 703
Van Ewijk v Repatriation Commission [2004] FCA 17REASONS FOR DECISION
16 September 2010 Mr R G Kenny, Senior Member BACKGROUND
1. On 19 February 2008, the Tribunal determined that Ian Johnson suffered from generalised anxiety disorder, depressive disorder and cardiomyopathy and that these were defence-caused, in accordance with s 70 of the Veterans’ Entitlements Act 1986 (Cth) (“the Act”), with effect from 12 February 2003. His initial claim for acceptance of those conditions was lodged, under s 14 of the Act, on 12 May 2003. The Tribunal remitted the matter of assessment to the respondent. On 6 June 2008, a delegate of the respondent assessed Mr Johnson’s incapacity from the conditions noted above as well as from bilateral sensori neural hearing loss. The delegate increased the rate of his disability pension, paid under s 22 of the Act, to 100% of the general rate with effect from 12 February 2003. On 22 January 2010, the Veterans’ Review Board (“the Board”) affirmed that decision. In so determining, the delegate and the Board were satisfied that Mr Johnson did not qualify for the intermediate or the special rate of pension under s 23 or s 24 of the Act, respectively.
ISSUES AND LEGISLATION
2. Matters in issue for assessment are determined to the Tribunal’s reasonable satisfaction and in accordance with substantial justice and the substantial merits of the case[1]. In that process, neither party bears an onus of proof[2]. The procedure to be followed is provided for in s 19 of the Act. It requires the rate of pension to be assessed from time to time during the assessment period[3] which is defined as starting on the application day and ending when the claim or application is determined[4]. It is not disputed that the application day in this case was 12 May 2003 or that the assessment period runs from that day until the matter is determined.
[1] See s 120(4) and s 119(1) of the Act, respectively.
[2] See s 120(6) of the Act.
[3] See s 19(5C) of the Act.
[4] See s 19(9) of the Act.
3. No challenge is made by Mr Johnson to the general rate of pension paid to him at 100%. The issue raised is whether he meets the criteria for payment of the special rate of pension under s 24 of the Act. It is not in dispute that Mr Johnson was under 65 years of age at the time of his claim or that he is in receipt of pension at a rate greater than 70% of the general rate. Therefore, he meets the preliminary requirements of s 24(1)(aa), (aab) and (a)(i) of the Act for the special rate. Further, it was conceded by Mr Terry Thrupp, for the respondent, that the incapacity component in s 24(1)(b) of the Act has been met at all material times. This is that, at the start of and during the assessment period, Mr Johnson was totally and permanently incapacitated in that his incapacity from his accepted disabilities was, of itself alone, of such a nature as to render him incapable of undertaking remunerative work for periods aggregating more than 8 hours per week. The remaining component of the provision is s 24(1)(c) of the Act. This comprises two limbs which require that Mr Johnson:
is, by reason of incapacity from his accepted disabilities alone, prevented from continuing to undertake remunerative work that he was undertaking (first limb);
is, by reason thereof, suffering a loss of salary or wages, or of earnings on his own account, that he would not be suffering if he were free of that incapacity (second limb).
4. The first limb is qualified by the terms of s 24(2)(b) of the Act which reads[5]:
(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.
[5] Magill v Repatriation Commission [2002] FCA 744 at [11] and Forbes v Repatriation Commission (2000) 101 FCR 50 at [52].
5. The second limb is qualified by s 24(2)(a) of the Act which reads[6]:
(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, by reason 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;
[6] Ibid.
6. The issue for determination is whether Mr Johnson’s circumstances meet the requirements in s 24(1)(c) of the Act.
EVIDENCE
7. After serving in the Royal Australian Navy from 1958 until 1979, Mr Johnson worked in a range of occupations in private enterprise and with the Western Australian government. From 1992 until 1996 he worked as an electrician with the Department of Defence (“the Department”) in Geraldton, Western Australia. In 1996, he secured a promotion to a position as a signals analyst in Geraldton. This appointment was for three years and was described as a “term transfer” position. Mr Johnson was advised that the transfer aspect would be enforced but he was unable to obtain any information about any such transfers in the past. On 4 August 1999, Mr Johnson was granted a 12 month extension to his position. At the time, he advised the Department that he was unwilling to move from Geraldton because of his wife’s ill health.
8. On 24 July 2000, the Department sent a letter to Mr Johnson advising him that his extension was to expire in November 2000 and providing him with transfer options. Having received no response from Mr Johnson, the Department, on 27 September 2000, advised him that it was intended to transfer him to Canberra and that his replacement had already taken up his position. At that stage, Mr Johnson was on sick leave. On 28 September 2000, Mr Johnson lodged a claim under Commonwealth workers compensation legislation[7] for acceptance of adjustment disorder with depressed mood. Comcare rejected that claim on 21 December 2001[8], noting reports, dated 21 October 2000, 2 November 2000 and 25 November 2000, from his treating psychiatrist, Dr Stephen Proud, stating that Mr Johnson suffered from adjustment disorder with depressed mood stemming from the demand that he transfer from Geraldton and that this would be most likely alleviated if he was given assurance that such a transfer were not forced on him.
[7] Safety, Compensation and Rehabilitation Act 1988 (Cth).
[8] This determination was affirmed in a reviewable decision on 27 March 2001.
9. Mr Johnson was certified as being medically unfit for work from 9 August 2000 to 31 August 2000 and from 2 October 2000 until 2 November 2000 by his general practitioner, Dr Francis, and from then until 12 January 2001 by Dr Proud. After his sick leave entitlements had been expended, Mr Johnson received income support payments under a policy of insurance with MLC. This was from 18 January 2001 until 10 July 2002 when MLC brought his payments to an end with a lump sum payment of $8,000. During that time, on 30 October 2001, the Department advised Mr Johnson that his position was terminated with effect from 2 November 2001 on the ground of non-performance of his duties.
10. On 25 September 2001, psychiatrist Dr Paul Skerritt reported that he had seen Mr Johnson who advised that he was to be transferred to Canberra and that this had caused him to “flip” because of the need for his wife to have treatment in Perth. Dr Skerritt wrote that Mr Johnson had experienced a decline in work capacity from May 1999 until August 2000 when he “ground to a standstill”, lacking in motivation, experiencing lack of concentration, losing memory, worrying about everything and suffering sleep loss. Dr Skerritt diagnosed major depressive disorder. He considered that there had been little improvement in his symptoms since he had seen Dr Proud. He also wrote that Mr Johnson was limited in doing any work at that time even though he was motivated to return to work. Dr Skerritt’s opinion was that return to work would prove very difficult for Mr Johnson for various reasons including his age.
11. After his dismissal from employment from November 2001, Mr Johnson commenced a claim against the Department for unfair dismissal. He found his union representative to be of no assistance to him as he would not submit material to the Department, missed deadlines and was difficult to contact. He abandoned his claim on 29 May 2002.
12. Mr Johnson was advised by his general practitioner in mid January 2002 that he had a heart problem. An echo cardiogram was conducted on 26 January 2002. He was admitted to hospital on 12 February 2002 and was transferred to Perth where he was placed in the critical care cardiac unit. He was diagnosed with cardiomyopathy by Dr Geoffrey Cope, from Perth Cardiovascular Institute. After two weeks in Perth, Mr Johnson returned to Geraldton. Dr Cope, in his report dated 28 July 2003, confirmed a diagnosis of cardiomyopathy and reported that the condition had stabilised at that time. The diagnosis in 2002 was the first reference that Mr Johnson could recall to the condition although he learned subsequently that a mild form of the condition had been noted in his RAN records in 1978. In a report, dated 16 March 2007, Dr Cope noted the 1978 reference in Mr Johnson’s RAN records and said that it was likely this was a mild condition at that time.
13. On 16 August 2002, shortly after his MLC payments ceased, Mr Johnson applied for Centrelink benefits. His treating doctor, Dr Francis, completed a report on 2 July 2002 in relation to that claim. The medical condition identified by Dr Francis was cardiac failure and his opinion was that Mr Johnson was unfit for work for at least 2 years. An examination on 16 August 2002 by Dr C F Quadros resulted in a report that Mr Johnson had an exercise tolerance of 4-5 Mets and was unfit for work for the next two years. Dr Quadros noted that Mr Johnson also suffered from depression which had not been noted by his treating doctor’s report. His opinion of Mr Johnson’s work capacity was based on the effects of his heart condition and stress. In a medical assessment in April 2008, Dr Francis assessed Mr Johnson as being symptomatic at 2-3 Mets.
14. Centrelink granted Mr Johnson the disability support pension. Mr Johnson did not register for employment with Centrelink at that time. He said that he believed that to do so would have been inconsistent with his wrongful dismissal claim. He had seen advertisements from the employer to undertake the work that he had been doing previously and had hoped to be reengaged for employment.
15. In a report, dated 2 July 2003, Dr Proud wrote that he had treated Mr Johnson from 12 October 2000 until 20 June 2003 and had noted an increase in Mr Johnson’s psychiatric symptoms due to an altercation with his employer over his refusal to transfer from Geraldton because of his wife’s psychiatric condition. He also described a stabilization of his cardiomyopathy because of medication. Dr Proud completed a medical assessment on Mr Johnson on 16 April 2008 writing that he was too tense and exhausted to work an 8 hour day. On 4 December 2008, Dr Proud wrote that he had carefully reviewed his notes at the end of 2001 and the beginning of 2002. His opinion was that, between 5 November 2001 and 4 January 2002, Mr Johnson’s depression and anxiety was such that he would have been incapable of working in his normal position with the Department. He attributed this to industrial, legal and financial issues. He also noted the onset of cardiomyopathy in 2002 and wrote that, from then on, his inability to work was mostly related to cardiac rather than psychiatric issues.
16. On 11 September 2008, a Departmental officer requested, from a Departmental Medical Officer, an opinion on the extent of the effect of Mr Johnson’s heart condition. In reply on 12 September 2008, Dr Johan Yin, wrote that Mr Johnson’s shortness of breath was entirely due to his cardiomyopathy. He described it as having an inexorably downhill course. He noted the presence of diabetes in Mr Johnson but said that this was well controlled. Dr Yin’s opinion was that, ultimately and it could be in the near future, he will experience permanent cardiac failure when his present controlling medication will be of no avail. He described Mr Johnson’s heart condition as a serious one and described its effects on Mr Johnson as “profound”.
17. Mr Johnson’s wife ceased full-time work in 1994 because of depressive disorder. In a report, dated 25 May 1999, Dr Nick De Felice advised that Mrs Johnson was unfit for relocation from Geraldton because of her psychological state. On 27 October 2000, he again advised that a transfer for Mr Johnson would be adverse to his wife’s health. In the late 1990s, Mrs Johnson operated a bed and breakfast business. In part, this was to assist her in having something to do and to meet people. Mr Johnson provided minimal assistance with the business such as answering the phone when his wife was away or by running errands such as doing the shopping. Mrs Johnson continued the bed and breakfast business until 2002 after which time she was involved in caring for Mr Johnson. She again started the bed and breakfast business in 2007 when Mr Johnson’s health had improved and, again, Mr Johnson did basic errands to assist his wife.
SUBMISSIONS
18. Terry Thrupp, for the respondent, submitted that Mr Johnson did not meet the requirements of s 24(1)(c) of the Act. He submitted that Mr Johnson’s employment ceased because of his refusal to transfer from Geraldton and was unrelated to his accepted disabilities. He submitted that, as it was not his accepted disabilities alone which prevented him from continuing to undertake remunerative work, the qualification in s 24(2)(a) of the Act precluded him from satisfying the requirements for the special rate of pension[9]. He also submitted that there had been no attempts by Mr Johnson to reengage in remunerative work after his dismissal from the Department and that the ameliorating terms of s 24(2)(b) of the Act were not applicable to him[10].
[9] Reference was made to Magill v Repatriation Commission [2002] FCA 744 and Peacock v Repatriation Commission [2004] FCA 1449.
[10] Relying on Repatriation Commission v Hendy (2002) 76 ALD 47 at 54-55; Repatriation Commission v Boyle (1997) 47 ALD 637 and Van Ewijk v Repatriation Commission [2004] FCA 17.
19. Helena Smith, for the applicant, submitted that the requirements of s 24(1)(c) of the Act were met by Mr Johnson. She submitted that there was no evidence of any non-accepted disabilities affecting Mr Johnson at the time that he ceased work. She submitted that he was prevented from continuing employment because of his psychiatric conditions and, subsequently, by his heart condition. She submitted that Mr Johnson had not registered for employment with Centrelink because this may have been detrimental to his unfair dismissal claim against the employer. She submitted that the unfair dismissal claim was, in itself, evidence that Mr Johnson was genuinely seeking remunerative work after his position had been terminated by the Department. She also submitted that there had been a loss of income by Mr Johnson after his position was terminated and also while he was receiving the MLC payments which were substantially less that his usual income.
CONSIDERATION
20. As noted above, Mr Thrupp conceded that Mr Johnson meets the requirements of s 24(1)(aa), (aab) and (a)(i) of the Act. The material before me is that a claim under s 14 of the Act has been made; that Mr Johnson, born in 1942, was aged under 65 at the start of the assessment period; and that his degree of incapacity is in excess of 70%. Mr Thrupp also conceded that s 24(1)(b) is met as at the start of and during the assessment period. In reports that were completed during the assessment period, Dr Proud and Dr Francis wrote that Mr Johnson is not able to undertake remunerative work. I am satisfied that Mr Thrupp’s concessions have been properly made.
21. The Federal Court in Flentjar v Repatriation Commission[11] said that a proper application of s 24(1)(c) of the Act requires consideration of the following questions:
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?
[11](1997) 26 AAR 93.
Step 1:
22. The term remunerative work is defined in the Act to include any remunerative activity[12]. It is not disputed and I am satisfied that the remunerative work that Mr Johnson was undertaking, relevant to his application, was as a systems analyst and/or as an electrical fitter. Neither Mr Thrupp nor Ms Smith placed any reliance on the minimal amount of involvement by Mr Johnson in his wife’s bed and breakfast activities.
[12] See s 5Q of the Act.
Step 2:
23. I am satisfied that, throughout the assessment period, Mr Johnson’s accepted disabilities have been sufficient to prevent him from continuing to undertake the relevant remunerative work. Accordingly, the second of the Flentjar questions is answered “yes”. This was conceded by Mr Thrupp.
Step 3:
24. The third of the Flentjar questions in Mr Johnson’s situation is whether accepted disabilities were the only factors preventing him from continuing to undertake work as at the start of and during the assessment period[13].
[13] Jebb v Repatriation Commission (1988) 80 ALR 329 at [337].
25. Mr Johnson formally ceased work on 2 November 2001. There is evidence that his psychiatric state was impacting to some extent upon his work capacity at that time. On 4 December 2008, Dr Proud wrote that, between 5 November 2001 and 4 January 2002, Mr Johnson’s depression and anxiety was such that he would have been incapable of working in his normal position with the Department. Although that report was made some years after Mr Johnson ceased work, it is broadly consistent with Dr Proud’s report of 2 July 2003. There, he wrote that he had treated Mr Johnson from 2000 until 2003 and had noted an increase in Mr Johnson’s psychiatric symptoms. On 25 September 2001, Dr Skerritt diagnosed major depressive disorder, noting a decline in Mr Johnson’s work capacity from May 1999 until August 2000 when he “ground to a standstill”, and considered that Mr Johnson was limited in his ability to work at that time. Mr Johnson was on sick leave until January 2001 and then on MLC payments until July 2002.
26. There is no suggestion in the evidence of Dr Proud and Dr Skerritt in 2001 to 2003 that Mr Johnson’s psychiatric condition was related to his RAN service. Indeed, they attributed it to his transfer dispute with the Department. However, as noted above, generalised anxiety disorder and depressive disorder have now been accepted as being related to Mr Johnson’s defence service. After ceasing work, Mr Johnson experienced the onset of cardiomyopathy in February 2002. There is no evidence that it played any part in his ceasing work in 2001. The condition was diagnosed in February 2002 by Dr Cope and it, too, is now accepted as being related to Mr Johnson’s defence service.
27. While I accept that Mr Johnson’s psychiatric conditions had some impact on his work capacity in 2001, I am reasonably satisfied that the overwhelming reason for Mr Johnson’s cessation of work was unrelated to his health. His refusal to accept a transfer was related to his unwillingness to leave Geraldton due to the health of his wife. It was this unwillingness to accept a transfer which led to his dismissal. Accordingly, accepted disabilities were not the only reason for Mr Johnson ceasing work in November 2001[14].
[14] Repatriation Commission v Hendy (2002) 76 ALD 47 at [54-55] and Repatriation Commission v Van Heteren (2003) 75 ALD 703 at [708-709].
28. There is evidence that Mr Johnson has suffered diabetes during the assessment period. However, on 12 September 2008, Dr Yin wrote that this was well controlled and that Mr Johnson’s breathlessness was entirely due to his cardiomyopathy which he described as having a “profound” effect on Mr Johnson. At the beginning of the assessment period, Mr Johnson had been out of remunerative work for almost 18 months. His actual involvement in the work place ended before 9 August 2000 when he commenced sick leave. He did not return to remunerative work and, accordingly was out of actual work for more than two years at the beginning of the assessment period. At his age, I am satisfied that this absence from the workforce would also have been a factor which would have impacted on his capacity to obtain remunerative work. In that regard, I have noted Dr Skerritt’s opinion in September 2003 that return to work would prove very difficult for Mr Johnson for various reasons including his age. I am satisfied that Mr Johnson’s accepted disabilities were not the only factor or factors preventing him from continuing to undertake the relevant remunerative work at the start of or during the assessment period.
29. While that points to a negative response for step 3, as identified above, consideration must be given to s 24(2)(b) of the Act. This may ameliorate the operation of s 24(1)(c) of the Act if, during the assessment period, Mr Johnson was genuinely seeking to engage in remunerative work but was unsuccessful substantially because of his accepted disabilities. It also applies where accepted disabilities have prevented him from genuinely seeking to engage in remunerative work[15]. It has been conceded that Mr Johnson has not made any attempts to become engaged in remunerative work after he was dismissed from the Department. Mr Johnson has relied on his wrongful dismissal claim against the Department to satisfy the requirement that he was genuinely seeking to engage in remunerative work. I do not accept that contention. Even if this had been successful, there is no guarantee that a favourable outcome would have been a return to work as opposed to some form of compensation payment. In any event, he had abandoned the claim in May 2002 which was before the assessment period commenced. Mr Johnson received disability support pension from Centrelink from August 2002. As I understand it, he made a claim for that form of payment. His evidence was that he did not register for unemployment benefits because it may have jeopardised his wrongful dismissal claim. However, his abandonment of that claim predated his claim for the disability support pension and I do not accept that this was the reason for not seeking some form of Centrelink benefit associated with obtaining work.
[15] See Magill v Repatriation Commission [2002] FCA 744 at [11].
30. Mr Johnson was not “looking out”[16] for work to be engaged in at any time after November 2001. This means that he was not genuinely seeking to engage in remunerative work after that time and, accordingly, not in the assessment period. The third of the Flentjar questions is answered in the negative.
[16] Leane v Repatriation Commission (2004) 81 ALD 625 at [632-633].
Step 4:
31. Ms Smith contended that Mr Johnson suffered a loss of salary for the period he received income support payments from MLC and also because of his dismissal. While I accept that to be the case, I have determined that Mr Johnson ceased to engage in remunerative work for reasons other than his incapacity from accepted disabilities. In that situation, in accordance with s 24(2)(a) of the Act, he is not taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity[17]. This means that Mr Johnson does not meet the requirements in step 4.
[17] Repatriation Commission v Van Heteren (2003) 75 ALD 703 at [709].
DECISION
32. For the reasons given, s 24(1)(c) of the Act is not met and the special rate of pension is not payable to Mr Johnson. The intermediate rate of pension is provided for in s 23 of the Act. The terms of s 23(1)(c) of the Act are identical to those of s 24(1)(c) thereof. For the reasons given above, s 23(1)(c) of the Act is not met and the intermediate rate of pension is not payable to the applicant.
33. The decision under review is affirmed.
I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member
Signed: .....................[Sgd]........................................................
Kate Slack, Research AssociateDate/s of Hearing 30 August 2010
Date of Decision 16 September 2010
Applicant was represented by Helena Smith, Advocate
Respondent was represented by Terry Thrupp, Advocate
0
11
0