Johnston and Repatriation Commission

[2004] AATA 1042

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1042

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2004/379

VETERANS' APPEALS DIVISION		)
Re		JEFFREY JOHNSTON

Applicant

And REPATRIATION COMMISSION

Respondent

DECISION

Tribunal Dr EK Christie, Member

Date24 September 2004  

PlaceBrisbane

Decision The Tribunal affirms the decision under review. This means Mr Johnston’s application for review is unsuccessful. The Tribunal raises the possibility of an Act of Grace payment in the factual circumstances.

...................(Sgd)...................

EK Christie
  Member

CATCHWORDS

VETERANS’ AFFAIRS – veterans’ entitlements – loss of earning allowance – loss of salary or wages and disease – renal failure – Statement of Principles not issued – exposure to aviation fuel – changing scientific knowledge and connection between renal failure and service – whether legislative outcome unintended – Act of Grace payment – statutory interpretation: sequence of provisions

Re Payne and Repatriation Commission (1989) 10 AAR 207
Patman v Fletcher’s Fotographics Pty Ltd (1984) 6 IR 471
Jackman v Repatriation Commission [1997] FCA 564

WRITTEN REASONS FOR ORAL DECISION

6 October 2004   Dr EK Christie, Member     

1.      This is an application by Jeffery Johnston for a review of a decision made by the Veterans’ Review Board (“the VRB”) made on 19 March 2004 in relation to his eligibility for loss of earnings allowance (“LOE”).  An oral decision in relation to this application for review was given on 24 September 2004 at the conclusion of the hearing.  The written reasons for this oral decision follow.

2.      At the hearing on 24 September 2004, Jeffery Johnston represented himself.  The respondent was represented by Mr J Kelly, a Departmental Advocate.

3. At the hearing the Tribunal had in evidence before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” Documents, Exhibit 1).

4.      The general facts were not in dispute and may be stated briefly.  Mr Johnston is now aged 43.  Mr Johnston enlisted in the Royal Australian Navy in January 1977 as a helicopter electrical engineer and was discharged in January 1983.  This period constitutes “eligible service”.  His service in the RAN from January 1977 to January 1983 was with 723 Squadron on HMAS Albatross.

5.      Mr Johnston worked as a helicopter engineer involved in online refuelling and was exposed to aviation fuel splash, as well as aviation solvents and aviation exhaust.

6.      Mr Johnston lodged a claim for “renal failure end stage” on 26 September 2002.  The Repatriation Commission accepts that the diagnosis of “renal failure” is an appropriate medical diagnosis.

7.      In its reasons for decision, the Repatriation Commission concluded (15 July 2003):

“Under the Act, where there is eligible service, I can only accept the claim if I am satisfied on the balance of probabilities that the claimed condition is related to that service. The Repatriation Medical Authority issues Statements of Principles for particular conditions stating which factors must exist for a connection to service to be probable. In relation to Mr Johnston’s claim for renal failure, the available evidence includes the veteran’s service records and his claim. The Repatriation Medical Authority has not yet issued a Statement of Principles for this condition. My decision is based on the evidence available to me. In investigating this claim I have referred to various medical reports and opinions from Dr S Chowdhury, Renal Physician and Dr R King, Consultant Physician and information provided by the Department of Defence. I am therefore satisfied that Mr Johnston’s renal failure is related to his service.” (T9, Folio 36)

8.      Mr Johnston lodged his application for loss of earnings allowance on 15 August 2003.

9.      Mr Johnston’s medical conditions of “Hepatitis B” and “renal failure” were both accepted as “service related disabilities” on 26 July 2002.

The Issues to be Decided

10.     During the hearing, Mr Johnston conceded that he was not entitled to loss of earnings allowance during the period 15 August 2002 to 15 August 2003, as he received Special Rate entitlement during this time.

11.     Accordingly, the only periods Mr Johnston sought loss of earnings were for the following discrete periods:

(1)       1983 – 1984

(2)       1988 – 1989

(3)       1992 – 1994

(4)       1995 – 1997

Statutory Requirements and Case Law

“Loss of earnings allowance is paid to cover loss of earnings suffered by a veteran because of treatment or investigations of claims.  The amount payable is:

The lesser of the actual loss or the special pension rate.  In combination with the travelling allowance, loss of earnings allowance provides a package of financial assistance.  The two allowances permit the reimbursement of the costs of travel,  accommodation and meals and compensate for loss of earnings.  They also cover the costs of any person other than the veteran (e.g. a carer) who has to travel or take time off work to attend hearings (other than those of the VRB) or to make claims or to undergo treatment or a medical examination in connection with war-caused disabilities.”

12.     The Veterans’ Entitlements Act 1986 (“the Act”) contains the following provisions that are relevant to Mr Johnston’s application for review:

“Section 108 Loss of earnings allowance

(1)       The Commission may grant an allowance, called loss of earnings allowance, to a person in accordance with the provisions of this section.

(2)       Loss of earnings allowance may be granted to a veteran, in respect of any loss of salary or wages, or loss of earnings on his or her own account from an occupation in which he or she is engaged, suffered by reason of:

(a)the veteran’s undergoing treatment for incapacity from a war-caused injury or a war-caused disease;

…

(c)an investigation of a claim or application made by the veteran under Part II or of a pension granted to the veteran under that Part; or

(d)the veteran’s undergoing treatment associated with such an investigation;

…

for the period in respect of which the veteran suffered that loss.”

Section 108(7) prohibits payment of LOE for any period that the person is receiving a pension at the rate specified under section 24(4), that is, at the Special Rate:

“(7)      Loss of earnings allowance is not payable to a person under this section in respect of any period in respect of which the person is paid pension under Part II at the rate specified in subsection 24(4).”

Also relevant is section 112, which provides:

“Section 112 Time for applying for certain benefits

(1)       …

(2)       An application for loss of earnings allowance for a period in respect of which a person has suffered a loss of salary or wages or loss of earnings on his or her own account, as set out in subsection 108(2), (3), (4) or (5), shall be made within 12 months after the commencement of that period. …”

13.     In relation to the interpretation of subsection 108(2)(a), the Tribunal, in Re Payne and Repatriation Commission (1989) 10 AAR 207, proceeded to determine the case because the applicant’s medical condition had been “accepted as defence related and thus attracts eligibility under not only the disability provisions of the Act but also those relating to allowances”. This factor is a significant distinction with respect to Mr Johnston’s claim over the period 1983-1994.

14. The Tribunal notes that the interpretation of different provisions of the Act arise in deciding this application for review. The following legal principle is relevant in Mr Johnston’s case. In Patman v Fletcher’s Fotographics Pty Ltd (1984) 6 IR 471 (NSW Court of Appeal) Priestley J concluded that, in interpreting a number of provisions in a statute:

“…I see no reason why the [statute] should not be read in the ordinary way in which a document is read, that is, from the beginning onwards.  In the ordinary course of reading, s 4, although of course it must be read with both what preceeds [sic] it and follows it, must be read after s 3 and further, in the ordinary course it seems to me that it must be read in the light of s 3.  It is preposterous, in the literal sense, to read s 4, make assumptions concerning its purpose based on its language, without reference to what has preceded it, and then to read s 3 in the light of the purpose thus discerned in s 4.  A much sounder way of reaching what the draftsman’s purpose was, is to read his Act in the sequence in which he wrote it.”

15.     In relation to the eligibility to the LOE the standard of proof is that of “reasonable satisfaction”.  The requirements for proof in accordance with respect to the standard of the reasonable satisfaction of the Tribunal, have been considered in a number of cases. As Tamberlin J noted in Jackman v Repatriation Commission [1997] FCA 564:

“The AAT had to determine, to its reasonable satisfaction… 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’.”

Contentions and Submissions of the Parties

16.     Mr Johnston stated that his service caused disease had resulted in loss of earnings during the following discrete periods.  In turn, that he was entitled to LOE during these periods:

Period	Previous Employment in Occupation in which Engaged	Wage $	Medical Condition
1983 to 1984	AWA	28,000 pa	Liver Damage
1988 to 1989	ASX	40,000 pa	Liver Damage
1992 to 1994	Skillshare	32,000 pa	Kidney Damage
1995 to 1997	Gravity J Consulting	45,000 pa	Kidney Damage

17.     Mr Johnston submitted the following propositions to support the above statement:

(a)that section 108(2) of the Act stated that LOE is granted “for the period in which the veteran suffered that loss” and was not restricted to some [12 month] period;

(b)that any omission to recognise that the legislation extended LOE entitlements beyond some finite period would only lead to prejudicial outcomes for veterans;

(c)that section 112(2) of the Act distinguished between employment on his own account and self employment. Accordingly, he would be entitled to wages lost whilst employed (with AWA, ASX or Skillshare), or earnings lost whilst self-employed with (Gravity J Consulting) or both; and

(d)that the provisions of section 108(2)(a) should be applied literally to the facts of his application for review.

18. Mr Johnston expressed concerns that he was not provided with any opportunity to rebut expert or medical evidence contained in the “T” Documents. However, the Tribunal considered the concerns raised by Mr Johnston in relation to rebuttal of expert and medical evidence before the Tribunal, but emphasises to Mr Johnston these issues were not directly applicable to the administrative decision that must be made under subsections 108(2)(a), 108(7) and 112(2) of the Act.

19.     Mr Kelly, for the respondent, submitted that the statute provided no discretion to vary the decision under review. The statutory provisions needed to be read in conjunction with one another - and not as separate provisions. In Mr Johnston’s circumstances, he submitted that the relevant facts were that:

§  Mr Johnston’s renal failure became an accepted disability from 26 June 2002;

§  his application for LOE was made on 15 August 2003; and

§  he received Special Rate pension from 15 August 2002 to 15 August 2003.

20. As a consequence of these dates, and the operation of subsections 108(2)(a) of the Act, Mr Johnston would only be entitled to LOE for the 12 month period 15 August 2002 to 15 August 2003. However, section 108(7) and section 112(2) then applied with the result that Mr Johnston was disentitled to LOE payments.

Consideration of the Issues

21.     The question for determination of the Tribunal when conducting an application for review is whether the decision under review was the correct (that is, where there is only one decision possible) or the preferable (that is, where there is more than one decision possible) one on the material before the Tribunal: see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 (Full Federal Court). The legislation is the only basis for the review of this administrative decision for entitlement to LOE. Administrative decision-makers are not permitted to depart from the law. The Tribunal must make its decision on the merits of the case – but in accordance with the legal requirements imposed by the Act, together with the relevant legal principles that arise from decisions made by our Courts.

22.     In terms of the question of statutory interpretation and the application of subsection 108(2)(a), 108(7) and 112(2), the Tribunal must apply the reasoning in Patman’s case. That is section 108 cannot be read literally and assumptions then made about its purpose based on its language – without any reference to section 112: or to read section 112 in the light of the purpose defined in section 108. Rather, the drafter’s purpose would be reached by reading the Act in the sequence the drafter wrote it.

23.     This means that the relevant period of consideration for LOE in Mr Johnston’s application for review of LOE is:

(a)after his renal failure became an accepted service disability, that is after 26 June 2002 [subsection 108(2)(a)]; and

(b)in the 12 month period preceding the lodging of his application for LOE on 15 September 2003 [section 112(2)].

24.     Because Mr Johnston received Special Rate over the period 15 August 2002 to 15 August 2003, he is precluded from LOE entitlements over this 12 month period [section 108(7)].

25. Because Mr Johnston’s renal failure was not an accepted service disability over the period 1983-1984, 1988-1989, 1992-1994 and 1995-1997, the operation of section 108(2)(a) precludes him from entitlement to LOE over any of these four periods.

26.     As a result of these conclusions, and applying the legislation, the Tribunal can make no finding other than to find that Mr Johnston is not entitled to LOE over any of the periods 1983-1984; 1988-1989; 1992-1994; and 1995-1997, when his renal failure condition was not an accepted service disability. 

27.     Whilst this outcome may seem harsh, it would be more appropriate to describe the outcome as unfortunate.  The legislation gave the Tribunal no other option than to make such a finding.  There is no discretion in the legislation for the Tribunal to make any other decision based on the application of the sequence of statutory provisions that prescribe LOE, based on the proved facts before the Tribunal.

28.     However, the Tribunal does raise for consideration by Mr Johnston and the Repatriation Commission, the Departmental Policy Guideline “Act of Grace Payments” (Part 3, Chapter 9).

29.     The Departmental Policy Guideline states as follows:

“Section 3 Act of Grace Payments

What is an Act of Grace payment

An Act of Grace payment may be made where a person has suffered a loss.  Although there is no legal liability on the Commonwealth to meet the loss, it is considered that the Commonwealth bears some responsibility for the loss…

Eligibility for an Act of Grace payment

Eligibility for an Act of Grace payment depends on the claimant’s circumstances and a wide range of matters may be taken into account to determine eligibility although there is no set eligibility criteria for an Act of Grace payment, claims may be considered where:

§a person received incorrect advice leading to detriment, but where there is no legal liability

§a matter is covered by legislation, but its application produces a result which is unintended, anomalous, inequitable or otherwise unacceptable

§it is considered desirable to apply the benefits of proposed legislation, or

§there are other special circumstances where there may be a moral obligation to make a payment

Request for an Act of Grace payment

Requests for ‘Act of Grace payments’ can arise from almost any aspect of Commonwealth administration and include payments normally paid under Part III (service pension) or Part IIIA (income support supplement) of the VEA.

Claims for Act of Grace payments

A claim for an Act of Grace payment should first be considered under the criteria for ‘compensation for detriment caused by administrative error’. If a claim satisfies that criteria it will be determined under the compensation for detriment provisions. Claims that do not satisfy the compensation criteria may be determined under the Act of Grace provisions.”

30.     In relation to the Departmental “Act of Grace Policy”, the Tribunal considers that there is no issue for a claim under the Departmental Policy, “Compensation for Detriment caused by Administrative Error”, as there appears to be no departmental administrative procedures that normally would have applied to Mr Johnston’s circumstances.

31.     In any external consideration of the possibility for an Act of Grace Payment, due regard must be given to the following sworn evidence given by Mr Johnston at the hearing.

32.     Essentially, Mr Johnston’s concerns reflected his situation that he was a “vet with a terminal illness of which the Government is directly responsible” and that he suffered injuries whilst in the Navy when “[the Department] knew aviation fuel was poisonous in 1972 and yet you employed me in 1977 and only accepted liability in 2003” (T1, Folio C, 22 April 2004).

33.     Mr Johnston then provided the following outline of his exposure history to aviation fuels during eligible service in the Navy, together with an update on his medical prognosis:

(a)that Iroquois helicopters were the main helicopters at 723 Squadron, during his time, in the Navy;

(b)unlike the other helicopters in the squadron (eg Wessex) the Iroquois did not have a closed pressure refuelling system that, under normal circumstances, automatically shut off fuel delivery, resulting in very few fuel spills;

(c)refuelling of Iroquois was done at a level above the head using a “bowser type” attachment.  There was no pressure control system as in the Wessex to avoid fuel blown back.  The refueller would only become aware that the tank was full after fuel blew back out of the full tank.  In these situations the refueller became exposed to aviation fuel “blow back”;

(d)the refuelling process had to be undertaken quickly; 

(e)the refuellers were not provided with any protective cover;

(f)that he considered that the Department had been very selective in the release of information made available to RAN crew involved in refuelling of helicopters – particularly the significant issues about exposure to aviation fuel and the link between medical conditions suffered by veterans;

(g)that better workplace and occupational safety practices were now applied compared to the period he served in the RAN from 1977-1983;

(h)that only 3 of the 12 engineering crew who served in the helicopter squadron with him now survive; and

(i)that from 1996 his prognosis has been that his life span had been given guardedly, in terms of 2 year increments.  He is not expected to live past “another couple [of years]”. 

34. In relation to the Act of Grace policy, the Tribunal concludes that the LOE application for review, as covered by the provisions of the Veteran’ Entitlements Act, in Mr Johnston’s factual circumstances, has led to a result that is an “unintended anomalous, inequitable, unjust or otherwise unacceptable result”.  On consideration of the overall circumstances, it may even lead to a conclusion “that there is a moral obligation on the Commonwealth to make a payment” (Tribunal emphasis).

35.     The Tribunal makes this conclusion for the following reasons.  Based on the evidence before it, the Tribunal is “reasonably satisfied’, according to the “test” in Jackman, that:

(a)Mr Johnston was exposed to aviation fuel splash during refuelling of Iroquois helicopter whilst serving as an aircraft engineer during his period of service in the RAN from 1977 to 1983; and

(b)that “Back in 1977 to 1983 industrial OH&S regulations were rudimentary and information on the toxic effects of various chemicals almost non-existent” (RAN Minute, T6, Folio 18, 7 May 2003).

36.     Whilst exposure to aviation fuels can be established, the situation during this “exposure period” was that exposure/medical condition interrelationships did not exist.  Indeed, a Statement of Principle for renal failure and exposure to aviation fuel did not exist.  Moreover, considerable time is required before an association or connection between aviation fuel exposure and renal failure can be established.  A long lag time (or latency period) between exposure to the toxic chemical and expression of the injury usually occurs, sometimes up to twenty years or more.  The injury manifests itself after the latency period.  Consequently, exposure to the toxic chemical increases the risk of contracting the disease but does not produce an immediately observable response.  Because of the “latency effect” for the disease to emerge following exposure, the medical research pathway moves along a pathway commencing with “crude epidemiological study” (such as clusters of renal failure cases being identified as occurring in specific situations), to clinical studies (involving individuals or small groups having renal failure) through to “refined epidemiological studies”[2]. In Mr Johnston’s circumstances, the only medical information available would have been the knowledge of clusters of renal failure in situations – but at periods of time, after he had been discharged, when distinctive symptoms would have been first observable[3].

[2]    Epidemiology is the study of the pattern of disease occurrence in human populations, not individuals, and identifies the factors that influence these patterns. 

[3]    See Christie EK, “Toxic tort disputes: proof of causation and the Courts” (1992) 9 Environmental and Planning Law Journal 302-319; and

37.     An example of the nature of scientific and medical information and time required to establish an association between chemical exposure and disease incidence is well illustrated by the studies into RAAF aircraft maintenance workers involved in fuel tank maintenance and the F111 (fuel tank), Deseal/Reseal and Spray Seal Programs (1977-1999) together with the Reports released by the RAAF Board of Inquiry over time (2002-2004).

38.     The Repatriation Commission was satisfied, as from 26 June 2002, that Mr Johnston’s renal failure was related to his service. However, the absence of medical knowledge on any linkage between exposure to aviation fuel/renal failure over the period 1977-1983, as well as the latency of the symptoms and conditions emerging, prevented Mr Johnston’s lodging a claim for periods when he may have been entitled to LOE.  That is, during the periods he claimed that he may have been entitled to LOE (see paragraph 16). 

39.     The Tribunal emphasises that it has no power whatsoever to order that an Act of Grace Payment be made to Mr Johnston. The process for such a payment is for Mr Johnston to make a claim to the Repatriation Commission for an Act of Grace payment and to request that his claim be assessed under the specified eligibility criteria.  The final authority to grant an Act of Grace payment does not rest with the Tribunal, but the Minister for Finance or their appointee.

40.     For all of the above reasons, the Tribunal affirms the decision under review.

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member

Signed:         Sarah Oliver
  Associate

Date of Hearing  24 September 2004
Date of Decision  24 September 2004
Date of Written Reasons          6 October 2004

The applicant appeared in person
For the Respondent                  Mr J Kelly, Departmental Advocate 

[1]    Creyke R and Sutherland P, Veterans’ Entitlements Law (2000, The Federation Press, Annandale NSW)

Christie EK, “Toxic tort disputes: distinctive characteristics require special preparation for trial” (1992) 22 Qld Law Society Journal 279-293.
These articles have been frequently referred to by our Courts. For example, see Muller v Queensland Electricity Commission [1999] QSC 123 (Shepherdson J, Supreme Court) [exposure to isocyanates]; and Seltsam Pty Ltd v McGuinness: James Hardy & Coy Pty Ltd v McGuinness [2000] NSWCA 29 per Spigelman CJ (Court of Appeal) [exposure to asbestos].