Little and Repatriation Commission - [2001] AATA 64

DECISION AND REASONS FOR DECISION [2001] AATA 64

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1999/1777

VETERANS' APPEALS DIVISION )

Re HAROLD PHILLIP LITTLE
Applicant

And REPATRIATION COMMISSION
Respondent

DECISION

Tribunal Rear Admiral A R Horton AO, Member

Date2 February 2001
PlaceSydney

Decision The decision under review is set aside and in substitution therefor the Tribunal determines that the Applicant is eligible for the Special Rate of pension effective 21 March 1997.

……………………..
A R Horton
Member
CATCHWORDS

VETERANS' AFFAIRS – Army service – operational service in Vietnam – accepted war caused disabilities – 100% General Rate – whether entitled to Special Rate

Veterans' Entitlements Act 1986 - ss 6,9,14,24, 28, 120(4)

Banovich v Repatriation Commission 69 ALR 395
Starcevich v Repatriation Commission (1987) 18 FCR 221
Birtles v Repatriation Commission (1991) 33 FCR 290
Re Bonner and Repatriation Commission (1989) 17 ALD 680
Re Hornery and Repatriation Commission (AAT 13166, 11 August 1998)

REASONS FOR DECISION

Rear Admiral AR Horton AO, Member

This is an application for review of a decision dated 10 August 1999 by the Veterans' Review Board ("the VRB") in respect of Harold Phillip Little ("the Applicant") that set aside a decision of a delegate of the Repatriation Commission ("the Respondent") dated 6 August 1997 continuing pension at 70% of the General Rate, and substituted a decision that pension be assessed at 100% of the General Rate, effective as from 21 March 1997. The Applicant lodged an application for review by the Administrative Appeals Tribunal ("the Tribunal") on 23 November 1999.
At the hearing before the Tribunal on 9 November 2000, the Applicant was represented by Mr Dawson of Counsel. Mr Wallis appeared as advocate for the Respondent. The Applicant gave oral evidence.
The Tribunal had before it the documents provided by the Respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("the T documents"). The Tribunal also took into evidence the following:

Statement by Harold Little dated 11 April 2000. Exhibit A1
Medical report of Dr M Baz, occupational physician, dated 26 June 2000.   Exhibit A2
Medical report of Professor D Richards, cardiologist, dated 29 February 2000.    Exhibit R1
Medical report of Dr W P Lennon, orthopaedic surgeon, dated 23 February 2000.         Exhibit R2
Report by Dr R D Lewin, consultant psychiatrist, dated 31 March 2000.      Exhibit R3
Report by Dr J Chen, consultant physician, dated 8 June 2000.        Exhibit R4
Clinical notes from Dr G Altman, consultant psychiatrist, dated 6 March 2000.     Exhibit R5
Clinical notes from Dr R D Yarrow, Fairy Meadow Medical Centre, received 4 February 2000.           Exhibit R6

ISSUES BEFORE THE TRIBUNAL

The Applicant, Harold Little, has a number of conditions accepted as being war caused. In response to a claim by the Applicant for an increase in disability pension, the Respondent decided on 6 August 1997 to continue pension at 70% of the General Rate. On 10 August 1999, the VRB set aside the decision and substituted its decision that pension be assessed at 100% of the General Rate. The issue before the Tribunal is whether the Applicant is eligible for the Special Rate of pension pursuant to section 24 of the Veterans' Entitlements Act1986 ("the Act").
Subsection (1) of section 24 of the Act states, relevantly:
"(1) This section applies to a veteran if:

the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(aab)the veteran has not yet turned 65 when the claim or application was made; and

either :
the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
…

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
the veteran is, by reason of 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
section 25 does not apply to the veteran.
For the purpose of paragraph (1)(c):
(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

the veteran is incapacitated, or prevented from engaging in remunerative work for some other reason; and
(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 the 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 parties agreed that the Applicant is not a veteran to whom section 25 applies. The Respondent conceded that the Applicant satisfies the conditions in subsection 24(1)(a) and (b), and hence the issue is whether he satisfies the conditions of subsection 24(1)(c), as further defined in subsection 24(2)(a) and (b).
The relevant standard of proof is that pursuant to section 120(4), that is, to the reasonable satisfaction of the Tribunal. The date of effect, should special rate of pension be granted, is 21 March 1997.
The Applicant has accepted war-caused disabilities of post-traumatic stress disorder ("PTSD") with alcohol abuse, ischaemic heart disease, chronic airflow limitation and tinea. Disabilities determined not to be war-caused are chronic solar skin damage, osteoarthrosis of the left and right hips, and osteoarthrosis of the left and right shoulders.
At the outset, the Respondent opined that the opinion of Dr Lennon, orthopaedic surgeon took precedence over that of rehabilitationists, in that the non accepted disability of osteoarthrosis had no significance in respect of the Applicant's ability to undertake work (Exhibit R2). Counsel for the Applicant agreed, noting that Dr Chen, consultant physician, was of the same opinion.
The Respondent acknowledged the view of Professor Richards, cardiologist, that the Applicant's accepted ischaemic heart disease was under control (the inference being that it had little or no bearing on his ability or otherwise to work). The Respondent agreed with Counsel for the Applicant that Dr Altman, treating consultant psychiatrist, considered PTSD and alcohol to be the significant disabilities of the Applicant, whilst Dr Lewin, consultant psychiatrist, considered that alcohol abuse prevented the Applicant from working. Counsel also referred the Tribunal to the opinion of Dr Baz, occupational physician, that the veteran is "unable to engage in paid work solely due to his accepted conditions of up to 8 hours per week" (Exhibit A2). The conditions of subsection 24(1)(b) were therefore conceded, in that the Applicant was incapable of undertaking remunerative work for periods aggregating more than 8 hours per week for reasons of war-caused injury or disease. Thus the issue before the Tribunal was confined to the requirements of subsection 24(1)(c), as further amplified by subsections 24(2)(a) and, in the view of the Respondent, more particularly subsection 24(2)(b).
FACTS AND EVIDENCE
Following national service in the army, including some 11 months service in Vietnam, the Applicant returned to employment at BHP Port Kembla. After several years he resigned, citing severe stress (Exhibit A1). He was subsequently employed by IPEC Road Express from 24 April 1978 on an owner/driver basis. He states that personal depression and stress continued, that he could not associate with other drivers, his drinking binges got worse and he thought "everyone was out to get me".
The Applicant underwent surgical coronary revascularisation in 1992, returning to work some months later. On examination by Professor Richards in February 2000 (Exhibit R1), he stated that whilst he experienced dyspnoea during vigorous exercise, "his heart did not affect his lifestyle otherwise." He remained with the company until 31 May 1996 (T3), when he was retrenched as a result of actions by the company to reduce costs and overheads (T4). The Respondent accepted that there is no evidence to suggest that termination of his employment resulted from a medical condition.
In evidence to the Tribunal, the Applicant stated that after the termination of his employment with IPEC he looked for other work, still being in possession of his own truck. He approached the manager at Comet in Wollongong, but was unsuccessful. The manager was aware of his previous heart attack and said that in the circumstances he could not take him on. For the same reason, he was unsuccessful in an application to Brambles. He agreed with the Tribunal that the companies may not have wanted to incur compensation and other liabilities that may have arisen from his employment. In response to Counsel, the Applicant stated that he stopped looking for work on the advice of Dr Altman, his treating psychiatrist, because of his medical conditions.
In cross examination, the Applicant could not recall when he had stopped looking for employment. He retained his truck for two years after his termination from IPEC, doing a few furniture jobs and a couple of nights on a paper run, and looking for work, without success, in the transport industry. In time, and as "the work was not there", he could no longer afford to keep the truck and was obliged to sell it. In response to the question "apart from going to the courier companies and these few jobs you had, did you regularly look for work at all", he replied "not really, no" on the basis that Dr Altman told him not to actively look for work.
Dr Altman has treated the Applicant since December 1996, some six months after his employment with IPEC was terminated. On 6 December 1996, he concluded his initial examination thus:
"…
In summary, in my opinion as a result of his Vietnam experience, Mr Little suffers from a severe chronic Post-traumatic Stress Disorder and from an associated Major Depression and Alcohol Dependence. In my opinion his psychiatric impairment according to Table 4 from the Guide to the Assessment of rates of veterans' Pensions is 45 points. Furthermore in my opinion he is totally and permanently unfit to work and in my opinion he should be placed on a "T&PI" disability pension.
…"
(T4, P18)
In subsequent reports, the most recent being that of 19 April 1999, Dr Altman remains of the same opinion, and refers to an excessive alcohol consumption and the contributing issue of marital conflict. He further notes three admissions between 1996 and July 1998 to the Evesham Clinic. Dr Baz is also of the opinion that the Applicant is unable to engage in paid work for periods aggregating more than eight hours per week due solely to his accepted conditions (Exhibit A2). Dr Lewin considers the alcohol abuse precludes the Applicant from working as a driver/courier (Exhibit R3). The opinion of Dr Chen that the Applicant might be able to work as driver in periods when blood alcohol levels have reduced significantly was not seen as practical by the Respondent.
SUBMISSIONS
Submissions by both parties related to subsection 24(1)(c) and the appropriate considerations of subsection 24(2), as referred to in paragraph 10 of this decision. Counsel for the Applicant stated at the outset that the thrust of the Applicant's submission was that the test in relation to subsection 24 (1)(c) must be based on his ability to work at the point of assessment. Therefore, based on the medical evidence, which Counsel submitted was persuasive, the fact that the Applicant left the work force because of redundancy does not interfere with his entitlement. The initial point of assessment, as agreed by the Respondent, is that of submission of the claim on 21 March 1997.
The Respondent submitted that subsection 24(1)(c) must be read in conjunction with subsection 24(2). As a matter of statutory construction, although contrary to the decision in Re Hornery and Repatriation Commission (AAT 13166, 11 August 1998), (2)(a) must be read with (2)(b). The Respondent submitted that to do otherwise would ignore the use of the word "and" between 2(a) and 2(b), as well as deny the Applicant the "so-called amelioration" offered by subsection 2. On the evidence, the Respondent submitted that the Applicant cannot be said to have suffered from a loss of salary or wages, vide paragraph 2(a), as the veteran "had ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or disease" vide 2(a)(i). As regards paragraph 2(b), the Applicant has to satisfy the requirement that he has been genuinely seeking to engage in remunerative work at the date of the application.
The Respondent's position was that it was "incumbent upon the Applicant to satisfy the Commission that he genuinely sought work" as the requirement was so defined in subsection 24(2)(b). The Tribunal was referred to Re Bonner and Repatriation Commission (1989) 17 ALD 680 wherein that Tribunal considered the word "genuinely":
"…indicates the necessity for some objective signs of active pursuit of remunerative work."

The Respondent submitted that in the 11 month period between the cessation of work and the application (the period concerned is from 31 May 1996 until 21 March 1997), "there has not been any clear indication that the applicant satisfies that description from Bonner".
Counsel for the Applicant acknowledged the relationship between subsections 2(a) and 2(b), but submitted that in this matter it was not necessary to proceed to 2(b), albeit if necessary that could be done, as evidence was before the Tribunal in respect of his seeking work. Counsel submitted that the test is not related to how employment was lost, but whether an applicant can work. In support of this contention, Counsel referred the Tribunal to the decision of the Full Court in Banovich v Repatriation Commission (1986) 69 ALR 395, which interpreted the meaning of the then subsection 1(b)(iii) of Schedule 2, which Counsel submitted was the same as the present subsection 24(1)(c), in the following manner at page 402:

"We accept that the loss referred to in paragraph 1(b)(iii) may be caused by a loss of existing employment or by an inability to obtain new employment. There is no difficulty in regarding either circumstances as preventing the member "continuing to undertake" remunerative work. But it is, in our opinion, erroneous to read the phrase "remunerative work that the member was undertaking" as referring to a particular job with a particular employer. The term "remunerative work" is used in the schedule in a context which indicates an intention to refer to work generally ……consistently with that use, the phrase "remunerative work which the respondent was undertaking" should be read as a reference to the type of work which the member previously undertook and not to a particular job. It follows that a member's loss of particular employment for a reason unrelated to a war disability would never destroy a member's subsequent entitlement to claim a special rate of pension; the question would remain, at the relevant date for determination of a claim, whether the member was prevented by his or her war-related incapacity – and by that incapacity alone – from continuing in that field of remunerative activity"

Counsel went on to state that:

"In Banovich…they distinguish the phrase they use is, 'a member's loss of particular employment,' and they say that is quite different to 'ceasing to engage in remunerative work'. Now this veteran lost particular employment by way of redundancy but his ceasing to engage in remunerative work; that is, ceasing to continue to look for work, was a decision based on the medical evidence and that is, war-caused disabilities alone stop him. Any other construction of the legislation has to set up a false and, I would say, totally unintended situation of the only way veterans can qualify in this situation is to apply for a whole lot of jobs that we all know they are not going to get and they could not take if they got them.
Because they can't work. The doctors all say they couldn't possibly work, but they have to apply for some number of jobs – I am not familiar with the test in Hornery – in order to meet the genuinely test in order to get a pension. That can't be the construction of the legislation, what is intended by the legislation. It just can't be, and that is what, in my submission, Banovich clarifies."

The Respondent was not in agreement with the contention of the Applicant that subsection 24(1)(c) could stand alone in this matter, submitting that subsection 24(2) must be read in conjunction with subsection (1)(c), and that at the date of application, if the Applicant has ceased work for reasons other than accepted disabilities alone, which the Respondent contended, then section 24(2) must come into effect.
The Respondent further submitted that remunerative work should not be limited by the provisions of section 28 of the Act, citing the Full Court (Neaves J dissenting) in Starcevich v RepatriationCommission (1987) 18 FCR 221 as adopting Banovich (supra) and providing guidance on the concept of jobs.
Following the taking of evidence from the Applicant as to his attempts to find work, as summarised in paragraphs in paragraphs 13 and 14, Counsel submitted that if the Tribunal accepted the veteran's evidence, then the veteran satisfied 24(2)(b) in that:
"He did make some attempts to find work being the only sort of work that was available. This was a person who was a driver who had a truck in an area where there wasn't necessarily a huge amount of work, but he sought the work that was available."

Counsel contended that the limited work available in the Wollongong area was not an issue in this matter, and should be of no detriment to the Applicant, drawing on Birtles v Repatriation Commission (1991) 33 FCR 290, wherein Hill J stated at 301 in respect of the applicant having moved to Mollymook, where work opportunities were limited:

"If, as a matter of fact, by virtue of his war caused incapacities and those alone, he was unable to work, although otherwise willing and able to do so, the fact that he retired to Mollymook…would be no disqualification to his qualifying under s24(1)(c)".

Final submissions concluded with a consideration as to whether intermediate rate of pension or temporary payment pursuant to sections 23 and 25 respectively were appropriate, given the comments by Dr Chen in respect of whether the Applicant could drive at certain times when blood alcohol levels were sufficiently reduced, or Dr Lewin's implied view that a return to driving might be possible if the alcohol problem could be resolved. Neither party thought the circumstances of this case, and the Applicant's medical history, warranted any further consideration of the intermediate rate or temporary payment.

ANALYSIS AND FINDINGS
With the exception of subsection 24(1)(c), the Respondent conceded that the Applicant had met the conditions of section 24 in respect of special rate of pension. To restate, subsection 24(1)(c) requires that:

"the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, 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 capacity."

These criteria are amplified or further defined in subsections (2)(a) and (2)(b), which are provided in the legislation "for the purpose of paragraph (1)(c)". The ordinary meaning of these subsections must be that the Applicant must therefore satisfy each component of 24(1)(c), by reference to the "explanatory" legislation in (2), and the Tribunal proceeds accordingly.

Counsel for the Applicant drew on the reasoning by Fisher, Beaumont and Wilcox JJ in the Full Court decision in Banovich (supra). Whilst the circumstances of the applicant in that matter were somewhat different to those in this case, the fundamental issues in respect of the veteran's "prevention from undertaking remunerative work" due to a war-caused incapacity, and whether he suffered a "loss of salary or wages, or of earnings" due to that incapacity were relevantly addressed. The reasoning in Banovich has been applied in subsequent considerations of these matters, including that of Starcevich (supra).
The court in Banovich was applying the relevant legislation under the Repatriation Legislation Amendment Act 1985, and specifically in respect of Schedule 2 of that Act which substituted criteria for the granting of a pension at the special rate. As indicated at paragraph 20 above, Counsel for the Applicant submitted that notwithstanding some minor amendments to the wording and construction, the criteria for the special rate issue under consideration in the present Act (subsection 24 (1)(c)) is the same as that in force in Banovich, that is Schedule 2 (1)(b)(iii), and hence the reasoning of Their Honours applies to this matter. In Birtles (supra), which also addressed similar issues to those under consideration in this matter, Hill J referred to Banovich and the relevant legislation at 294 as follows:
"In the course of its judgment, the Full Court considered the interpretation of para (1)(b)(iii) in Sch 2 to the Repatriation Act 1920 (Cth) which for present purposes is identical to s24(1)(c)."

The Tribunal is therefore in accord with the submission of the Applicant as regards the relevance of Banovich to this matter, noting that the whole of section 24 closely parallels the wording in the earlier Sch 2, and the meanings are as one.
Banovich (supra) describes the argument of Counsel for the Applicant in regard to the matter of loss of employment under para (1)(b)(iii), in the following terms at 402:

"…the distinction made in para (1)(b)(iii) is reflected in the alternatives postulated by para 2(a); sub-para (i) referring to a case of loss of employment and sub-para (ii) to a case of inability to obtain new employment. Unless para 2(a) is so construed, they say, a member who loses his or her employment for a non war-related reason – for example retrenchment…will never subsequently be entitled to receive a special rate pension, regardless of the subsequent employment effects of a war-related disability."

In responding to this argument, their Honours stated at 402, and as previously referred to by Counsel:

"We accept that the loss referred to in para (1)(b)(iii) may be caused either by a loss of existing employment or by an inability to obtain new employment…The term "remunerative work" is used in the Schedule in a context which indicates an intention to refer to work generally…Consistently with that use, the phrase "remunerative work which the respondent was undertaking" should be read as a reference to the type of work which the member previously undertook and not to any particular job. It follows that a member's loss of particular employment for a reason unrelated to a war disability would never destroy a member's subsequent entitlement to claim a special rate pension; the question would remain, at the relevant date for determination of a claim, whether the member was prevented by his or her war-related incapacity – and by that incapacity alone – from continuing in that field of remunerative activity."

Starcevich (supra), which applied Banovich (supra), adds little to the matter, as it relates primarily to differing work or employment circumstances. However, Fox J, in giving his opinion that the appeal should be allowed, made an interesting comment on the interpretation of the relevant legislation at 225 thus:
"…
It is hardly necessary to say so, but the legislation should in my view be given a reasonably liberal interpretation; it has often been pointed out that it is a matter of great public importance to provide adequately for incapacitated ex–servicemen. The reasons need not be explored here. It can however be pointed out that the combined operation or paras (a) and (b) of s24(1) is itself already very restrictive of a right to a pension.
…"

The evidence in this matter is that the Applicant became unemployed when he was made redundant, not through any fault of his own but as a consequence of a commercial decision made by his employer. There is no evidence to suggest that this decision by IPEC was made on medical grounds. The evidence from the veteran himself is that he subsequently sought employment in the field in which he had been working for some 18 years, but that such employment opportunities were limited and, more importantly in this matter, he was informed or deduced, that where opportunities might have been available, for example with Comet or Brambles, the companies were not prepared to employ him because of the implications of his 'heart attack' some four years previously. For the ensuing two years he retained his truck, one might suggest in the interests of being available to undertake further work should it arise.
     In cross examination, the Applicant was unable to give a positive answer to the Respondent as to when he finally stopped looking for work. But from the evidence, and in the immediate period after his retrenchment, the Tribunal accepts that he was genuinely looking for work in an industry with which he was familiar and experienced, and the Tribunal here applies Banovich (supra). The Tribunal further finds that on the evidence given by the Applicant, his inability to obtain further employment in the transport industry resulted from the perception in that industry of health problems associated with his heart condition, accepted as a war-caused disability. The Tribunal here does not reject the opinion of Professor Richards that he could be employed as a driver, but merely accepts the lay view that might well have existed in the industry at the time.
     The evidence is quite conclusive as regards the medical conditions of the Applicant.   Dr Altman, his treating psychiatrist, has from the initial consultation given his opinion that the Applicant is "totally and permanently unfit to work", based solely on his accepted disabilities of PTSD with alcohol abuse. That opinion was first given some three months before the claim was lodged. Dr Baz considers his war-caused disabilities, alone, prevent him from undertaking remunerative work aggregating more than eight hours per week. Dr Chen places a caveat on his ability to work in the transport industry with his present alcohol problem, and Dr Lewin considers his drinking problem to be "a significant problem". The Tribunal places emphasis on the opinion of his treating psychiatrist, Dr Altman, whose view has been unwavering throughout, that the Applicant is prevented, or incapacitated, from engaging in remunerative work through the circumstances of disabilities alone that have been accepted as war-caused. That was the situation when the Applicant submitted his claim in March 1997. The Applicant therefore meets the amplifying criteria in subsection 24(2)(a).
     Subsection 24(2)(b) is multi-faceted in that it requires that the veteran to genuinely seek work, be continuing to do so but for the incapacity and that the incapacity is the substantial cause of an inability to obtain work. The Tribunal has already accepted that the Applicant genuinely sought alternate employment after being made redundant. As the Applicant stated in evidence, he stopped actively looking for work on the advice of Dr Altman: "Graham told me, he said, just don't actively seek work". That statement is not at odds with the strong opinions of Dr Altman, as already referred to, that the Applicant could not undertake any gainful employment, and that his accepted incapacities would be "the substantial cause of an inability to obtain work."
The Tribunal finds that the Applicant meets the criteria in subsection 24(1)(c) of the Act and accordingly, noting that all other criteria in section 24 have been conceded, is entitled to pension at the special rate, the date of effect being 21 March 1997.

I certify that the thirty-four (34) preceding paragraphs are a true copy of the reasons for the decision herein of:
Rear Admiral A R Horton AO, Member
Signed:         .....................................................................................
  Associate
Dates of Hearing  9 November 2000
           Date of Decision  2 February 2001
           Counsel for Applicant  Mr N Dawson
           Advocate for the Respondent      Mr R Wallis